Free Childcare: Costs and Benefits

Jim Shannon Excerpts

Tuesday 19th February 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Bristol North West (Darren Jones) on bringing this issue to the Floor for consideration. I deal with this issue every week in my office, and in particular with my staff. I will give the Chamber an example of how the matter works in practice.

I have six staff, five of whom are ladies, so the issue comes through clearly. They are of differing ages, though I will not mention their names or refer to their ages, because that is something we do not do, if we want to live well. My part-time worker is in her 50s and is a grandmother. I allow her flexibility to change her days so she can mind her grandchildren and come into my office on the days or mornings that she does not have the children. That is a practical arrangement that works for her and for me—that is important.

A further two staff members in their 40s have children in the last year of schooling, so they are able to work their normal full-time hours. It is easier when children attend secondary schools and further education. I also have a staff member in her 20s who is due to marry next year, and she has informed me that I should be prepared for her maternity announcement the following year, as she wants children right away after she gets married. Again, I support her wholeheartedly in that.

My parliamentary aide is in her 30s, and has a three-year-old and a four-year-old. Her childcare arrangements are more pressing. They are all key members of staff, but she is in particular. When she returned to work after her second child, we came to a flexible working arrangement that allows her to work at home on Tuesday, Wednesday and Thursdays, when I am at Westminster.

In practice, when my aide’s kids are at nursery in the mornings, she works away for me, and when her husband gets home at 6 pm, she works on. She is my speech writer, preparing many of my speeches, so she probably has little to do—I jest, because I keep her busy. I talk the speeches over with her, but cut and add to them as I progress through the time. She is kept very busy, and her workload means that I sometimes see work coming through to me at 1 o’clock in the morning. That is a fact; it is how she does it with her flexible hours—I am very fortunate to have her working for me.

When I asked my aide about childcare, her answer was simple: “Jim, I earn too much to get help from Government but not enough to pay the £300 a week for someone else to mind the children. I am holding on for the P2s”—primary school—“when the kids are in until 3 pm, and I can then cut back on night-time hours.” That has made me ask some questions. How many young families working to pay for childcare are holding on by a thread until they get the care? How many grannies and grandas are missing out on actually relaxing in retirement because their children are not able to pay for childcare?

Too many families are over the threshold for tax credits and struggle to do it all. That was illustrated clearly by the hon. Members for Bristol North West and for Mansfield (Ben Bradley) in their contributions. Families earn too much for social housing, but not enough to be comfortable.

What we have is what I refer to as the working poor and there are a greater number of them, and every one of us could probably reflect that and illustrate that in our constituencies. I believe that if the burden of childcare was lifted, there would be benefits for the quality of life for so many families throughout the United Kingdom of Great Britain and Northern Ireland. We need more schemes such as the tax-free childcare scheme, which puts 20% of Government funding alongside someone’s 80%. The fact is that, although that is good, not many people are aware of it and I look to the Minister to give us some illustration of what can be done to improve that. There are many people who just do not know about the scheme.

Some 91,000 families made use of the new tax-free childcare system in December, which is far below the expected number. What are the Government doing to increase that number and increase awareness, because official figures show that the Government had planned and budgeted for 415,000 families? We are far off that figure, for a scheme that was launched in October 2017. It is a gentle question, but hopefully it will receive an answer. At one point, 3 million could qualify for the help, meaning that only about one in 14 eligible families had applied for it. So we really have an issue to increase that number.

When we look at countries around the world, we see that we are at the top of the league for costs, and they must come down. Just yesterday in the provincial press back home, there was an illustration of the cost of childcare per child across Northern Ireland. In my constituency of Strangford, and in mid and east Down, we have the highest levels of childcare costs anywhere in Northern Ireland. We have a middle class that is squeezed beyond control, with rising rates, rising insurance costs for their home and car, rising food prices and rising petrol prices. Everything is more money, apart from their wages, which remain the same.

It is little wonder that so many people believe that it is better not to work. We have mothers and fathers who slog it out at work, and then try to cram in time with their children in the evening hours, and stay on top of housework and mundane issues. I believe that they need help.

I will finish with this comment: childcare is one way we can help and encourage women with young children to have a career, and find a way to do it all. So I urge the Government to expand the 20% help for childcare and bring us down in the global charts, instead of our being “Top of the Pops” for all the wrong reasons.

[Geraint Davies (in the Chair)]

Thank you very much. We have still got a lot of time.

--- Later in debate ---

[The Minister for School Standards (Nick Gibb)]

It is a pleasure, as always, to serve under your chairmanship, Mr Davies, and I congratulate the hon. Member for Bristol North West (Darren Jones) on securing this debate and his welcome news—and the interesting way he introduced it.

I am grateful for the opportunity to set out the Government’s position on childcare support. It is a pleasure to stand in for the Under-Secretary of State for Education, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), who I understand is seeing family in Washington DC, which is appropriate, given the debate on families that we are having.

I think the truth is that Members here violently agree on the importance of high quality childcare. Evidence shows that high quality childcare supports young children’s development and helps to prepare them for school. Affordable and convenient childcare gives parents the ability to balance work and family life, allowing them to enjoy the benefits of a job, safe in the knowledge that their children are in good hands.

When the Labour party left office in 2010, only 15 hours of free childcare was available for three and four-year-olds. It was the Conservative-led coalition Government that introduced free childcare for two-year-olds from disadvantaged families. Early education from the age of two has long-lasting benefits for children, and we believe that it helps to promote a child’s emotional, cognitive and social development.

However, evidence shows that, on average, disadvantaged families are less likely to use formal childcare provision than more advantaged families, which is why the Government introduced 15 hours of funded early years education for disadvantaged two-year-olds in September 2013. Eligibility was expanded in September 2014 to include children with a disability or special educational needs from low-income working families, or who have left care. Our balanced approach to managing the public finances enabled us to do that. The extended learning programme for two-year-olds has been popular with parents. Local authorities reported in January last year that 72% of eligible parents nationally took up their entitlement to a place. That is a significant increase from 2015, when the figure was 58%.

A year and a half ago, we also doubled the childcare entitlement of working parents of three and four-year-olds to 30 hours a week. On the point made by the hon. Member for Batley and Spen (Tracy Brabin), only working parents are eligible for those additional 15 hours; the first 15 hours are universally available for parents of all three and four-year-olds. In its first year, the 30 hours of free childcare, alongside the Childcare Choices website and the childcare calculator, helped more than 340,000 children to take advantage of more high quality childcare, with savings for parents of up to £5,000 a year. Again, the Government’s balanced approach to the management of the public finances and the economy enabled us to do that and to provide that benefit to parents.

Independent evaluation of the first year of the 30-hours entitlement found more than a quarter of parents reporting that they had increased their working hours as result, with 15% of parents saying that they would not be working at all without the extended hours. Those effects were stronger for families on lower incomes, helping to fulfil our commitment to help disadvantaged families and to boost social mobility. Furthermore, surveys of parents highlight the impact that the 30 hours can have on parents’ working patterns, with a majority of parents reporting that the 30 hours have given them more flexibility in the hours that they can work, and a small but significant proportion of mothers reporting that the 30 hours had led them to enter work or to increase their hours.

The evaluation report quoted one parent as saying:

“By doing four days now instead of three…my company looks at my development and progression in a way that they wouldn’t if I was only doing three days.”

Some 86% of parents reported that they thought that their child was better prepared for school as a result, and 79% felt that their family’s quality of life had improved. The latest study of early education and development—SEED—report, published last year, also points to the clear evidence of the benefits of high quality early education for the cognitive and emotion development of all children aged two to four.

My hon. Friend the Member for Mansfield (Ben Bradley) asked for a commitment to support the most disadvantaged children, but that has been the driving force behind all our education reforms since 2010. On early years education, more than a quarter of children finish their reception year without the early communication and literacy skills that they need to thrive. The Government have ambitious plans to halve that proportion over the next 10 years. The Department is working closely with the sector to deliver on our commitment to reform the early years foundation stage profile. The reforms are an important opportunity to improve outcomes for all children, but especially to close the word gap between disadvantaged children and their peers. We know that the gaps can emerge much earlier in a child’s life, well before they enter reception. That is why we recently launched a capital bidding round of £30 million to invite leading schools to come forward with projects to create new high quality nursery places for two, three and four-year-olds. Those are the reasons why the Government are investing more than any other in childcare. We will spend around £6 billion a year on childcare support in 2019-20—a record amount.

[Jim Shannon]

In my contribution, I referred to the take-up figure of 91,000. The number that could take up the scheme is 417,000. I asked what the Government are doing to bridge that gap and ensure that people take up the scheme.

[Nick Gibb]

I will come to that point in a moment. We believe that the take-up of all the different schemes has been very high, but we always want to do more to ensure that it continues to increase.

The introduction of 30 hours has been a large-scale transformational programme, and such change can be challenging, but tens of thousands of providers have none the less responded to make it a success, because of their ongoing commitment to helping families. The evaluation of the introduction of the 30-hour entitlement found that three quarters of providers delivering free entitlement places were willing and able to deliver the extended hours with no negative effects on other provision or the sufficiency of childcare places. Almost two thirds of providers offered full flexibility with free choice to parents on when they could take the extended hours. Overall, we are already starting to see how the 30-hour entitlement is making a difference to families across the country.

The childcare market in England consists of a diverse range of provider types, allowing parents real choice in their childcare provision. The supply of childcare in England is generally high quality, with more than nine in 10 providers rated good or outstanding by Ofsted. There are strong indications that supply can meet parent demand for Government-funded entitlements. Nearly 79,000 private childcare providers were registered with Ofsted in August 2018 and more than 7,500 school-based providers, including maintained nursery schools, were offering early years childcare.

While there are some examples of providers closing, as the hon. Member for Stockton North (Alex Cunningham) pointed out, there is no evidence of widespread closures in the private and voluntary childcare market. The latest official Ofsted data, published in December 2018, showed that the numbers of childcare providers on non-domestic premises is fairly stable over time, showing a marginal 2% decrease compared with 2012. Providers joining and leaving the Ofsted register is normal in a private market and can be due to a variety of reasons. In fact, more non-domestic providers joined the register between 31 March 2018 and 31 August 2018 than left.