Free Childcare

Debate between Kirsten Oswald and Helen Jones

Monday 21st November 2016 Westminster Hall

[Helen Jones (Warrington North) (Lab)]

I beg to move,

That this House has considered e-petition 132140 relating to free childcare.

It is a great pleasure to serve under your chairmanship, Mr Davies.

The petition has so far garnered more than 132,000 signatures, but the amount of public engagement generated through the Petitions Committee has been quite astonishing. We have had 33,000 posts on our Facebook page, which has been viewed by more than 492,000 people. I did a webchat, which, for someone so useless with technology, is a step forward in itself. A number of people also emailed me personally and some of the stories they told were quite heart-breaking.

The difficulties that many parents have to go through simply to go out to work ought to give us all in the House pause for thought. Because of the difficulties they face, some of those parents, understandably, are quite angry, and sometimes their anger—not in the majority of cases—turns against the wrong target, which is those getting free childcare for two-year-olds. I want to set out the position as it is because there is a misunderstanding. Many people think that free childcare for two-year-olds is only available to parents who are unemployed, but that is not the case.

As we all know, all three and four-year-olds are currently entitled to 15 hours of free childcare for 38 weeks of the year. The provision was brought in by the Labour Government for four-year-olds for 33 weeks of the year, and it was gradually extended. It is a universal provision and most families take up their entitlement. That Government also sought to start to extend free childcare to the most disadvantaged two-year-olds, and the coalition Government broadened that further. It is available not only to those on income support or income-based jobseeker’s allowance, but to children in the poorest working families: those in receipt of tax credits and—the last time I looked—with an income of less than just over £16,000. Crucially, the provision is also available to looked-after children, to children with disabilities and to children with special educational needs. I say that it is available to the children, rather than the parents, because that particular policy is aimed at tackling disadvantage in the early years so that children are ready to start school and benefit properly from their education.

The Government have taken a different course, and seek to extend free childcare for three and four-year-olds to 30 hours a week. Crucially, that is not a universal provision. It is for working parents only, and will be subject to minimum and maximum income limits. It is currently in the pilot stage, and I have reservations, which I will come to later, about how it will be paid for. There is no doubt that the situation is very confusing for parents, and it is understandable that many of them are very angry at the problems they face because the cost of childcare has risen alarmingly in the past few years. It rose by 30% on average between 2010 and 2015, which is five times higher than the rise in wages. The parents who have contacted me have told me about the problems they face not just with childcare during the day, but in getting after-school childcare and holiday care.

[Kirsten Oswald (East Renfrewshire) (SNP)]

The hon. Lady is making an important point about the need for flexibility in the timing of childcare. I am particularly encouraged that the Scottish Government, after a major consultation, have launched a series of trials to ensure that, in Scotland, we can offer places where and when families need them. Does she agree that those steps are significant in making the provisions work for everyone?

[Helen Jones]

I agree with the hon. Lady that we need flexible provision of childcare because what we have does not always fit with parents’ working hours. I will come to that later, but first I will give a few examples of the cost to parents.

Of course, costs vary throughout the country, but so do wages. One lady who contacted me from the north-west said that her family pay £840 a month for three days of childcare a week. Now, they are not highly paid and, to put it into context, that is exactly the same amount as their mortgage payment. Another parent from Surrey, at the other end of the country, got in touch with me. She and her husband have a reasonable joint income of £69,000, but they have twins. They have found that the cheapest way to provide childcare for their twins is to hire a nanny, but the cost of hiring a nanny is about £25,000 a year, which is more than a third of their joint income—an astronomical sum. These parents feel caught in a trap that is not of their own making. They want to work and, in many cases, they need to work just to keep their heads above water, yet a huge chunk of their earnings is being taken by childcare.

I was also contacted by a nurse who wants to go back to work in the NHS, and the country certainly needs nurses to go back to work. She found that, for a 12.5 hour day shift, she would be just £25 better off after paying for childcare. Her solution is to work night shifts, which, for various medical reasons, are not good for her. That is an example of the barriers people face just in doing their job.

The other issue that many parents raised with me was one of access, and that seems to be particularly true when one partner is in the armed forces. One family contacted me—again, not pleading poverty. They said, “We have a good income”, but they found that every time they moved, the decent nurseries, at a reasonable cost, were full, and they charge—certainly in the south of England—between £50 and £100 per child just to be put on the waiting list. Frankly, that is a rip-off that the Government could and should end very quickly.

Another member of the armed forces—a single parent who is not earning a high income—told me of the real difficulty she faced in finding childcare that would fit with her irregular working hours. Another family told me that when they move, they find that some local authorities provide free childcare for two-year-olds of military families, and that others do not, but those families have no control over where they are posted or, therefore, whether they can access that provision.

These are parents who are trying to do the right thing and set a good example to their children but, naturally enough, they want the best provision for their children, as we would all want for our children. That is why we should be talking about early years provision and early years education, rather than childcare. We want to provide the best we can for our very youngest children, but the problem is that for many years there has not been sufficient investment in the sector, and there are not sufficient qualified staff. I am convinced, as someone who began her career as a secondary teacher, that if we invested more in the early years, we would prevent many problems further along in the education system. Such a move would pay us because it is the right thing to do not only morally, but economically.

The last Labour Government recognised that problem and they particularly recognised the difficulty of ensuring that we had a sufficiently skilled workforce. Therefore, part of the job of Sure Start centres, which became children’s centres, was about providing day care, but it was also about giving advice to parents and, crucially, working with other providers and childminders to raise standards across the sector. It therefore seems a tragedy that the coalition Government decided to remove from centres in the most deprived areas not only the obligation to provide full day care but the need to employ a qualified teacher. There are some Ministers—I except the Minister present from this—who believe that anyone can teach, but I assure her that that is not the case. I suspect that many members of the Government would not last a day in early years provision. I know that I would not, and I am a qualified teacher. Early years provision is a highly skilled occupation if we are going to do it properly.

At the same time, the Government set up the early intervention grant and ended the ring-fencing of funding for children’s centres. They then reduced the grant year by year, meaning that not enough money was going into the system. The House of Commons Library estimates that the predecessor grants that were rolled up into the early years grants were worth £2.79 billion in 2010. Immediately on taking office, the coalition Government reduced the sum to £2.48 billion, and to £2.24 billion the year after—that is 10% lower than what they spent the previous year and 20% lower than planned. Two thirds of that money was spent on the under-fives, which gives an idea of the impact of the grants on the whole sector.

There was no extra money when the coalition Government expanded childcare for two-year-olds. They paid for it by moving some of the early intervention grant across to the dedicated schools grant, thus starving the rest of the sector of resources. The remains of the early intervention grant continue to go down. The grant was part of the start-up funding assessment when the Government changed to a business rate retention scheme for local government finance, and it was £1.71 billion in 2013, going down to £1.58 billion the following year. This year it is £1.32 billion and, if the indicative totals we have are right, by 2019-20 it will be just over £1 billion.

What is the point of this ramble through the byzantine pathways of local government finance? I must admit that I find it fascinating, but I have never found anyone else who does. The simple reason is that we can have good early years provision and we can have cheap early years provision, but we cannot have good, cheap early years provision. The real problem with what the Government are doing is that it pushes more of the cost on to parents because the free hours are underfunded, and it ensures that the expertise that was being built up in children’s centres is gradually disappearing as they close and as the services they offer are restricted.

There is doubt about whether the extended hours that the Government are offering will be properly funded. The National Audit Office published a report earlier this year in which it said that there was real difficulty because the Government’s implementation of the provision will mean the end of much cross-subsidisation. At the moment if a parent has, say, 40 hours’ childcare a week, 15 of those hours are paid for by the local authority but at a fairly low rate. The hours that the parent takes on are paid at a higher rate to cross-subsidise the other hours. If the Government do not properly fund the extra hours, several things could happen: the quality might reduce; many providers might not take part in the scheme at all; or there might be a further cost for parents because providers decide to charge more for other types of childcare, such as childcare for the under-twos, holiday provision and out-of-hours provision.

Several providers that have contacted me say that they are already struggling to keep going, even though low wages are endemic in the sector. Staff have contacted me about how little they earn, which makes it even more difficult to attract good, skilled staff. Those issues are important to parents because the Government estimate that the parents of some 390,000 children will want to take up the extra hours, which means an extra 45,000 places are needed. In fact, even more places are likely to be needed as the figure is likely to be an underestimate. If the policy is successful in getting more parents into work or in getting parents to work extra hours, even more childcare places will be needed. The Government’s response was to announce last year that they would increase the average national funding rate for early years to £4.88 an hour from £4.56 an hour for three and four-year-olds. That, of course, is an average. Many councils do not pay that amount because they are having such difficulty funding even statutory services that there is not enough money left to fund early years services.

It is fair to say that many providers found the Government’s response unconvincing. The Family and Childcare Trust told the Childcare Public Bill Committee that it was

“unlikely to be sufficient to address the strategic challenge the 30 hour offer presents”.

The National Day Nurseries Association found in a survey of its members that only 45% were likely or very likely to take part in the scheme. If so, the shortage of places that we already face will simply get worse. Already 45% of councils in England do not have enough places for families who work full time.

The second issue to which the Government must face up is where most three and four-year-olds access this provision. Some 58% of them are in the maintained sector, usually in nursery classes attached to a primary school. Many of those schools are on restricted sites and would not be able to expand even if capital funding were available, which at present seems fairly unlikely. There is also a bulge in the number of primary-aged children coming through the system. It does not take a genius to work out that if it is having to address a bulge in the number of primary schoolchildren as well as extra demand for nursery places, any school that can expand will expand to meet the primary provision because it has to—it is as simple as that.

At the same time, the Government risk hugely damaging the best provision in the childcare sector, which is in maintained nurseries. Some 60% of maintained nurseries are rated “outstanding” by Ofsted, and 39% are rated “good.” Nowhere else in the education system even gets near that level of supply. In their consultation on early years funding, the Government say that they want to fund all providers equally. Wherever they are, each child will receive the same amount of funding per hour. That sounds reasonable until we understand that nursery schools are required to employ qualified teachers and a qualified head, and many of the heads in this sector are very well qualified indeed. Nursery schools also provide training places for staff. They do outreach work not only with families but with other providers. The very good maintained nursery in my constituency, Sandy Lane, is based on the same site as a children’s centre and a private nursery precisely so that the three can work together, but they need the funding to do that.

We are in a position where we risk getting rid of the best provision, or hugely damaging it, where the Government are underfunding childcare and where the cost is being heaped on to parents for the extra hours they purchase. Frankly, it is a mess. It is a national disgrace that we treat our youngest children in that way. By trying to do it on the cheap, we are putting huge stress on working families. I would love to be able to say that we can deliver free childcare for all working families, but we cannot do so without more money in the system and without more training for staff.

That situation cannot be solved overnight—it cannot, I believe, even be solved in one Parliament—but we need a national strategy for early years. The Government should consider it seriously and set up an inquiry, perhaps a royal commission, staffed by experts. I know that some Government Members do not like experts, but we need them. They are experts because they know something about the subject. The inquiry should do several things. It should chart a path to, if not free, at least heavily subsidised early years provision, and it should lay out how we can grow the workforce that we need. At the moment, for instance, when we need nursery nurses the most, the number of applications for training is falling. The inquiry should also set out how we can raise the skill levels of people already working in the field.

At the moment, if we are honest, a lot of children are being cared for by unqualified teenagers, who might be nice people doing their level best but who do not have the skills necessary to develop the minds of young children, at an age at which they are developing more rapidly than at any other time in their lives and need constant care. We must amend that to give them the best. I hope that such an inquiry would have all-party support, so that we could take a consistent approach through several Parliaments.

I recognise that it will not be enough to alleviate the problems that parents face now. I urge the Government to consider seriously what they can do to support parents. The first thing that they should do is end a policy that threatens the best provision in the sector. The Government need to consider how to develop maintained nursery schools, how nursery classes attached to primary schools can expand and what capital provision can be given for that. They also need seriously to consider raising the hourly rate paid for the care of under-fives. If they do not, decent providers in the private sector will not be able to continue. Those who try to provide good, decent childcare cannot do it without proper funding. The Government should work much more with businesses to develop workplace nurseries—not simply providing vouchers, but talking to businesses and explaining why nurseries are vital to retaining a trained workforce and why they benefit businesses as well as children.

The Government should also consider giving parents decent help now with the costs of childcare, perhaps by extending child tax credit or by other methods. What is happening now is not helping families or children. We need to stop thinking of early years provision as an add-on that we think about after we have thought about the rest of the education system and realise that it is the way to tackle disadvantage and ensure more social mobility. If the Government concentrated on early years provision rather than grammar schools, they would do much better.

[Kirsten Oswald]

The point about disadvantage is key. Mark McDonald, the Scottish Government Minister for Childcare and Early Years, has identified that high-quality early learning and childcare plays a vital role in narrowing the attainment gap, which is why there is such a commitment to increasing early childcare and education provision.

[Helen Jones]

It is certainly true that it narrows the gap, but I want to make the point that it is good for all children. All children deserve the best provision that we can offer them, and we are not offering them that at the moment. We need to get a grip on the situation, for the sake of families in this country and of our children. If we do not, although we might not pay for early years provision immediately, we will pay the price further down the line in educational failure, social disadvantage and children not reaching their full potential. I urge the Minister, when she replies, to take the issue seriously so that we can at last move forward in this often-forgotten and certainly underfunded area of our education system.