Robin Walker
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Mr Robin Walker (Worcester) (Con)
It is great to see you back in your place, Madam Deputy Speaker. Both you and the late Baroness Boothroyd have demonstrated amply, on International Women’s Day, that a woman’s place is in the Chamber and preferably in the Chair of the Chamber.
I am very grateful to the Backbench Business Committee for approving this very important and timely debate, and to all colleagues across all parties and across the House who supported my bid for it. I would also like to pass on my thanks to the Liaison Committee, under whose auspices these estimates day debates take place. I pay tribute to the work that the Petitions Committee has done in this area. I have come hot foot to this Chamber from a meeting of the Petitions Committee, as has my hon. Friend the Member for Winchester (Steve Brine) and the all-party parliamentary group for childcare and early education which he chairs.
The departmental estimates briefing from the House of Commons Library shows education as the second-biggest winner after health in absolute terms when it comes to changes in day-to-day spending—the so-called resource departmental expenditure limits line in estimates—and a minor loser on capital DEL. The welcome increase in the former, however, is dominated by the impact of the revaluation of the student loan book.
As a former schools Minister, I cannot begrudge the fact that the largest proportion of the £3.9 billion increase in the education resource budget is going to schools, and I am in no doubt that the extra funding of £2 billion in each year of the next two years announced in the spending review is needed in the schools system. Nor do I in any way regret that the second-biggest winner in the education space is high needs. As we heard on Monday, the Government have overseen a 50% increase in spending on high needs since the 2019 election, which I very much welcome and support.
However, I am concerned. As the House has heard many times, early intervention is money well spent and the case for early intervention, early identification of need and early education is stronger than ever. In that context, it is deeply concerning that the only line in the departmental estimates that is clearly focused on childcare or the early years is a £52 million increase in resource DEL. That increase in spending on the early years is tiny in comparison to the overall increase in the Department’s budget, a rate of increase across the piece of just 1.4% when compared to the same line in the 2022-23 main estimate. That breaks down into an increase in early years funding for schools of £35 million, a rate of increase of just 1% and an increase of £17 million for early years funding through the families budget, a slightly more reassuring 14% annual increase.
Such numbers without context might sound very significant, but the context, as we are often reminded by the Front Bench, is that the Government spent nearly £20 billion on childcare and the early years over the last five years, and are currently spending around £5 billion a year across the various different Government Departments that support it. I do not claim to be an accountant. I do not claim to be the greatest living authority on the departmental estimates process and—pace the Prime Minister—I did not complete an A-level in mathematics, but I do know that an increase of £52 million on a budget of billions is not a big deal. In fact, the House of Commons Library’s very helpful briefing for this debate confirms that the Department for Education’s resource DEL for early years is being increased by just 1.4% from £3,781 million to £3,833 million. At a time when inflation is running at around 10%—even if we hit the Prime Minister’s laudable ambition of halving it we will be running above 5%—that does not feel like anything close to a real-terms increase.
In evidence to the Education Committee, the Institute for Fiscal Studies highlighted the problem. It submitted written evidence in November 2022, headed:
“Funding for the early years is likely to fall by 8% up to 2024 as a result of faster-than-expected cost rises”.
It set out that
“The early years sector in England received a significant uplift to its budget at the last Spending Review in 2021…but higher-than-expected inflation means even that increase will not compensate for rising costs. We estimate that childcare providers’ costs are likely to rise by 9% in total between this year (2022-23) and 2024-25. Judged against these rising costs, total funding for the free entitlement will be 8% lower in real terms in 2024-25 than it is this year.”
Steve Brine (Winchester) (Con)
I welcome my hon. Friend’s speech and I welcome his Select Committee conducting an inquiry into childcare and early education. We can talk about entitlement as much as we like, but if the settings are not there, we have a problem. The private voluntary independent sector is losing numbers. I have seen two closed in my constituency in the past six months. This is a problem. We have a supply side problem. Does he agree that achieving parity on business rates between the PVI sector and the maintained sector where an early years setting is in a school would help significantly with its in-year budget problem?
Mr Walker
My hon. Friend demonstrates his considerable knowledge and expertise in this space, and his all-party parliamentary group has gathered evidence from across the sector. I will come back to that point, because it is one of the many things we could be doing to help.
In fairness to Ministers in the Department, I know very well that they have been doing hand-to-hand combat with the Treasury year in, year out for more investment in every phase of education. In recent years, those battles have borne fruit, particularly for schools and for the high needs pupils in them. I also recall starting this year at the launch of the IFS’s very interesting report into education spending, which confirmed that over the last decade the early years has been the fastest growing area of Government spending in education and, unlike in the schools space where current increases in funding are making up for previous years of real-terms cuts, the early years budget has grown faster than any other phase of education in real terms under the Conservative Government.
By contrast, and before we hear too many speeches on Labour’s proposals for an all-singing, all-dancing £20 billion childcare offer, we should remember that it left a system with a single 15-hour offer and Department for Education spending on childcare and the early years at roughly a third of what it is today. That is the backdrop to the disappointing departmental estimate that underpins the debate.
The House will be aware, and as my hon. Friend the Member for Winchester mentioned, that I started my term as chair of the Education Committee with a call for an inquiry into childcare and the early years. I am very grateful to all the people, across parties, who elected me to that position and to all the members of the Committee who unanimously accepted that call. The inquiry is now well under way. We have heard loud and clear from the nurseries, childminders and the wider early years sector about the challenges they currently face—challenges my hon. Friend alluded to—the pressures they are feeling, and, as the IFS confirmed, the very real inflationary pressures being felt by the sector. We have heard time and again the case for more investment in this crucial sector. Although it is too early for me to pre-empt the findings or recommendations of our inquiry, I believe passionately that there is a strong case for more Government investment in this space.
Margaret Greenwood (Wirral West) (Lab)
The hon. Gentleman is making an interesting speech, and I commend him on his focus on the importance of early years education. Sarah Ronan of the Women’s Budget Group has said:
“Years of chronic underfunding have led to extortionate fees for parents, providers closing down and early years workers leaving the sector because of poor pay.”
The Government are providing insufficient funding to cover the existing 15 to 30 hours, as has been mentioned. The Women’s Budget Group is calling on the Government to address that by increasing investment in childcare by £1.75 billion. Obviously, it is about not only the welfare of children but enabling women to be in the workplace, because without affordable childcare, women cannot be in the workplace. Does the hon. Gentleman agree that it is really important that the Government listen to groups such as the Women’s Budget Group, which has a lot of expertise in this area, and consider this issue further?
Mr Walker
I want the Government to listen to many groups across the whole sector and see the case for investment. I will come later to the different elements of the case for investment, to which the hon. Lady rightly refers.
Childcare affordability is a crucial part of the argument. To date, our inquiry has heard about a perfect storm facing the nurseries and childminding sector, of parents struggling to pay the costs required to make the so-called “free hours” work, of rising employment costs and greater than ever competition for staff, and a high burden of bureaucracy. For the vast majority of providers run by the independent and voluntary sector, there is also the challenge of business rates, as my hon. Friend the Member for Winchester mentioned, which are increasing at an alarming rate, and of having to pay VAT on their investments when neither of those costs is felt by their direct competitors in school-based provision.
The National Day Nurseries Association has published figures that suggest that despite the very welcome increase in funded hours for parents, the Department—perhaps more accurately the Treasury—has knowingly underfunded the free hours so that there is a clear and increasing burden on parents and on settings themselves to cross-subsidise the two-year-old and 15 and 30 hours offers. The Sutton Trust has pointed out that 75% of childcare providers said that funding provided per hour for the 30 hours entitlement did not meet their costs, forcing them to apply charges to better-off families, including extras such as nappies, sunscreen and lunch. They say that that undermines the intention of the 30-hour policy as a free entitlement.
We have heard concerns from parents that the myriad different offers and support systems across early years are confusing, and from providers that the use of “free hours” terminology causes conflict with their customers. The reality is that these are subsidised hours, for which the state bears only a share of the cost burden. We have heard concerning statistics about the underspend in both the Department for Work and Pensions and the Treasury schemes to support childcare, because the need for up-front payments out of net income deter both parents on universal credit and those who should be benefiting from tax-free childcare from using the Government schemes. That is both part of the problem and, in my view, part of the solution. There is money that the Treasury has already approved to support childcare in the early years that is not getting spent. That money needs to be put to work to support the very real needs of parents and children.
That brings me to the fundamental point about the case for investment. The Prime Minister rightly said that education is the closest thing to a magic bullet that we have. Investing in education is a good thing and something that I have dedicated most of my time on the Back Benches to supporting. Early intervention usually pays dividends, and that is especially true of education. Many Members across the House, mostly notably my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), have repeatedly made the case for investment in the first 1,000 days of children’s lives. They have pointed to the strong scientific evidence that investment in this period has more impact on the way minds develop than any other.
The Nuffield Foundation has said that there is a strong case for additional investment in the early years, as a “foundational stage” of early development. It states:
“Given that lifelong inequalities have their roots in early childhood, this would be investment in social and individual well-being in the long term.”
An interesting research summary of “The Lifecycle Benefits of an Influential Early Childhood Program” by the Heckman Equation, states:
“Every dollar spent on high-quality, birth-to-five programs for disadvantaged children delivers a 13% per annum return on investment.”
Others have pointed to the huge productivity gains to be made from providing childcare that supports parents, particularly mothers, to continue in or return to work.
On International Women’s Day we should recognise the substantial benefits of closing the gender pay gap and allowing more women to realise their full potential, focusing not only on participation levels but on the quality of participation in the workforce. According to a PwC report published in March 2021 on women in work:
“There are large economic benefits to increasing the number of women in work.”
It estimated that the UK could gain £48 billion per annum from
“increasing female labour force participation rates to match those of the South West – consistent top regional performer for female participation in the UK index.”
A report by CBI Economics and the Recruitment & Employment Confederation from July 2022 entitled “Overcoming shortages - How to create a sustainable labour market” stated that if unaddressed, labour and skills shortages could see the economy lose £30 billion to £39 billion annually. Gingerbread has said:
“Successive research that we have undertaken pinpoints the cost of childcare as the biggest barrier to single parents in finding and staying in work as well as in progressing in their careers.”
Sometimes, including in the evidence provided to our inquiry, it has been suggested that there is some conflict between the two objectives. In reality, investment in the early years and in childcare should be a win-win. It should be good for the children, who are better stimulated, supported and prepared for education, and better for parents, who know that they can engage in work with confidence, knowing that their children are getting that stimulation in a safe setting that meets their needs. A recent report by the Centre for Progressive Policy think-tank has suggested that the economy stands to gain a staggering £38 billion, or 1% of GDP, if a fully effective childcare system could support more women to continue in careers and reap the benefits of returning to work. Others, such as Onward, have pointed to the clear desire of parents to have access to affordable and flexible childcare, and the benefits of both parents being able to deploy help from the Government effectively.
As Schools Minister, I often heard concerns from primary schools about the challenges of children arriving in schools less school-ready than they had been previously, and the greater range of measures and extra support needed to prepare them for life at school. Having children stimulated by excellent early years provision would address that challenge far more effectively and in a more timely manner than interventions or catch-up funding spent in the school years. In the noble quest of ensuring that more children leave primary school able to read, write and do maths, investment in the early years when they learn basic communication—their letters and numbers—should be a no-brainer.
Laura Barbour of the Sutton Trust told the Select Committee:
“In primary schools, 93% said that they recognised that time spent in an early years setting prior to attending primary school made a significant difference when they arrived in school, particularly for children from more disadvantaged families.”
Steve Brine
My hon. Friend is making such an important point, which is one of the reasons why the all-party group that I lead is called “on childcare and early education.” It is important that we flatten the distinction in taxation terms between early years settings and early years carried out in school. The people who run those settings—I declare an interest because my wife works in one—are early years educators. All too often society does not see them as that. I know that the Minister does, as have all previous Ministers, but all too often the discourse is about just childcare. It is not—it is early education.
Mr Walker
My hon. Friend is absolutely right, and I am glad that he has declared his family connection in that respect. We should all value the contribution of the early years and the people who work in what we might describe as childcare but is early education, early simulation and support of children. The steps that the Princess of Wales has taken to draw attention to the importance of the sector are very welcome.
Dame Andrea Leadsom (South Northamptonshire) (Con)
I have to pick up the term “early educator” because the reality is that most children start nursery when they are about six months to eight months old. It is simply wrong to call it early education—what those tiny babies need is a loving, nurturing environment. To call it early education is just the wrong terminology and sends the wrong message. What they need is love and attention. For babies who come from chaotic homes, very often that is their route to secure secondary attachment to somebody. I find that term very misleading, and I wish that we would not always use it.
Mr Walker
I recognise my right hon. Friend’s point. That is part of the dilemma of covering this as an issue from nought to five. The earliest years are not necessarily about education—certainly not in any formal sense—but about stimulation and support. My argument is that the changes that the right support and the right stimulation unlock in young brains and the progress that it allows children to make pay enormous dividends in the education system further down the road.
Siobhan Baillie (Stroud) (Con)
I absolutely love this important debate. What the country and the sector want is parental choice. Many parents are telling me that they do not have enough options because settings have closed or are too expensive. As my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) says, very young children are often better placed with their mother or father or with a childminder, nanny or au pair. There should be a range of options, but in recent years the options have steadily declined. Parental choice, underpinned by quality, is exactly what we should be hoping to achieve.
Simon Hoare (North Dorset) (Con)
Does my hon. Friend agree that a beneficial but often overlooked by-product is that people can become better parents as a result of meeting other parents? Being a young parent can be a very scary experience, especially without having had younger siblings. Beyond the benefits for children, it can be very beneficial for parents to share experiences and have conversations with other parents and with the people who run facilities.
Mr Walker
My hon. Friend, on whose Select Committee—the Northern Ireland Affairs Committee—I am happy to serve, is absolutely right. I have learned a huge amount as a result of having children in childcare and early years settings and talking to the brilliant people who look after them. It is absolutely true that the people who work in this space provide that support. I also think that the Government’s family hubs intervention will be very welcome, particularly if there is outreach and support in the community.
When we take into account the stimulation for young minds, the benefits for parents and the impact on schools, the case for investment in early years becomes a win-win-win—and that is not all. We all know about the rising tide of demand for specialist and high needs support; the Minister was very frank about it in her statement on Monday. We all know that the early identification of need is vital to children’s life chances. Picking up challenges such as autism, speech and language difficulties and hearing or visual impairments early in a child’s life enormously increases their chances of managing their condition, getting the right specialist support in place and being able to engage with mainstream education.
If the Treasury ever wants to reduce the high needs deficits that beset our local authority budgets and simultaneously unleash the potential of more young people with special needs, it needs to understand that investment in early years and in the professions that can support, identify and meet needs in the early years is a must. Investment in the early years and childcare should therefore be a win to the power of four. There can be few sectors of the economy in which there is such obvious and compelling payback.
Kit Malthouse (North West Hampshire) (Con)
My hon. Friend is quite right to use the word “investment” in this context. Has he ever come across the Tangelo Park project in the United States, which has fascinated me for many years? A local philanthropist took over a neighbourhood in Florida that was plagued by crime and low achievement—what one would refer to as a rough neighbourhood. He made two offers to the population: he said that he would pay for universal, high-quality pre-school childcare and that anybody who got into college would get it free. Obviously people normally have to pay for college there, so that created an incentive. The project has been going for 20 years and has completely transformed the neighbourhood, which has become prosperous, crime-free and a lovely place to live. If we are interested in regeneration and levelling up across everything we do, investment is about not just the individual child and their family, but the area in which they live and their community’s sense of aspiration and purpose.
Mr Walker
My right hon. Friend makes an excellent point. We had a very interesting debate on the Levelling-up and Regeneration Bill about childcare as an infrastructural issue, which I think reflected those benefits. I agree that we need social entrepreneurs to invest and play a role in this space. The private, voluntary and independent sector, which currently dominates provision, is so vital. It is important for us to work with the sector and support it rather than placing it under the pressures that unfortunately we are seeing today.
This is a debate about departmental estimates, but I am first to recognise that not all spending on childcare and early years comes or needs to come from the Department for Education’s budget. Within that budget, however, we have seen welcome commitments to review and increase the local spending on funded hours. I am proud of this Government’s record of delivering both the targeted two-year-old offer for disadvantaged children and the 30 free hours for some working parents.
Evidence given to the Education Committee makes it all too clear, however, that those welcome steps are coming under real pressure from rising costs. Helen Donohoe of PACEY, the Professional Association for Childcare and Early Years, told us:
“The number of childminders has halved in 20 years. We project that by 2035 we will have only about 1,000 childminders left in the country. That is from 60,000 20 years ago”.
Dr Grenier, a nursery school headteacher, told us that
“roughly 10% of nursery schools have closed in the last 10 years and more are due to close soon.”
Kara Jewell, a nursery director, told us:
“In 2003 when I registered as a childminder our funding rate was £3.02 per hour. It is now set to go to £4.69, so our funding rate has gone up 55.3% in 20 years while the minimum wage has risen by 131.56%.”
Emma Gardner, who is quality manager for early years and childcare at Spring by Action for Children, told us:
“I certainly think that funded places in settings that take funded children will reduce dramatically because it is just not sustainable.”
Much of the potential for real investment in this space comes through the Treasury’s so-called tax-free childcare offer and the Department for Work and Pensions’ substantial contribution through universal credit. However, our Committee has heard that neither is working as effectively as it should, and that both need reform to meet the needs of parents today. The Early Years Alliance has suggested to our Committee that the tax-free childcare policy should be stopped and that the theoretical billions set aside for it should be invested in meeting the full costs of the so-called free hours. We have heard from others that the money could be better invested in extending the scope of the subsidised offers from three and four-year-olds down to one and two-year-olds.
Against that, it is worth bearing in mind that the tax-free childcare offer is currently the only part of the system that offers parents any support for children under two or over four, so cutting it off completely would come at the expense of many who use it. I also think that it is worth exploring the true potential of actual tax-free childcare. We could make it much more attractive for parents by allowing childcare costs to be claimed against taxation for the household, as many European countries do, rather than offering a 20% subsidy on cash placed in an account from post-tax income.
There are other ways for the Treasury to help the sector that I believe are worthy of immediate consideration. It could remove business rates from the PVI sector, which provides approximately 80% of childcare in this country. It could remove the unfair burden of VAT, which holds back investment. I know that such moves would come at a cost and that the Chancellor has a hugely difficult challenge in balancing the books after all the challenges of the pandemic, but I plead that he consider the huge benefit of supporting investment in this space and the enormous upsides of better stimulated children and of more parents returning to work.
If such reforms prove a bridge too far, I hope that the Chancellor will look urgently at the massive increases in rates facing many in the sector. The NDNA told our Committee:
“Business rate property revaluation from April 2023 has seen providers report bill increases of 40-50%”.
I received clear evidence of that last week from a passionate early years advocate in my constituency who has been made an MBE for her services to the sector. She is despairing at the proposed increase of 35% in the rates for her outstanding-rated Worcester provision, which is compounded by the fact that the local funding rate has increased by just 1% for two-year-olds and 5% for three and four-year-olds while the national living wage on which many of her staff are working has increased by 9.2%.
I will conclude my speech not by pre-empting the findings of our Committee’s inquiry further than I have done already, but by quoting directly from my constituent. In a recent letter to me, Alice Bennett MBE—the founder of the Worcester Early Years Centre and the recipient of an honour in recognition of her outstanding work in the early years sector—wrote:
“I appeal to you and your Government once again for urgent reform in this nation’s early years sector. We are facing the most challenging time in decades with settings closing and talented staff leaving in droves…We all know that 90% of a child’s brain development happens before the age of 5. The research and evidence for this is utterly convincing.”
She described investing in the sector as
“morally and ethically the right way forward, thereby ensuring that every child can realise their rights and entitlements to develop their full potential and to thrive and enjoy a meaningful existence in this world. Our sector is indeed very dedicated and hardworking but we cannot continue to work for peanuts and be subject to such punitive taxation. Our lifetime legacies of outstanding and irreplaceable nurseries will be forced to close without some form of sensible revision and financial interaction.”
There is a real case for responding to that call for help.
On International Women’s Day, we should celebrate the enormous contribution to this sector of female entrepreneurs—people who have invested a lifetime of learning and labour in supporting children’s development.
I believe that we have a Prime Minister and a Chancellor who recognise the case for education and early intervention, and I know that we have a Children’s Minister who is passionate about the value of childcare and early education. I am hopeful that next time we debate the departmental estimates, they will have enabled the Department of Education to deliver a sustained uplift in investment in early years, and to build on the Government’s overall record in this regard.
Munira Wilson (Twickenham) (LD)
It is a pleasure to see you back in the Chair, Madam Deputy Speaker.
It is a pleasure to follow the right hon. Member for South Northamptonshire (Dame Andrea Leadsom), but it was slightly less of a pleasure when she reminded me of the pain of childbirth and all those sleepless nights. My children are now four and eight. She said she was freaking out potential mothers, but she was freaking me out, too, by making me relive some of that trauma. I thank her for that.
I also thank the right hon. Lady for her bravery in speaking out about her experiences at Barclays. Thankfully, most employers have moved on, and many employers now see it as a competitive advantage to keep working mothers and fathers in their workforce, but there is still far too much discrimination and pressure, so I thank her for sharing her story.
I thank the hon. Member for Worcester (Mr Walker) for securing this important debate. He and a number of Conservative Members have been pretty consistent on this issue, and it is important that we have men as allies in this debate. We heard from the right hon. Member for South Northamptonshire about various women, including herself—I also think about Jo Swinson when she was in government—who led the way on many of these issues. It is great that women did that, but men need to champion it too. As we heard, men’s role as fathers is just as important as women’s role as mothers. I am heartened to see men making that case.
I have said it before and I will say it again, but I am standing here today only because I have a husband who took the hit to his career when we had our children. I had a senior role in business before I became an MP, and I could not have become an MP, with a one-year-old and a five-year-old, without him being at home doing a lot of the childcare, the washing and all the domestic duties. I thank the men, and I ask them to continue championing this cause alongside us.
This is an estimates day debate, so we are here to discuss Government spending on childcare and early years. To be honest, it is incredibly difficult to disagree with anything the hon. Member for Worcester said. We are on the same page, and at times it felt as if he was reading parts of my speech, so I apologise for the repetition.
I hope that Treasury Ministers and officials, as well as the Minister for children, are listening carefully, because Members on both sides of the House are making the same point. The view of the Liberal Democrats is that the Government are not spending enough on childcare and early years, plain and simple. They are not spending enough to give all children, particularly those from the most disadvantaged backgrounds, the high-quality early years education they deserve.
The Government are also not spending enough to make childcare genuinely affordable when parents decide the time is right to go back to work. The point has been made about the importance of choice. As I have demonstrated with my own example, every family are unique and need to have a range of options to suit their personal circumstances. The current system does not make that possible.
The Government are not spending enough to ensure that providers are able to stay in business, so that parents can find a place for their child. We see the impact on children, parents and providers, and I have some statistics to back up that point. Before the pandemic, children in reception on free school meals were, on average, 4.6 months behind their peers, and that gap has widened since 2016. As has already been said, early years is where investment can make the biggest difference to children’s life chances.
We know that a typical couple in the UK have to spend, on average, about 29% of their wage on childcare, which compares with 19% in the US, 15% in Canada and less than 10% in France, Germany, Sweden and Japan, according to the OECD. A year ago, a survey by Pregnant Then Screwed and Mumsnet found that for most parents of young children, childcare now costs the same as or more than their rent or mortgage payments. The right hon. Member for South Northamptonshire talked about £50 a day for a tip-top nursery, but I can tell her that in south-west London people are looking at £100 a day, if not more, for a tip-top nursery. Frankly, this is unaffordable and people are spending more on childcare than on their rent or mortgage payments. Some people’s mortgages increased as a result of the mini-Budget we had back in November, but I am not sure that was the solution the Government were looking for to address the disparity.
The other issue we face relates to childcare providers, as more than 10,000 of them closed last year, with a net reduction overall of 4,000. I wish to pay tribute to June O’Sullivan, from the London Early Years Foundation, who has been doing a lot of work on this issue. A lot of providers have gone under in more disadvantaged areas. As a result of the LEYF’s social enterprise model, it is able to invest in provision and settings in more disadvantaged areas—doing so, in essence, by subsidising from where it runs nurseries in more affluent areas, including my own. I visited one of its nurseries in Teddington, which is run for employees of the National Physical Laboratory in my constituency, to hear about how the LEYF is cross-subsidising to enable all parents, whatever their background, to access good, high-quality childcare.
On International Women’s Day, it is worth emphasising that the lack of affordable childcare hits women the hardest, as we have heard. The proportion of mothers in full-time work drops dramatically when their child turns one, falling from 49% to 31%, and it does not recover until their youngest is 14. On average, women’s earnings take a 40% hit when they have their first child and never recover, whereas men’s earnings take barely a hit at all—I will not tell my husband that! According to the Department for Education’s own survey, 53% of non-working mothers with children under five would prefer to go to work if they could find convenient, flexible, reliable, affordable, good-quality childcare.
I want to say a couple of words about single parents, because they are often overlooked in this debate and I have heard from single parents in my constituency. One of them said to me, “Look, staying at home is not even an option for me. I’ve got to go out to work. The costs are crippling.” I heard from another constituent who is on a very good salary and does not live an extravagant lifestyle. She is a single mother of twin two-year-olds, so she has two children whose childcare she has to pay for. She is on a good salary and lives in a two-bedroom home, but after all her living costs, before childcare, she has only £250 a month left to spare. So her childcare costs of more than £2,000 a month are having to come out of her savings. She appreciates that many other people are in a far worse position; at least she has some savings to pay for it, so that she can continue to work. However, until such time as her children go to school, she will be coughing up a further £75,000 in childcare costs—it is just astonishing. This issue is having an impact on people right across the income scale, because the current system is in a mess and is inadequate.
As we heard eloquently from the hon. Member for Worcester, the Government are massively underfunding the free hours entitlement. As he said, it is not free; it is subsidised. My son came out of childcare just last August or September, so I can tell the House that I was massively topping up the free hours I was getting. All sorts of jiggery-pokery with the invoices was done, because childminders and nurseries are told not to show that they are charging for those free hours, because they are not technically meant to, but everybody knows it goes on. Again, it is okay for me to have to pay for that, but, unfortunately, many people from much more disadvantaged backgrounds cannot pay for that top-up in care. The Department’s own data show that the average rate paid in respect of three and four-year-olds in 2020-21 was £4.89 per hour, which was less than two thirds of the Government’s own estimate that that provision cost on average £7.49 per hour. As has been said, in London the cost is even higher.
We have heard already that the take-up of the Government’s tax-free childcare offer is just 40%, and more than 750,000 eligible families across the UK did not benefit from it in 2021-22. So we definitely need—
Mr Robin Walker
At the risk of encouraging the hon. Lady to further think we agree on everything, may I ask whether she thinks it extraordinary that, even out of that relatively low take-up, about half the people opening an account for tax-free childcare are then not using it? That shows the huge challenge of the clunkiness of the current system.
Munira Wilson
I could not agree more with the hon. Gentleman on that. Embarrassingly, I have to confess that even I did not understand or appreciate what was available to me—I was not that well educated on that. When I got elected to this place in 2019, I could no longer get childcare vouchers from my former employer, which is what I had before, and so for many months I did not benefit at all from the tax-free allowance. I then realised that I could open up this account. I did not know that for my eldest child, who is now at school, I could use it to pay for wraparound care; I thought it only applied until my children started school. I confess that I did not know this, so I am sure that many parents out there just do not know what is on offer to them. We need a much better public information campaign about what is on offer. The other point to make on how the system is not working is that the maximum childcare support in universal credit has been frozen since 2016, which means that it covers fewer and fewer hours for those low-income families.
The hon. Gentleman delicately pointed out that early years provision has been somewhat overlooked by the Treasury in some of the recent funding settlements for the Department for Education. Let me put it slightly more starkly: based on what was announced in the autumn statement in 2022, setting the core schools funding aside, the rest of the Department’s day-to-day spending, which includes the early years, is set to be cut by £500 million, or 2.3%, in real terms over the next two years. If that means a cut for early years provision, as logic would dictate it does, that would be disastrous and short-sighted. I hope that the Minister will specifically address that point about the budget for early years provision in the next few years.
The Liberal Democrats have set out a clear plan for childcare that is flexible, affordable and fair. We believe the Government should expand the offer of free, high-quality childcare for all children aged two to four, not just in term time, but year round. Crucially, the Government should also raise the rates paid to providers to match the actual costs they face. The Government also need to plug that gap between the end of parental leave and the start of free childcare, which leaves many parents without the choice or control to which we have alluded.
As others have said, investing in our children’s early education is one of the best investments a society can make, and we need to see it as exactly that—it is an investment. Childcare is an essential part of our economic infrastructure. For many parents, it is as important and crucial for getting to work as railways and road. Employers, finally, are seeing that and making the case, and I congratulate the CBI and other employers’ organisations that are making that case. I hope that if the Treasury will not listen to me, it will listen to Conservative Members, to those employers’ organisations and, crucially, to parents in all our constituencies, across the country. It is time the Government started treating childcare and early years as crucial infrastructure and investment in our children, and funding it properly. I really hope that next week we hear something substantive from the Chancellor on this issue.
Siobhan Baillie (Stroud) (Con)
It is a pleasure to follow the hon. Member for Putney (Fleur Anderson); having heard about her experience with four children, I take my hat off to her. I did do a little bit of preparation for this speech today as I was haring down the road, late for my daughter’s nursery. In proper slummy mummy style, I saw it was snowing and raining, so I wrapped her in a carrier bag, gave her a broken umbrella and started running—and we were still late. At one point I looked at her and thought, “God, you’ve got gunk in your eyes, they’re going to turn me away at the door and I’ve got a Select Committee,” but it turned out to be porridge from her sister—God knows how it got in her eye.
I tell that story to make people laugh, but also because the chaos of little children and children as they are getting into school is real life. It is reality and, no matter where we come from, what our education is or what our job is, it is really hard graft. Many families are pulling in grandparents, brothers and sisters, aunts and uncles, using child nurseries, childminders, nannies and au pairs—it is a real patchwork. We should be open to many different options to support families in all their weird and wonderful different set-ups.
Everyone knows I am a proper pest on childcare. I started campaigning on this issue way before I had my own children, because I saw clearly that it was very serious. It is not just a women’s issue, much as I would love to be able to say it is on International Women’s Day; it is an economic issue, a health issue and a mental health issue. It affects businesses, particularly the ability to recruit, because while we have a high participation of females in the workforce in this country, they are not working at full tilt in many respects—many because of childcare and many because of the cost of childcare.
One little thing that is not talked about very often is that the transition to parenthood for couples— married, not married or whatever—is one of the hardest times of anybody’s life. If there are additional childcare stresses, chaos, nonsense and costs, we could see parents breaking up because of all that pressure, and we know the impact of family breakdowns on society, on the country and particularly on children. That needs to change, and it is really important that we are focusing on it.
I am a huge fan of my hon. Friend the Member for Worcester (Mr Walker)—I hang on his coat-tails and on his every word on this subject. I am grateful that his Select Committee is producing a report, because I think the Walker reforms, as they come forward, will be quite pivotal in what the Government may do.
On a political point, I get a bit fed up with the Opposition talking about under-investment and saying that everything is absolutely dire. Let us look at the Labour party’s record in government—I know that that was a long time ago, but it is not our fault that it has not won any elections—when investment in childcare and early years was about a third of what it is now. We are spending £5 billion to £6 billion of taxpayers’ money on childcare support. I am one of the biggest champions for change, but it is wrong to say that this Conservative Government have not invested in childcare; it is right to say that we should use that money a little differently and consider the schemes.
We have eight schemes at the moment. We know that they have various degrees of success and that there are bureaucratic nightmares in some respects, so there are definitely changes to be made, but I want to get to the point where we have more parental choice, absolute stellar quality across the sector, and a sector that is loved and respected for its experts. Regardless of how they work in the early years workforce, they are experts and we charge them with looking after the most precious things in our lives, so I want the childcare and early years sectors to be loved and put on a pedestal, exactly as we do with teachers. At the moment, that is not the case, and that is part and parcel of why attention and funding do not go to that area.
I have not just been carping and sniping from the sidelines. I have put some effort in and worked with those at the fantastic think-tank Onward, who are the most brilliant super-brains. We came up with the “First Steps: Fixing Childcare” report. I will run through its six headline recommendations.
We want to get to a point where we are empowering parents through a new system of childcare credits. That deals very much with choice and ensuring that any state support can be used in a more bespoke way. At the moment, some state subsidies cannot be used for a childminder who is not Ofsted-registered, for example. That is wrong. We need to ensure that if parents are comfortable with quality and safety, and safety standards are met, they can use state support in any way that they want.
We would like to investigate the front-loading of child benefit. Our understanding is that the first 1,001 days are the most important in a child’s life, and all the evidence is there—it is 40 years old—so let us look at some different models. They might not work, but I think that it is important that we model that because there may be some unintended consequences. Disadvantaged families have told me that they would be worried about that change. We would have to model that, but I think it is worth having a think through whether child benefit could be changed.
I would like to see a reform of parental leave by abolishing separate maternity and parental leave in favour of a single parental leave scheme. Parents would have a shared entitlement of about 12 months. Again, we can look at the research and consider the unintended consequences, but that is something that we could get to.
We could expand family hubs. As we heard, my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) has done an amazing amount of work on that. Family hubs are not just like Sure Start centres. They deal with the period before birth, when women are pregnant, all the way through to late teens and into adulthood, and beyond for children with special educational needs and disabilities. My nephew has Down’s syndrome, and he will have support until he is 25. The family hub will be the perfect place. That is quite different from the previous offer from previous Governments.
I have great fondness for the Sure Start centres, but I think that it is absolutely wrong to say that every single one of them was performing brilliantly. Having spoken to people in Sure Start centres and thought about this as a councillor, I know that a lot of the centres were not doing outreach, so the same parents came around and around from the very early years. Let us be honest about and learn from the challenges, and make changes so that family hubs work well. Someone told me recently that there were more Sure Start centres than McDonald’s in the country. I have not checked that, but there are a lot of centres, and we should be able to champion them and keep them there if that is what the local area wants, but we should also consider family hubs.
I want to see some prioritisation of childminders and childminding agencies—I could talk about this for a very long time. At the moment, we have lost about 50% of our childminders through a lot of heavy-handed regulation, not necessarily from our Government but over a long period. They are often women who have a lot to add to the workforce as well as providing childminding services. We should be able to stimulate the childminder market, particularly through childminding agencies. As other hon. Members have mentioned, there is an inequity in the fact that private childcare settings have to pay business rates, but state settings do not. That inequity needs to be ironed out and, ideally, knocked out.
Again, I think we should look at the training and education of the early years workforce, because they are absolutely wonderful people. As a lawyer, I had to do continuing professional development. We want to make sure that that is baked into the system, and that the early years workforce are respected for that CPD if they are doing it.
Mr Robin Walker
I realise that I have banged on a lot in this debate, but on my hon. Friend’s point about training and CPD, one of the really good things we were able to do during my time at the DFE was invest in national professional qualifications for the teaching workforce. There are NPQs for the early years workforce, but the challenge is that those qualifications are focused on those parts of the workforce who work in schools. Would it not be great if, as part of the investment in this area, the Government were able to widen the reach of those NPQs to people who work in the private and voluntary sector within the early years workforce?
Siobhan Baillie
I absolutely agree with my hon. Friend. We need to be able to focus on training and look at all the options, because the workforce are really keen on CPD. It is often quite a vocational profession: people grow up wanting to be childminders, often because they love kids. I mean, I come to this place for a rest—I could not do it. I have massive respect for that workforce, because I could not do what they do. Those people are in the job for a really good reason, but they often fall out of it because the pay is really low and there is not that ongoing professionalisation and earning of qualifications, or the building up of skills.
I am grateful to the DWP Select Committee, particularly the right hon. Member for East Ham (Sir Stephen Timms), because we have carried out a full investigation of the childcare element of universal credit. That has been really helpful, because we have discovered through evidence that the up-front payments are causing huge problems for parents on universal credit. Basically, what is happening is that every new term, parents are begging and borrowing to pay for that term’s childcare, and then they get 85% of that money back through universal credit. That is a really good offer, but families are getting into debt to make those up-front payments—not just once, but every single term—and then the money comes back through universal credit in dribs and drabs. It does not come back with a label saying, “This is for you to repay your childcare bill.”
That approach is causing real trouble, and as we have heard from other hon. Members, the cap has not been uprated. It is a really good offer from the Government and the DWP under universal credit, but only 13% of families are taking it up because it is a complete mess. I appreciate that it is not the responsibility of the Minister’s Department, but the fact that universal credit childcare claimants are not using this system, or they are using it and the money is paid all over the place, is having an impact on the childcare sector, which is directly under the Minister’s control. Again, I am really grateful to the whole of the DWP Committee for looking at that issue.
As we can see, this is not all about money: some of it is about regulation, safety and quality. Parental choice is high up there, but there are things we can do that are—to use an awful phrase—low-hanging fruit. I urge the Government to get things done. I have been putting a lot of pressure on the DFE, the DWP, No. 10 and the Treasury, particularly ahead of next week’s fiscal event, and I am also grateful to all the national newspapers that keep covering this area; The Sun, in particular, is very interested in the universal credit childcare issue. The support that it as well as the whole childcare sector in my constituency of Stroud has provided has been incredible. As all Opposition Members know—as the whole House knows—this issue is coming up on doorsteps. It is something that needs to be addressed, so the fact that we are looking very closely at funding is important.
I have had to be really hard-headed about this issue, trying to find solutions. I would absolutely love to do what some parties are doing: go around saying that we can provide universally free childcare from nine months to 11 years. I would love to be able to make that offer and say that that is going to happen very quickly, because parents are obviously very desperate at the moment to see change, but I do not think that would be the right thing to do. The hon. Member for Dulwich and West Norwood (Helen Hayes) and I had an exchange on this topic before, when I asked how much that policy is likely to cost. I know that the Labour party has not costed it yet, because it is working on other policies.
Mr Robin Walker
I thank the Minister for that response and for setting out some of the areas in this space beyond the departmental estimates in which the Government are investing. I think we have had great consensus across the House on the need for and the benefit of more investment in early years and childcare. There is recognition of some of the steps that the Government have already taken, and recognition also of the enormous opportunities if we can go further.
I do not have time to pay tribute to everyone who has spoken, but the hon. Member for Coventry North West (Taiwo Owatemi) spoke about a business owner working for less than minimum wage. Sadly, that is not a unique circumstance for us to come across.
The hon. Member for Twickenham (Munira Wilson) was kind enough to refer to me as an ally. I assure her that I will not always be one in debate, but she has contributed powerfully to this debate. I thank her for her support, and that of many of her colleagues, on this issue.
The hon. Member for Hemsworth (Jon Trickett) quoted the same thing as me from the IFS about the current cost pressures facing the sector and the fact that it is not seeing real-terms increases. However, he neglected to quote the figure pointing out the real-terms increases in early years funding over the last decade, and that the actual funding is roughly treble the level that it was when Labour left office.
Mr Walker
And, no, I am not going to give way to him on that.
My hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) made a fantastic speech, bringing the expertise of his immense experience in local government to this Chamber.
The Minister has heard from across the House on this issue. I hope that she will carry that message to the Treasury, and that we will see progress on this area in short order.
Question deferred (Standing Order No. 54).
House of Commons Commission
Resolved,
That Mrs Sharon Hodgson be appointed to the House of Commons Commission in place of Mr Nicholas Brown in pursuance of the House of Commons (Administration) Act 1978, as amended. —(Jacob Young.)
Public aCCOUNTS Commission
Resolved,
That Mrs Sharon Hodgson be appointed and that Mr Nicholas Brown be discharged as a member of the Public Accounts Commission under section 2(2)(c) of the National Audit Act 1983.—(Jacob Young.)
Mr Deputy Speaker (Mr Nigel Evans)
I will now suspend the sitting until 7 pm, when we will take all the remaining business, including the petitions. The bells will ring a couple of minutes before the sitting resumes.