Childcare: Affordability and Availability

Stella Creasy Excerpts

Tuesday 21st February 2023 Westminster Hall

[Stella Creasy (Walthamstow) (Lab/Co-op)]

There is a simple problem here. For some families, having childcare is the difference between being able to work or not. What should those families do with a child that is perhaps between the ages of six months and two years when there is no support at all? A six-month-old baby could be left in a cupboard at work, I guess, if that is the logic behind this. By the time they are one year old and they are crawling and walking around, that is not feasible, yet the subsidies kick in only at two years old. It makes no sense at all.

[Ruth Cadbury]

My hon. Friend is absolutely right. I could not take my babies around to meetings and so on after about four months. At that point, I needed either not to attend and not to go to work or to make sure that they had childcare.

Research in this week’s Guardian shows that there are fewer places in less affluent parts of the country. The settings are also more likely to be lower quality.

If I might add to my hon. Friend’s point, one woman wrote to me saying that she is a high earner and that when she got pregnant she worked out she could just about afford to go back to work—until she discovered she was expecting twins. Because of the cost between six months and the two or three years when funded provision comes in, which would help her a bit, she was in a desperate state.

The cost to parents and providers is rising, the funding for the free entitlement does not cover providers’ costs, and the current system of Government support is complex and leaves many gaps. There is also a quality gap affecting less well-off areas and poorer families. This crisis has been fuelled by 13 long years of this Government not acting. Before I finish, I want to ask the Minister a few questions.

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[Stella Creasy (Walthamstow) (Lab/Co-op)]

Thank you for coming in at short notice to chair this debate, Ms Fovargue. It is hugely appreciated, I suspect, by the thousands, if not millions, of mums who are just fed up. Because we are: we are fed up. For generations, we have debated this issue in Parliament as though people are talking Klingon—as though it is something that is beyond our reach or our capacity to resolve. I think the dads are pretty fed up, too, because they are not getting to be with their kids. Outside this place, that is the norm: parents want to spend time with their children and find ways of working that allow them to do so. Our childcare system, unlike those in many other countries, militates against that.

There is no other area of public policy where we accept—nay, celebrate—the idea that there will be a struggle and a juggle. Nowhere else do we think that if people are not struggling and having a miserable time—unless they are incredibly wealthy and have multiple nannies and people to stay at home with them—they are doing it wrong. Let us change that; let us have a different debate in this place. Let us come together across political parties to say that is it not enough to keep talking about this and worrying about extra hours here and there. I agree with the hon. Member for Stroud (Siobhan Baillie) opposite that tinkering around the edges will not do. It is time for a fundamental rethink of how we do childcare in this country, not least because of the impact on children themselves. That was pointed out by my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury), who secured this debate, for which I thank her.

The very simple question we all need to ask ourselves is: at what age do we think children start learning? When I look at my 18 month-old son and what he can do with an iPad, I know that it is very early on. We invest in children because they are our future, and yet our system does not reflect that thinking. We cannot solve the cost of living crisis unless we solve the cost of childcare. As we know, multiple families are now spending more on childcare than on their rent or mortgages. The number of women in this country who are economically inactive because of caring responsibilities is increasing; it has risen by 53,000 in the last year alone. Those women cannot get the decent childcare they need to be able to make it work for their families, and the economic impact of having them out of work is felt by us all.

That is the argument we need to take to the Treasury. With the greatest respect to the Minister, who I have no doubt is doing that, I want to see Treasury Ministers here, explaining why we are not investing in economic infrastructure—because that is what childcare is. Just as good roads get people to work, so too does good childcare. Yet, too often, we act in this country as if the opposite is true; as though we are doing mums a favour by providing childcare, giving them a couple of hours to go to baby yoga, rather than recognising that it is about how families balance their different commitments.

That is why I encourage the Minister to support the amendment that is being supported by Conservative colleagues of hers in the Lords right now, to make sure that we treat childcare as infrastructure and that local authorities are able to invest in it. Over the last five years, only 0.06% of developer contributions have been spent on childcare—that is just £1 in every £1,167 spent —yet we all know that when we build new flats, we are going to bring in new families. What are we supposed to do with them?

I encourage the Minister to take up the point made by the hon. Member for Stroud about the eight separate schemes. Of course, there is money there that could be better spent. I think of the 1.4 million children who are eligible for 20% off their childcare via the tax system but for whom it is not claimed. I do not think that is just because the system itself is completely bonkers; it is because so many families who want the help the most cannot afford to stay in childcare to the point where it is subsidised.

Of course childcare should kick in when a child is born, so we need to reform our maternity provision, but we also need to look at provision for children from six months on. We need the system to be universal, because that is when it pays for itself. The evidence from other countries makes it incredibly clear that it can help more families to stay in work, and it can help more women to keep their career and keep their caring commitments.

Some 85% of providers of childcare in this country are operating at a loss. This is not an industry that needs us to tinker around the edges. It needs investment to get us to a point at which there is a return. There is no area of economic policy in which investing leads to saving so clearly as in childcare, yet in this country we still act as if it were an optional add-on to an economy that is already struggling with productivity issues.

The fact that there are 5,500 fewer providers than a couple of years ago attests to how the system is not working for anybody. It does not work for the industry: these wonderful people caring for our children are professionals, so we should value their professionalism rather than playing it down. It does not work for the mums and dads who are looking at astronomical costs. It does not work for our economy. It certainly does not work when we tinker around with ratios or when the Secretary of State for Work and Pensions sends a letter to women who are out of work, telling them they really ought to think about going back.

What works is investing early. The £2.8 billion that is sitting unused and unclaimed in the Treasury’s coffers, just for the tax-free childcare system, could be spent right now on childcare. It could be invested in getting early years right so that in the next five to 10 years we will have a universal system that matches those of our economic competitors.

I say thank you to Pregnant Then Screwed and Mother Pukka—to the people who have refused to let politicians take the issue off the agenda. During the pandemic, when we were patting parents on the back but investing in potholes, the message from those mums was, “Up with this we will no longer put.”

In my final 15 seconds, I want to let Ministers know that “This Mum Votes” is not just the name of a campaign; it is a statement of intent. If we do not get this right, mums and dads around this country will not forgive the political party that has yet again put childcare in the box marked “Too difficult to deal with”. Children who deserve the best future need us now to stop messing around and start investing.

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[The Parliamentary Under-Secretary of State for Education (Claire Coutinho)]

It is pleasure to serve under your very welcome chairmanship, Ms Fovargue. I congratulate the hon. Member for Brentford and Isleworth (Ruth Cadbury) on securing a debate on this important subject. It is genuinely a pleasure to come to these debates. I see the faces who come here regularly, who bring interesting information, and I genuinely like taking part in these debates.

I know how important the early years are. I have worked on families policy for a long time. Not only are the early years crucial for children’s development, we also want families to benefit from the childcare support they are entitled to, both from a cost of living perspective and in enabling parents to work. I spend a lot of my time visiting the sector, and I recognise that it is a challenging time. It has been a privilege to spend so much time there. I am always impressed by the dedication of staff, who work absolutely tirelessly to give our children the best start in life. It is a credit to them and this country that 96% of providers are rated as good or outstanding. My hon. Friend the Member for North Swindon (Justin Tomlinson) mentioned Becky at Imagination Nursery. It was just wonderful to see the dedication of Becky and her wider staff, and the brilliant environment that I know his daughter is enjoying.

I will start by talking about funding, which has been mentioned multiple times. It is fair to say that it was a Conservative Government who increased funding. Not only did we expand the offer for three to four-year-olds, we also introduced a specific offer for disadvantaged two-year-olds. We have also looked at other things to give wider support, such as family hubs or holiday activity schemes, which I will talk more about later.

We have invested more than £3.5 billion in each of the last three years on our early education entitlement. We know that the sector, like many sectors in the country, is facing economic challenges. We announced additional funding of £160 million in 2022-23, £180 million in 2023-24 and £170 million in 2024-25, compared with the ’21 settlement, for local authorities to increase the hourly rates paid to childcare providers. I want to assure everyone that we continue to look at the matter. How we can improve the cost, choice and availability of childcare is important to me and to the Government. 

As well as supporting families, it is also important that we help early years providers continue to do what they do best, which is educating and developing young children. From 2023-24, we are investing an additional £20 million in early years, on top of the £180 million announced at the spending review, to help with national living wage costs. These funding increases will take place across England, so I am pleased to say that in the constituency of the hon. Member for Brentford and Isleworth, the funding rate for two-year-olds will increase by 10% to £6.92, up by 63p per hour. We have also announced an additional £10 million for maintained nursery schools’ supplementary funding from 2023-24 and are introducing a minimum and maximum hourly rate that local authorities can receive for their maintained nursery schools to create a fairer distribution of the funding.

I want to talk about families. We know that childcare is a key concern, as ably raised by many hon. Members today. We recognise that cost of living pressures are affecting families across the country and we have been looking at a range of measures to directly support households. One of our key areas of support has been the 30 hours’ free childcare entitlement. It was introduced in 2017 and has helped countless working parents. Nearly 350,000 children were registered for a place in January 2022, which saved those families up to £6,000 per child per year. That is making a real difference. Our 2021 childcare and early years survey of parents found that 73% of parents reported having more money to spend since they started using the 30 hours and 38% thought that without those 30 hours, they would be working fewer hours. We also remain committed to that universal 15 hours of free early education, which is helping more than 1 million children this year.

Government support for childcare is not just for three to four-year-olds. In 2013, the coalition Government introduced 15 hours of free childcare for disadvantaged two-year-olds and in January 2022, 72% of eligible two-year-olds were registered for a free early education place and more than 1.2 million children have benefited since its introduction. I think I heard the hon. Member for Edinburgh West (Christine Jardine) say earlier that the take-up in Scotland was about 46%. Clearly, we want to do more and I urge all hon. Members to encourage all their constituents to take up places where possible. In September 2022, we also extended eligibility for the entitlement to children in households where no recourse to public funds applies.

On the low-income household point mentioned by my hon. Friend the Member for Leigh (James Grundy), we have introduced two things. The first is the holiday activity fund schemes, and the data that shows children using the scheme for the first time and saying that that is the first time they have accessed some kind of activity scheme in the holidays has been buoying. The second is family hubs, about which I am passionate and on which I worked before becoming a Member of Parliament. We are rolling them out to 75 local authorities in the most disadvantaged parts of the country. I have visited several of them and they are doing very good things.

My hon. Friend the Member for North Swindon and the hon. Member for Brentford and Isleworth mentioned another matter that is, again, dear to my heart: SEN. I see more of that when I go to nurseries, and when I talk to providers, they are worried about both the aftermath of the pandemic and having the right skillset to make sure they deliver for those children. We are training 5,000 early years staff to be special educational needs co-ordinators and I will also bring forward SEN reforms in the near future that will help with setting out what people can do. Recently, I was talking to Julian Grenier at Sheringham Nursery School and looking at some of its schemes, such as talking time, which will help with some of the speech and language challenges that have come out in the aftermath of the pandemic. It is an area that is very important to me.

It is crucial that as well as being affordable, childcare is easily accessible. We constantly monitor the sufficiency of childcare places and at the moment, local authorities report that they are fulfilling their duty to ensure sufficient childcare. However, we continue to monitor that carefully. I acknowledge that one of the things I hear a lot when I talk to providers is the challenge around recruitment and retention, and I am keen to focus on that.

My hon. Friend the Member for Stroud (Siobhan Baillie) also mentioned childminders. The majority of people that have come out of the system are childminders. I have been very privileged to shadow childminders and see the work that they do. Often, people do not realise that their outcomes are just as good as those of nurseries. They do a tremendous job and it is important to me to look at the reasons that they are leaving.

The majority of early years childcare places in England are provided by private, voluntary and independent group-based providers. I pay huge tribute to their work. The hon. Member for Upper Bann (Carla Lockhart) gave a very moving tribute to her children’s own childcare providers. I can see her smiling now at the work that they do. I reiterate my thanks to those in the sector. They work so hard day in, day out in challenging circumstances to ensure that they provide children with the best start in life.

I thank the hon. Member for Brentford and Isleworth for securing the debate. The early years sector is an integral part of our economy and education system, so my Department treats any changes to the system carefully. Our childcare offer is co-ordinated with other Departments to give parents a range of options, depending on whether they want to receive childcare in a formal, nursery-style setting or from a childminder in a home.

[Stella Creasy]

On that point, I think the Minister is starting to talk about one of the challenges: where money has been set aside for childcare, but has not been spent. She spoke earlier about the not-100% take up from those who are entitled. Since the scheme began to give parents 20% off their childcare costs, an average of £2 billion to £3 billion a year has gone unclaimed. Given that it started in 2017, we are talking about a possible £17 billion that could go into tackling these challenges with the cost of childcare. Before she sits down, what conversations has the Minister had with the Treasury about getting our £17 billion of tax that parents have paid into the system back, so we can put it into paying those who care for our children properly?

[Claire Coutinho]

The hon. Lady will know that underspends in government do not sit there and pile up; there is not £17 billion in a pot somewhere that has not been used. It has gone into lots of things, whether that is increasing hourly rates or the massive overall increase to the education budget of £2 billion over the next two years alone.

I talk to the Treasury regularly about tax-free childcare. I agree that it is not used enough. Many parents could be benefiting and we want them to benefit. We started the childcare choices campaign last year. The uptake of tax-free childcare has actually been quite good. I think it is about 30% from memory, but I will go away and double-check the figures. Of course, we need to do more and, of course, I would love to see more parents use that.

Finally, I reassure all Members present that my Department continues to evaluate what more can be done to help parents access a childcare place that not only suits their working arrangements and family circumstances, but gives their children the best possible start in education. I look forward to working with the hon. Member for Brentford and Isleworth in the future to hear her further thoughts about making our childcare system the best it can be.