Childcare: Affordability and Availability

Tim Farron Excerpts

Tuesday 21st February 2023 Westminster Hall

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is a great pleasure to serve under your chairmanship, Ms Fovargue. I congratulate the hon. Member for Brentford and Isleworth (Ruth Cadbury) on introducing a really important debate; it is one that I, like all Members present, am passionate about. The hon. Lady made an excellent speech. I just want to say a few words—I will hopefully take less than six minutes—to contribute to the debate.

The Government’s position on childcare is clearly that the best way to tackle poverty is to have people in work, and therefore providing childcare is about making sure that people can work. It is also about the vital importance of early years, and how we develop young people from their earliest point so they can have the advantages that many would like in later life. I do not need to go into it now, but all the evidence suggests that the first two years of education are more important than any other part. Although it is about allowing people to go to work, it is not just that; it is about ensuring that every young person has the same chance in life, whether they are from a difficult background or a privileged one.

Looking at the stated objective of tackling poverty by getting people into work, and therefore allowing parents to work, the extremely high cost and limited availability of childcare is making work unaffordable for many people. I have a few examples from my constituency in the last week. A constituent who contacted me has a five-year-old and an 18-month-old. She is a teaching assistant and wants to return to work, but childcare for the 18-month-old is so expensive that there is simply no point. The childcare cost would be more than her wage. That speaks for many other people and their experiences, too.

Another mum got in touch with me, telling me that she spends more on childcare than she does on her mortgage. She calculated that she will spend about £63,000 on childcare for her two children before they go to school. That includes the 30 free hours and a couple of days a week covered by family. She works for the NHS, but she is considering leaving her job. Another constituent was a nurse at Westmorland General Hospital. She wanted to return to work after having her daughter, but her pay would not be enough to cover the childcare bill. She would earn less money if she returned to work. If we want people to be in work, childcare must be accessible and affordable.

The Government’s approach is hugely damaging for the families concerned and for the children who miss out, but their failure to keep up with the necessary funding is also massively damaging the providers. Good people who provide good childcare places are determined to meet all the requirements, ratios and everything else, and yet they are being hit. In a March 2022 survey of early years providers, 88% said that the funding they receive from the Government for free childcare provision does not cover the cost of delivering childcare places.

Thanks to the hard work of the Early Years Alliance, a freedom of information request in 2021 found out that the Department for Education had confessed that a funded place for three and four-year-olds would cost an average of £7.49 per hour. That was two years ago. The actual rate paid to providers was only £4.89. Even the Government know they are massively short-changing our providers, and therefore our children and their parents.

We have seen closures in my constituency and throughout the rest of Cumbria. In the last seven years, six childcare providers have closed down in Kendal alone, and we have a childcare provider suspended in Appleby. The consequences for people who are trying to work and for their children are enormous. The maximum monthly cap for the childcare element of welfare benefits has not risen since April 2016. If it had risen in line with consumer prices index inflation, which is the usual mechanism, the maximum childcare cost cap would be 22% higher than it is currently. That equates to £145 more per month for one child, and £249 more for two children.

I will make a few recommendations for the Government before I shut up and sit down. First, we could increase the child element of universal credit by at least £15 a week and abolish the benefit cap. We could offer free, high-quality childcare for every child aged two to four, and for children aged between nine and 24 months whose parents or guardians are in work 35 hours a week, 48 weeks a year. That will be in the Liberal Democrats’ manifesto. We could overhaul the annual uprating of benefit levels so that rates always keep pace with prices and living standards. Childcare support through universal credit needs to be paid up front, because that is what excludes so many people from making use of it.

We have heard that there is a cost incurred in funding childcare provision. Yes, there is, but by not doing so we incur a bigger cost. In my constituency, we have a limited workforce with a high average age, and yet we have huge demand for work, and lots of people are not able to be in the workforce simply because of this issue. For a variety of reasons, including this one, 63% of all employers in hospitality and tourism—the biggest employer in my constituency—were working below capacity last year because they could not find enough staff. There are other factors behind that, but one factor is that people desperately want to work and cannot afford to. Can we afford to cover the cost of decent childcare? I argue that we cannot afford not to.