Free Childcare

Tulip Siddiq Excerpts

Monday 21st November 2016 Westminster Hall

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I pay tribute to my hon. Friend the Member for Warrington North (Helen Jones), who opened the debate, for all the work she has done in raising the importance of the issue we are debating. She said at the beginning of her speech that she was not very savvy about technology, but she has done an amazing job, not just by having web chats but by engaging a record number of people on Facebook—mothers and fathers from across the country. It is not just about social media, however; it is about the number of face-to-face meetings she has had, the amount of research she has evidently done and the personal experience, as a secondary schoolteacher, that she has brought to the House. There are lots of people in Government who might not believe in experts but I believe in listening to them, and it is evident from my hon. Friend’s speech that she knows what she is talking about.

This is the first debate I am responding to as shadow Minister for early years, but I do not need to have that role to recognise that to give every child the best start in life, nothing is more important than the care they receive in the first few years. High-quality childcare is critical for our economy, as has been mentioned over and over by Members on both sides of the House. The biggest barrier for parents and carers returning to employment is the cost of childcare, and parental employment is vital to lifting families out of poverty.

I grew up in London in the ’80s and I remember the struggles my parents had when it came to providing childcare. We did not have grandparents around—something other hon. Members have mentioned. Before 1997, access to childcare, as well as its quality, varied enormously, and it is not a secret that Labour revolutionised the sector by introducing universal free childcare. Every three and four-year-old became entitled to 15 hours’ free childcare a week for 38 weeks of the year, which was a life-saving opportunity for parents. The measure was a huge success, with more than 90% of children aged three and four benefiting.

Another thing I benefited a lot from—as I am sure parents on both sides of the House have too—were the Sure Start centres, which were also created by a Labour Government and which served every family in the community, regardless of how much money they had. Labour expanded school nurseries and more than doubled the number of childcare places. Most importantly perhaps, we extended maternity leave from 12 weeks to 12 months, increased maternity pay and introduced paternity leave. It is shocking that it took so long, but it happened. We made childcare a key part of our plans to support families and to make work pay, but today’s debate, in 2016, shows that huge challenges remain.

Make no mistake, the petition speaks directly to the failure of the Government’s childcare policy over the past six years. Nevertheless, it is clear that hon. Members on both sides of the House, of different political colours, feel they have shared ambitions for childcare. Even if we believe in different ways of achieving those ambitions, we agree that childcare is a priority that needs to be addressed. The Government’s response to the petition fails to recognise, I am afraid, the effects of chronic underfunding on providers, but it at least acknowledges that childcare costs profoundly affect parents across the country. Labour agrees with the Government that disadvantaged two-year-olds are less likely to access formal early education than their more affluent peers and that they therefore deserve the support that will level the playing field. Further, we do not believe that we should pit those out of work, often because of circumstances beyond their control, against working parents struggling to afford childcare. We believe a distinction needs to be made between work incentive schemes and policies that must be pursued to give equal opportunities in life to impoverished children, and also to children who are disabled—a point made movingly, over and over, by my hon. Friend the Member for Wirral South (Alison McGovern).

The Government should also be frank about the fact that those out of work are not receiving the free childcare to which their two-year-olds are entitled, with only 42% of families in England who qualify receiving it, which compares with the uptake of Flying Start provision for two-years-olds under the Labour Administration in Wales, which stood at 86% in 2015.

[Caroline Dinenage]

I am sorry to interrupt the hon. Lady’s flow, but I would like to correct her, as she has just given out a completely factually inaccurate statistic. Some 70% of eligible two-year-olds are taking up their entitlement to a funded learning place.

[Tulip Siddiq]

I thank the Minister for her contribution, but the source I have, which I believe and which is very credible, says that it is 42% of families, so we will have to figure out who is right. I would just like to point out again that under the Labour Administration in Wales the uptake of Flying Start provision for two-year-olds stood at 86% last year.

Labour believes that the Government have failed to deal with unacceptable local variations in the information that is available to families who could benefit from the childcare offer for two-year-olds. I have seen it myself, when knocking on doors in my constituency, and the Public Accounts Committee has heard that only 30% of parents are even aware of the family information services. That weakens the value of the childcare already on offer, when the socioeconomic gap in educational attainment is large and the benefits that come from high-quality provision for disadvantaged children are clear for everyone to see. Extending the entitlement to 30 hours a week for working families is likely to place further strain on quality and access for the most disadvantaged children, so we need to tread carefully. Labour believes that that is due to the policy criteria, the capacity of the sector and the quality of the provision that can be offered under the current funding rates. Will the Minister outline in her response how her Department will improve the quality and consistency of the information available to parents and also explain how providers can double provision with the funding they currently have?

It is clear that Government measures to help working families have been insufficient and have led to the justified anger seen in the petition. Over the last Parliament, the cost of a part-time nursery place for a child under two increased by 32%. A family paying for that type of care now spends in excess of £1,500 more than they did in 2010, and wages have been largely static, which adds to the pressures on working families. The member of the public whose Facebook post prompted the conversation we are having spoke for many when he said:

“Myself and my wife work full time and pay over £800 per month for childcare…If we had another child, I would have to give up my job, as it’s simply outrageous the amount we have to pay”.

On the Facebook page are other poignant comments by people who are struggling to make ends meet because of childcare costs. That individual’s experiences are also reflected in research by the Resolution Foundation, which shows that more than a third of mothers who want to work are unable to do so because of high childcare costs. That issue was referred to by the hon. Member for Aberdeen North (Kirsty Blackman), and my hon. Friend the Member for Wirral South spoke extensively and eloquently about the problems of the current labour market. She told us the story of Linda from Merseyside. I can safely say to her that there are countless other Lindas, not just in my constituency but across the country, who will be able to relate to that story. Of course, childcare is not only a women’s issue—a point that has been made—but it is no secret that the pressures of childcare fall disproportionately on women, in lots of situations, especially the one that the hon. Member for Aberdeen North mentioned.

I want to come back to the tax-free childcare scheme that the Government speak about. The Government talk about helping those who are just managing, but the cap on working tax credit means that in 11 local authorities the average cost of part-time childcare now exceeds the support on offer. Furthermore, the tax-free childcare scheme, which I am sure the Minister will mention, has been poorly communicated and twice frustrated by Government delays. Research has indicated that the scheme will only deliver for those on high incomes, meaning that it may not support the families who need it most. Labour believes that it is proving to be a wasted opportunity in addressing the root cause of mounting childcare costs, not least for those struggling to make ends meet.

I also want to touch briefly on the funding formula and the lack of places. We believe that the extortionate costs that parents face—different Members have mentioned that over and over again in this debate—are the result of reduced funding being given to providers and the shortage of places available. Under the new early years funding formula, many providers will receive a much lower hourly income for free early education places, which is a disgrace. That reduction is happening when providers are experiencing higher running costs and expanding provision to keep alive the Government’s pledge of 30 hours of free childcare a week. Anyone who listened to the last Education questions will know that I have raised the issue over and over again.

The Family and Childcare Trust reveals that the number of English local authorities reporting a shortage of free early education places for three and four-year-olds has more than doubled. Figures from the House of Commons Library show that the number of places available has fallen by 45,000 since 2009. The figures speak for themselves. The Department for Education recently announced that it was paying £3 million for a private consultancy to find the 45,000 places needed to make the 30 hours’ free entitlement work. That is a choice figure. The costs that providers face, such as business rates and pension auto-enrolments, are fuelling the rapid increases in childcare costs. However, what worries me is that more than one quarter of local authorities will lose money through the funding formula while being asked to manage the costs and to double the childcare entitlement. A 2015 report by the Institute for Public Policy Research explored the possible consequences of such a funding gap. It said:

“Underfunding the 30 hours offer would lead to a smaller, less flexible market as providers…either exit, reduce the breadth of services that they offer, take on fewer children, or refuse to offer the free hours…This would reduce parental choice and potentially push up costs for paid hours or other services outside of the free offer, such as childcare for most under-3s”.

I will draw my remarks to a close, because I want to hear what the Minister has to say. In addition to their punitive funding formula, the Government have as yet refused to commit to supplementary funding for nurseries beyond the two years. Nurseries have been clear, both in the conversations I have had and in writing to all Members of the House, that the cocktail of funding pressures will ultimately push them into an unsustainable financial situation. My hon. Friend the Member for Warrington North eloquently referred to that in her speech. I hope the Minister will put an end to the uncertainty and immediately commit to funding to guarantee the long-term future of nursery schools.

Labour believes that working parents are bearing the burden of the Government demanding unachievable expansion in provision while providing woeful under- funding. It is no secret that the autumn statement is happening this week. We demand that the Chancellor provides parents and teachers across the country with the funding to keep nurseries open, to reduce the costs of funded places and to meet the Government’s 30 hours promise to parents. I hope the Minister will be able to offer even the slightest encouragement that those figures will be in the Chancellor’s autumn statement.

I finish by echoing the words of my hon. Friend the Member for Warrington North, who secured this debate. The early years cannot just be seen as an add-on. They are crucial to social mobility and to children reaching their full potential. Most importantly, they are crucial to the future of our country and the productivity of our economy.

--- Later in debate ---

[Caroline Dinenage]

I did not know that interesting statistic. The hon. Lady is right. Providing better early education can only ever be a really good thing.

Some hon. Members have asked why all two-year-olds do not get a fully funded place. Such places are not offered to all two-year-old children because evidence tells us that the greatest proportion of parents return to work and need childcare when their children turn three. Some parents feel that two years is too young for their children to be in formal childcare and prefer to keep them at home. I was similar to the hon. Member for Aberdeen North and did not stay in the childcare environment for as long as I could have done. That probably gives me an added respect for the amazing individuals who work in that incredible profession.

We wanted to focus resources where they would have the greatest impact for the largest number of families. That is why we prioritised the introduction of an additional 15 hours for the working parents of three and four-year-olds.

The main driver behind the two-year-old programme is to improve outcomes for the children who need the most help in getting the best start in life. For that reason, we do not impose conditions on parents who are eligible for a place, but we hope the programme will support parents from poorer backgrounds to move into employment and training. We have come an incredibly long way since 2013. As I have already mentioned, 70% of eligible two-year-olds now take up their entitlement to a funded learning place.

We also know that 84% of all two-year-olds who take up their entitlement do so in good or outstanding settings, which means that children are receiving their learning in high quality environments. That is fantastic progress and will ensure that thousands of disadvantaged children get the right start in life.

[Tulip Siddiq]

I am sorry the Minister seems a bit rattled by what I have said. I am the Opposition spokesperson and I will hold the Government to account and do my duty in making sure that childcare is properly provided to parents; and I want to hear about the funding. The statistic I cited, which the Minister disputed, was from the Family and Childcare Trust childcare costs survey 2016. In England, the uptake of free early education among two-year-olds stood at 58% in January and at 46% in London. I would like to hear what the Minister has to say.

[Caroline Dinenage]

I am keen to tell the hon. Lady what I think. Because she is very new to her role, I am prepared to cut her some slack. If she chats to her hon. Friend the Member for Wirral South, she will find that she can hold the Government to account in a constructive and positive way, rather than in an endlessly and relentlessly negative way.

[Tulip Siddiq]

Will the Minister give way?

[Caroline Dinenage]

No, I have given way enough. In answer to her question, the figures are the Government’s figures and they are correct.

I want to make progress. We know that it is not only the most disadvantaged parents who need help with childcare costs. That is why we are increasing our investment in childcare from £5 billion to £6 billion a year by 2019-2020. We remain absolutely committed to providing 15 hours a week of early learning to all parents with three and four-year-olds. In addition to this universal entitlement, we will introduce 30 hours a week of childcare from September 2017, which will support more than 400,000 working families with three and four-year-olds, saving them around £5,000 a year in childcare costs. We want to remove the real financial barriers that prevent parents from going back to work or increasing their current hours, so that they can realise their potential and contribute to our economy and their children’s future.

[Caroline Dinenage]

The hon. Lady is right. Flexibility is really important, which is why our recent consultation response committed us to offering free hours between the hours of 6 am and 8 pm to meet the needs of parents who work shifts. We also encourage local authorities and providers to offer the free hours over more than 38 weeks a year so that parents can stretch their hours, whether it is fewer hours over more weeks or during the school holidays. The flexibility that she talked about is really important.

At present, the Government are piloting the programme in eight early implementer areas. The hon. Member for Aberdeen North spoke about the importance of the really good trials going on at the moment. It is the same in the early implementer areas. Through these early implementers, more than 3,500 children have already taken up a 30-hour place one year early, which is giving their parents more disposable income and an opportunity to return to work or work more hours. We expect that figure to increase during the course of early implementation, because more parents will become eligible for the extended entitlement at different points during the year. I want to put on the record my gratitude to Hertfordshire, Newham, Northumberland, Portsmouth, Swindon, Staffordshire, Wigan, York and the childcare providers in those areas who have worked tirelessly to make the programme a reality.

The eight early implementers provide us with an opportunity to address key delivery issues for the 30-hour offer, and for us to test the practical ways that councils and providers can work together. Various Members have spoken about the specific challenges of different areas of the country: for example, the challenges in Aberdeen with the offshore workers. My constituency has a lot of families with partners in the armed forces, particularly in the Royal Navy, who face a similar challenge. That is why we have various early implementer pilots going on to look at all such challenges. For example, Northumberland is focusing on rurality and Staffordshire is focusing on work incentives, as is Swindon, along with flexibility, including the use of Saturday provision via a nursery attached to a hospital to support the staff who work there. Newham is focusing on developing a range of delivery models and supporting children with special educational needs and disabilities. Wigan and Hertfordshire are exploring partnerships through the use of childcare hubs and supporting parents back into work, and Portsmouth is supporting low-income families.

[Ian Paisley in the Chair]

Alongside our early implementers, we have also recruited 24 early innovator local authorities, which will provide valuable learning to support the roll-out of the 30-hour offer by developing approaches to support children with special educational needs and disabilities; developing scalable, flexible models that meet the needs of working parents; ensuring the sufficiency of the local childcare markets; and stimulating parental demand for the new entitlement to act as a work incentive.

I would like to point out that the consultancy that the Opposition spokesperson said £3 million is being spent on is actually not a consultancy; it is a contract to offer practical support to local authorities and childcare providers to help them get ready to deliver the 30 hours. It includes sharing lessons from the early implementers—

[Tulip Siddiq]

It is a consultancy.

[Caroline Dinenage]

It is not a consultancy. It provides courses and shares best practice. It is about being out there, on the ground, speaking one-to-one to administrators and deliverers. The hon. Lady really needs to look up the meaning of the word “consultancy”. It offers practical help on the ground to providers, and helps them to get the very best out of their business models.

The lessons learned from the combined delivery approach of the early implementers and innovators offer a unique opportunity to provide vital information to the local authorities getting ready to meet parental demand when national roll-out takes place. We are capturing learning throughout the year and sharing it with all local authorities to ensure that early implementation is a success—that is what the £3 million contract is about—and that full roll-out has the benefit of the learning that success generates. The more planning and testing we can do in the widest possible number of areas, the more likely we are to have a smooth launch of this key Government priority.

At the same time, the Government will introduce tax-free childcare from early 2017, which is intended to help parents with the cost of living by subsidising the cost of childcare. The tax-free childcare will be paid per child, rather than per parent, and childcare costs will be subsidised for children up to the age of 12, or 17 if they are disabled. The Government calculate that, once it is fully implemented, about 2 million working families across the UK will have access to the new scheme. It will give parents a 20% subsidy on their childcare costs, up to a maximum contribution of £2,000 per child per year, or £4,000 for disabled children. The scheme will effectively subsidise 20% of childcare costs—up to £10,000 per child.

In addition, the Government’s flagship welfare reform programme, universal credit, also offers help with the cost of childcare for parents on lower incomes, even if they work only a few hours a week. Working parents on universal credit can now claim up to 85% of their childcare costs. Together with the 30 hours and tax-free childcare, that amounts to an unprecedented level of support to working parents for their childcare costs.

The hon. Member for Warrington North talks as though the high cost of childcare—we all know it is high, and I have outlined the many things the Government are doing to tackle it—is a recent phenomenon. Many hon. Members who spoke today have the advantage of having youth on their side and of having young children— I am jealous of them—but I was a parent during the previous Labour Government, which the Opposition spokesman spoke about in such glowing terms. I put my children through early years childcare under a Government who presided over the most expensive childcare in Europe. I was working to pay for my childcare. The Government introduced the 15-hours offer, but not everybody offered it, and I had great difficulty accessing it. Childcare is one of the biggest obstacles to women getting back into work, which is why it is important that we have all the schemes I have talked about.