Childcare

Good afternoon, ladies and gentlemen—welcome back. Before we begin, I encourage Members to wear masks when not speaking, if possible, in line with Government guidance and that of the House of Commons Commission. I apologise to Members for the fact that, having given you that advice, I may not be able to adhere to it myself because my glasses steam up and I might not be able to see anybody. Please give each other and members of staff space when seated and when entering and leaving the room.

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I beg to move,

That this House has considered e-petition 586700, relating to funding and affordability of childcare.

The petition is about the need for an independent review of childcare funding so that we can really think through what we want our childcare and early education sector to be, and what we hope it can do for the families who need it and for us as a society. So many economic and social benefits flow from the sector that it is difficult to summarise in the time we have, but I think most of us would agree on three key reasons why it is so important to support high quality early education.

First, we know from international evidence that so many important life outcomes—from health to wealth and wellbeing—have their origins in the early years. Quality early education can benefit children’s academic and social development, and evidence shows that those benefits are often stronger for children from disadvantaged families, as it starts them off on a more equal footing with their peers when they go to school.

Secondly, access to childcare is crucial for working parents. Closures during the pandemic have served as a real reminder of just how important it is. The pre-school years are a particularly significant time for new mothers: regrettably, decisions around their childcare in that short period can have a huge impact on their lifetime earnings and, consequently, on the gender pay gap.

Finally, helping with the cost of childcare and early education is one of the best ways for the Government to ensure that families with young children—particularly those on low incomes—are not financially crippled by high costs. As the petitioners point out, childcare in the UK is expensive. Statistics from the OECD show that, however we look at it, we are close to the top of the list of developed countries for childcare costs.

I am just working out who is here behind their masks. I am afraid that I have to impose a five-minute limit from the very beginning, if we are to get everybody in. I call Theresa Villiers.

It is an honour to serve under your chairmanship, Sir Roger, and I congratulate the Petitions Committee and its Chair on securing today’s debate. I thank everyone who signed the petition.

Investing in early years provision and education is one of the best ways to secure a successful economy and tackle the root cause of many social problems. A stable and supportive environment during the first few years of life has a crucial impact on people’s life chances, so good quality early years education can be an engine of social mobility. I pay the warmest of tributes to people working in early years in my constituency, in settings such as Bright Little Stars Nursery on Leicester Road, Alonim Kindergarten at the North London Reform Synagogue, and the three maintained nursery schools run by the Barnet Early Years Alliance.

As we have heard, the pandemic has highlighted that childcare and nursery providers form a crucial part of our infrastructure. Without these dedicated individuals, our public services and our economy would grind to a halt, because essential workers would be at home minding the kids. I welcome the around £3.6 billion a year that the Government are devoting to childcare and early years, and I believe that that does not include the further support that many parents receive through the universal credit system.

The petitioners, however, have a valid point. At a recent street surgery, a constituent told me that almost the whole of his wife’s salary as a teacher was being spent on childcare. I, too, would welcome the review that the petition asks for, and appeal for a simpler system of Government support that helps parents, family budgets and providers right across the PVI—private, voluntary and independent—and maintained nursery sectors.

The most urgent financial issue that needs to be resolved is funding for maintained nursery schools, such as those run by BEYA in my constituency. They have excellent results, particularly with children from disadvantaged backgrounds and those with special educational needs or disabilities. As I have highlighted many times in Parliament, and recently in a meeting with the Chancellor of the Exchequer, time is running out for those great schools. They lost out when the funding formula was changed in 2017, and ever since much of the sector has been just about kept afloat by £60 million in supplementary funding. If those schools are to continue their vital work, they need a stable, long-term financial settlement, which they were promised in 2016-17. That would see them take on a new role as system leaders and centres of excellence for the local area. Most urgently of all, maintained nursery schools in Barnet need a share of the supplementary funding, which they have been denied up to now. Without it, their future looks bleak and uncertain.

It is an absolute pleasure to serve under your chairmanship, Sir Roger, and to have this debate. I am grateful that you gave me an opportunity to put my jacket on because, like any parent of an under-two-year-old, I have snot and Weetabix on the back of my clothes. I have accepted that having two children means that I will be permanently sticky for the next 18 years. Because I have two children under the age of two in London, I also accept that I will probably never be able to go out because the cost of childcare is so prohibitive.

We have one of the most expensive systems in the world, but high cost does not necessarily mean high impact. The TUC found that, for parents with a one-year-old child, the cost of their child’s nursery provision has grown four times faster than their wages, and more than seven times faster in London. In communities such as mine, which has the 10th-highest level of child poverty, families are already choosing between eating and keeping a roof above their heads. Affordable childcare, like affordable housing, is an illusion. I thank Pregnant Then Screwed, the Early Years Alliance, the Women’s Budget Group, the Fawcett Society, the National Day Nurseries Association and the all-party parliamentary group on childcare and early education for their refusal to let this be the new normal. Childcare is something that everybody needed during the pandemic and nobody got.

As my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) pointed out, during the pandemic the Government found time to make the case for infrastructure investment. They found £27 billion for roads and for 50 million potholes, money for new railways and stations, and even £5 billion for broadband. What did our children get? Well, the Chancellor did say that mums everywhere were owed a debt of thanks for juggling childcare and work. That pat on the back shone a light on how this Government think about working parents. This is an infrastructure issue, and as a result of failing to see it that way, we are losing tax revenue, losing women from our workforce and hampering equality in our society.

I congratulate the hon. Member for Walthamstow (Stella Creasy), who is a friend, on the new arrival. The importance of this issue in the eyes of our constituents, mine included, is reflected in the fact that almost 113,000 people signed this e-petition, which—as has already been set out—calls for

“an independent review of childcare funding and affordability”.

The public, I think, feel we could do more to create a sustainable future for the early years sector, which I represent here today as chair of the all-party parliamentary group on childcare and early education, which has been mentioned. We in that group have spoken for some time about what I would describe as a market failure in this sector, and the need for a meaningful review of it, so it is good that we are having this debate.

Prior to the summer, I had the pleasure of speaking in another debate on this issue, in Westminster Hall in its other incarnation—these debates come around often—and in the months since, things have moved on. The Chancellor has now announced his comprehensive spending review alongside his Budget on 27 October, and it was very useful to speak to him last week—I was in that meeting too, along with my right hon. Friend the Member for Chipping Barnet (Theresa Villiers)—about many of the issues we are debating this afternoon. I must stress from the outset, as I did to the Chancellor, that this is not all about money. For me, it is about getting back to brass tacks to make our early years funding system work for the children of this country, and for the families who rely on it and the economy that relies on those families. It is about ensuring that our hard-working early years educators—I declare my interest: I am married to one—are rewarded. Most importantly, it is about putting our early years sector on a sustainable footing so that this debate will not keep coming around again and again.

I am here as chair of the all-party parliamentary group, but I am also a Government MP, and I am very proud of the landmark commitment that we as a party made through the 30-hours entitlement. However, I have to say that through my work chairing the group, it has become clear to me that systemic reforms are needed to make this flagship policy work better. Data from the National Day Nurseries Association, which is one of the sponsors of our group, show that in 2019-20, three quarters of councils underspent their early years funding by £62 million. Meanwhile, there is a funding shortfall of almost £3,000 per child per year for every 30-hours place. My hope is that Government will agree to use the forthcoming spending review to fund an early years catch-up premium and address this shortfall, including facing down the local authorities on that underspend. Merely by overhauling the system and tackling the existing underspend, we could properly fund many of those 30-hours places for children right across the country.

The hon. Gentleman makes a powerful case, as have others. Does he agree that grandparents often have to step into the breach and provide the necessary childcare? While that is very welcome and they do it willingly, it results in an uneven pattern of child development.

The right hon. Gentleman’s point goes to the heart of the issue. I talked about early years educators; these are not well-meaning amateurs at the end of their career who are just providing plasticine. They are educators and they are preparing children for the world of learning when they go into their primary and secondary education. It is a very good point and it is well made.

Nursery settings have remained open and ready to receive children to help their families get back to work. At the same time, their staffing costs have risen on average by 8.6% through the new national living wage and pension contributions. With the reintroduction of business rates looming, the average nursery will face a bill of about £12,500 for those alone. Surely it would be better to see this money going into the pockets of our early years educators and directly invested in the future of children across the UK. That would be a fitting way to recognise the unsung contribution of early years educators over the last year and to help develop our country’s most valuable asset—the next generation.

Early years staff have worked incredibly hard during the pandemic, sometimes putting their own health at risk to ensure our children are cared for. I thank each and every one of them. However, one of our early years providers in Bath said, “I feel the Government do not value us and do not see our professionalism and dedication to our role.” Too many childcare workers have felt this way throughout the Government’s response to the pandemic. Guidance to them has been ambiguous, and provision of PPE and testing has come far too slow. Recovery funding has focused primarily on school-aged learners.

I secured a debate on early years funding before the summer recess. My message to the Minister is the same now as it was some weeks ago—acknowledge the value of the early years sector and pay what it costs to deliver it. Funding has been a widespread concern long before the pandemic. Research from YMCA suggests that up to 80% of settings cannot deliver childcare at the funding rate provided by their local authority. I take the point that there is underspending in some local authorities, and we need to get to the bottom of that, but the overall funding gap is still too big. Most providers realistically need more than £6 an hour per child just to break even, let alone reinvest in their business. However, the funding rates do not reflect this. In Bath and North East Somerset, our local council receives £5.59 an hour for two-year-olds, and just £4.48 an hour for children aged three and above. It means providers have to choose between operating at a loss and subsidising the cost of delivery through fee-paying families.

Of the expenses, 70% are staffing costs. If funding continues to increase at a much slower rate than the national living wage, it will become more and more difficult to pay staff properly. In a country where parents pay the second-highest childcare costs in the world, one in 10 childcare workers are officially living in poverty. Affordable childcare is essential to our economic recovery from covid-19, but with childcare costs adding up to about 30% of the average wage, many parents—usually women—will be forced to make difficult decisions about remaining in or returning to work. Should one of the legacies of covid-19 be the roll-back of decades of progress on equality for women in the workplace?

I thank the Petitions Committee and everyone who signed the petition to secure this debate today.

The childcare juggle is real. Parental life should come with a military gold command schedule-planner. Instead, it is made up of grandparents—if people are lucky enough to have them about—after-school clubs, childminders, understanding bosses, nurseries and friends doing favours for each other.

This morning, I dictated a weekly article for my local newspaper down the phone to my team, while trying to put my wriggling daughter’s leggings on, in between trying to put my face on, answering messages and making sure that she was fed before I handed her over in order to come here. On top of all that, the cost of childcare is truly painful for many people.

I will make five key points before I move on. No. 1 is that we cannot afford to have the vital talent of the parents of young children being kept out of the workforce; the country and the economy will not thrive without them.

No.2 is that if anyone has ever seen what a working mum fits into an hour of “free” time before legging it back to the school or nursery gates, they will know that mums could singlehandedly fix the economy’s problem with productivity if they were freed up to do so.

No. 3 is that child carers, nursery teams, nannies and early years teachers are all skilled angels who need more career recognition and pathways to higher salaries. This profession deserves respect and everybody found that out when they tried to home-school children over the past year.

No. 4 is that the wellbeing of a child will always come first for parents. We must work harder to ensure that childcare providers improve our system, so that the choice for parents is not one between having a career and having a child.

It is a pleasure to speak in this debate, Sir Roger, on a topic very close to my heart. I thank the Petitions Committee and all the petitioners for securing the debate. I want to start by paying tribute to all the early years educators in my constituency: the nurseries, pre-schools and childminders all worked tirelessly during the pandemic to look after some of the youngest in society.

Early years are critical for a child’s development and for determining their life chances, but the childcare sector faces pressures because of Government neglect over the last decade. Chronic underfunding has left nurseries and childminders facing a growing financial crisis. In this year alone, 2,500 providers have closed, and many talented staff have left the profession. Since 2015, 12,000 early education and childcare providers have been lost, with 30,000 more at risk of closure in the next year.

Millions of parents, particularly mothers, rely on childcare in order to work, and analysis by Pregnant Then Screwed shows that 345,000 women will be at risk of losing their jobs if further childcare providers are lost. Despite that, the Government have said that they are not planning a review of the childcare system or early years funding, but it is clear that urgent steps need to be taken to prevent further childcare closures and to rebuild that essential infrastructure. With the greatest respect to the hon. Member for Stroud (Siobhan Baillie), I imagine that the experiences of childcare and affordability are very different for the Prime Minister than for the vast majority of my constituents.

The funding model has a huge number of issues. Prior to the pandemic, 11% of childcare providers were running at a significant loss, with the industry as a whole suffering an estimated £662 million shortfall in funding. Meanwhile, public spending on childcare has fallen as a share of GDP since 2010, and remains considerably below the OECD average.