[Relevant documents: Fourth report of the Work and Pensions Committee, Universal Credit and childcare costs, HC 127; first report of the Petitions Committee of Session 2021–22, Impact of Covid-19 on new parents: one year on, HC 479, and the Government response, HC 1132; first report of the Petitions Committee of Session 2019–21, The impact of Covid-19 on maternity and parental leave, HC 526, and the Government response, HC 770; oral evidence taken before the Education Committee on 31 January and 21 February 2023, on Support for Childcare and the Early Years, HC 969; correspondence from the Work and Pensions Committee to the Secretary of State for Work and Pensions, on Universal Credit and childcare costs Report, reported to the House on 22 February 2023; e-petition 624461, Fund 30 hours free childcare from age 1 for families where both parents work; e-petition 586700, Commission an independent review of childcare funding and affordability; e-petition 615623, Do not reduce staff-child ratios in early years childcare; e-petition 628412, Increase funding for early years settings; e-petition 580137, Offer 15hrs free childcare for multiples under 3 years.]
Motion made, and Question proposed,
That, for the year ending with 31 March 2023, for expenditure by the Department for Education:
(1) further resources, not exceeding £3,096,686,000, be authorised for use for current purposes as set out in HC 1133,
(2) the resources authorised for capital purposes be reduced by £1,580,042,000 as so set out, and
(3) a further sum, not exceeding £145,625,000, be granted to His Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Claire Coutinho.)
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.”
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?
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.
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?
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.”
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.
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.
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.
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.
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.
My hon. Friend has been a great champion for parental choice; I know that she has worked with Onward and others to make the case for it. That is a really important part of the argument, and I look forward to engaging with it as the Education Committee inquiry progresses.
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.
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.
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.
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.
Happy International Women’s Day, Madam Deputy Speaker. It is great to see you back in the Chair.
Last week I visited Georgie Porgies Pre-School in Holbrooks, in my constituency. It provides outstanding care and early years education for more than 60 children at the most important stage of their lives, but because of the Government’s failures, it will soon have to close its doors for good unless something is done. With a gas and electricity bill totalling £1,000—an increase of 100% on last year’s—George Porgies, along with pre-schools and nurseries across the country, is coming to the awful realisation that it will not be able to fulfil its mission: to give children the best possible start in life.
Katie, the owner of Georgie Porgies, pays herself a salary that is below the minimum wage simply to keep her business afloat—a business that provides employment for nine people and vital education for tens of children—but despite this selfless sacrifice, she and her business face financial ruin. To put it simply, the Government are levying a tax on generosity and kindness. Katie faces financial hardship because she cares and is passionate about what she does. She loves her community, and wants to give children the best possible chance in life. If she took the very reasonable decision to step away and find another job, she would no doubt find herself in a much more secure position, but she and thousands like her are not driven by money. They want to make a difference, and because of that, the Government continue to punish people like her.
Let me make it clear to Conservative Members that Katie does not need any business advice on how to make her money stretch or improve efficiencies. What she and everyone in the sector need more than anything is deep-rooted, fundamental change to a broken system. That is the only thing that will keep childcare businesses in every corner of the UK afloat. Childcare costs in the UK are the third most expensive in the world, after those in New Zealand and Switzerland, and still the Government are doing nothing about it. We need to move away from the current model and rethink the system.
The Government talk about wanting growth, but while the cost of childcare continues to be a serious financial burden both for families and for those who provide it, the social infrastructure that allows us to contribute economically is rapidly coming apart at the seams. I speak to many families on the doorstep every week, and the No. 1 issue that comes up—apart from the cost of living crisis—is childcare. Thousands of women in my constituency are facing the impossible choice between staying at home to look after their children and going back to work, which means that many of them are sacrificing hard-won careers.
Let me end by asking the Minister to listen to Katie’s words of desperation:
“Help me keep a business I absolutely love. Help me keep nine people in employment. Help me keep over 60 children in a nursery that is full of love, care, and happiness.”
I do hope that the Minister will have an adequate response for Katie.
May I say what a huge pleasure it is to see you back in the Chair, Madam Deputy Speaker—and what better day to be discussing this topic than International Women’s Day? I wish all the women—and men—in the Chamber a happy International Women’s Day. Is it not wonderful that there are so many of us now? It is indeed wonderful to see so many women in politics, making a contribution and debating these issues. On behalf of all of us, I want to encourage every young woman, of whatever party, who has political interests and ambitions to get stuck in. We will help you. Come and join us; you will be most welcome.
Let me begin by paying tribute to my hon. Friend the Minister, who has been such an advocate for what, as I think everyone in the House knows, I am so passionate about: giving every baby the best start in life. The lovely thing about that is that I am, so far, not alone. Every Member I talk to, in every party, is incredibly supportive, because we all know from bitter experience of constituency cases, from what we have read, and from what we have learned as politicians and in our own lives, how critical it is for every single baby to have a chance of the best start in life.
Let me give the House some statistics. We know from a study conducted by the Early Intervention Foundation in 2016 that the cost to our economy of late intervention is about £17 billion a year. Almost a third of that is the cost of looked-after children. The children who have some of the worst outcomes in the country are those who are removed from their families and taken into care, and it is shocking that so much money is spent on achieving such poor outcomes. Huge parts of that £17 billion are spent on dealing with domestic violence, and young people who are not in employment, training or education and whose life chances have been hampered by their not being given the best start.
My hon. Friend the Member for Worcester (Mr Walker) has already mentioned the work of Professor James Heckman in analysing the rates of return on human capital investment. It says very clearly, “If you do not care about human happiness, just look at the money—follow the money!” A pound, or a dollar in the professor’s case, invested during the antenatal period will pay exponentially more, in terms of the return, to the human potential of the child—and will lower the later cost to society—than a pound, or a dollar, spent further down the line, when that child is already in the realms of youth crime or perhaps mental illness. Financially, prevention is not much kinder but so much cheaper than cure. Across our United Kingdom, and indeed across the world, there is a growing wealth of evidence for that.
I pay tribute to the Princess of Wales for her amazing work through the Royal Foundation Centre for Early Childhood, observing the struggles of parents and the number of parents who do not feel confident about knowing what their baby needs. I have talked to consultant paediatricians as part of my work as the Government’s early years healthy development adviser, and one of them said to me, “I am supposedly an expert in this field, but when my wife and I had our baby, we were like, ‘Aargh! What do we do with this?’” That is the challenge. It is not about the nanny state, or about interfering; this can happen to any us. I had three babies, and by the third time I thought I had it sussed, but my 19-year-old still gives me hell!
When you first have a child, you do think, “What am I supposed to do with this?” You take that beautiful, squeaky new baby home, and once you have got over the stitches and the other horrific unspeakable things that befall women in these circumstances, you find yourself trying to focus on the fact that you have had no sleep, which is an effective torture, is it not, Madam Deputy Speaker? We all know what it is like if we have had no sleep, and your baby, like my first, does not sleep for more than two hours at a time. In the one antenatal class that I just vaguely recalled, I was asked, “What is your 24-hour clock like now?” We all said things like, “Between 11 pm and about 7 am, I am fast asleep.” Then we were asked, “What do you think it will be like once you have had the baby?” We all said, “Well, I don’t really know, actually.”
It is so difficult, having a baby. You can be as rich as Croesus, you can be happily married, you can have all the support and the nannies in the world, you can have maternity nurses, and it is still difficult. Actually, I pay tribute to the Netherlands, where 95% of babies are born at home and you get a free maternity nurse, on the state. I would do that trade any day of the week—hands up those who would not! To have someone who will take the baby off you so that you can get a few hours’ sleep—that is extraordinary. However, I hope I am not freaking out anyone who is thinking of having a baby: it is the most glorious thing we ever do, and I welcome the fact that so many of our colleagues in the House have young children. I was proud as Leader of the Commons to introduce proxy voting for baby leave, because, oh my goodness, we cannot just sit at home and watch everyone voting and hope that our slip is going to be adhered to. We need to continue our lives.
So, for many women, and men, this is the most difficult thing they ever do, but what is so appalling is that we are really not allowed to say that. When I had my first child I was working at Barclays and I had just been appointed senior executive—one of only eight women; it was an absolute badge of honour—and they said, “We will do this appointment if you will come back after 10 weeks.” I know that seems extraordinary. They could not legally do that now, but in those days they could. And I said yes, which was really stupid. In hindsight, why on earth did I say yes? Anyway, there ensued two miscarriages, postnatal depression and awful trauma, and I left. It was not a happy experience. I say that because we are never allowed to say when things are difficult and we are really struggling, but we really want to keep our career. We do want to have it all, and that is understandable, but at the moment we really cannot.
We absolutely have to focus on the incredible investment in the early years. Again, I pay tribute to the Under-Secretary of State for Education, my hon. Friend the Member for East Surrey (Claire Coutinho); to the Prime Minister who, as Chancellor, funded this incredible project; and to the Chancellor, who as a Back Bencher and Chair of the Health and Social Care Committee was absolutely supportive of the best start for life. I also pay tribute to Opposition colleagues. One of my earliest friends in this place was the wonderful Lord Frank Field—if I may use his name since he is no longer an MP—and the even more wonderful, if that is possible, Dame Tessa Jowell, both of whom have been such advocates for giving every baby the best start in life.
What the Government are seeking to do is to provide support. My hon. Friend the Member for North Dorset (Simon Hoare), who is no longer in his place, talked about the importance of early years settings to build families’ capacity to be parents. In those settings, parents can chat to others and ask, “What size nappies are you using? Have you weaned yet? What are you feeding your baby?” We do not get a manual, do we? We should, but we do not. Another thing we do not get, which we should, is an on/off button. Don’t you agree, Madam Deputy Speaker? I am sure Matthew would agree. When Madam Deputy Speaker’s son used to sit in his sitting room opposite mine and play my music in my flat from his Bluetooth, I wanted an on/off button then. He was a bit older.
That is one of the challenges that we have as parents: there is no manual. So how do we get that information? We have the Government’s programme of rolling out family hubs across England. I wish we could roll them out across the UK, and we will be working with our colleagues in the devolved Administrations to make that the case. In Scotland, they have got parenting mental health absolutely sorted but they do not have family hubs. Talking to some colleagues who are Scottish parliamentarians, I know that they would be keen to follow what we are doing here. I think we can learn from each other all around the world. In Chile they have the most wonderful support for new mums that we do not currently have here, but we are starting to roll out the family hubs across England.
Most importantly, we are rolling out the best start for life, which involves six universal services. People who go to a family hub will be able to get antenatal midwifery checks, to chat to a health visitor, to seek support for their mental health issues or those of their partner or any member of their family, or for their relationship with their baby. They will also be able to get breastfeeding support. This is another ridiculous thing: we are all expected to know how to do that, aren’t we? How on earth do you breastfeed a baby? Who knows? Hands up, any of the men? No. We do not get a manual for that either, and actually women need a lot of support. You would not give your five-year-old a two-wheel bicycle and say, “Right, off you go, darling.” You hold the back of the seat until they have got the hang of pedalling. Our breastfeeding rates are among the worst in western Europe and that is because no one gets any help—
I have never name-checked them in this House, but Auntie Jane and Auntie Jenni ran the BABIES breastfeeding support group at Lanterns nursery, which still exists in Winchester, and I remember going to them one morning after we had had a dreadful night with our first, Emily—who is 15 now and still a challenge—and we were just desperate. The only thing that got us through to daylight was knowing that we were seeing Auntie Jane and Auntie Jenni in the morning. I remember taking my wife and Emily down to see them, and they provided amazing support, as do support groups all over this country. So, Auntie Jane and Auntie Jenni, thank you.
That is lovely, and I pay tribute to the thousands of volunteers who provide breastfeeding support. My hon. Friend highlights perfectly one of the great challenges of becoming a new parent. When we are really struggling, there is a high correlation with mental health issues. When there is not enough support for women who want to breastfeed their babies but find they cannot do so, they suffer from feelings of guilt and feeling that they have failed and they are not good enough, and that lends itself to the problems of postnatal depression that are only too prevalent right across England.
So, to recap: midwifery, health visiting, mental health support, breastfeeding support, safeguarding support and disability support will be universally available in family hubs to help every family to give their baby the best start in life. Not only that, there will be universal-plus support for the most tricky and challenging issues such as the prospect of domestic violence. We know that up to 30% of domestic violence starts in pregnancy because of the partner’s feeling, “This person is going to love the baby more than they love me.” All these challenges that are brought out by pregnancy are quite desperate to be solved. We know that if we can get the hang of giving every baby the best start for life, that will transform our society.
I mentioned that the cost to our economy of late intervention is about £17 billion a year. The Maternal Mental Health Alliance’s study has shown a cost of around £8 billion a year for every new cohort of births as a direct result of the cost of poor maternal mental health in the perinatal period. The all-party parliamentary group on conception to age two—the 1,001 critical days—has demonstrated that school readiness results in a reduction in later problems such as the propensity of children to get into gangs, to have poor mental health and to fail to learn and do well at school. The 1970 cohort study showed, significantly later on, that only 18% of children in the bottom 25% academically at age five get one or more A-levels, compared with 60% of those in the top 25% at age five. What happens to a child in their earliest years follows them throughout their life, and the more we can do in that earliest period, the better, so the Government are totally on the right lines.
I applaud my right hon. Friend’s work on the early years and, as she knows, I share her enthusiasm. We are talking today about the estimates for the Department for Education. What role does she think public health has to play in educating parents, particularly about our shared passion for attachment theory? We have been successful over the last few decades in educating parents about not smoking or drinking during pregnancy, about not smoking in the car with their children and about how to give them nutritious food. Much of that has been a huge success, but we have never really had a public health campaign based on the fundamental building block of emotional maturity in children, which comes from strong early attachments. When I was in the DFE, we were considering the idea of a big public health campaign to illustrate the importance of attachment, not just to women but to men as well. An attachment to a father is just as important as an attachment to a mother.
My right hon. Friend is absolutely spot on.
That gives me the chance to mention the London School of Economics report in 2019, which illustrates the cost of insecure attachment. The cost is 50% higher if an infant is not securely attached to their mum than it is for a securely attached child, at around £4,000. If that baby is not securely attached to their dad, the cost can be four times higher than that, which obviously illustrates the importance of dads. My right hon. Friend is absolutely right to raise not only the importance of secure attachment but, very specifically, the importance of dads. The provision of holistic support on fathering is crucial.
My best start for life project is commissioning different bits of training, nationally and free to all early years practitioners, including on reflective parenting, so that everyone working with families, whether as a volunteer or as a professional, understands how reflective parenting can contribute to secure attachment. There is also video interaction guidance that demonstrates to families the good and the not so good, in a way that has been clearly evaluated. A lot of work is being done in the best start for life project to skill up everyone who is volunteering or working in the early years sector and to roll out support for families.
If a family are expecting a baby, they go to their family hub. If they want a book, they go to the library. If they want a bottle of milk, they go to the supermarket. We want family hubs to be a household name where people go if they have a child, and particularly if they have a baby. They should go whether they are rich or not so rich, whether they are young or old, and whether they have other caring responsibilities or not. We know that learning from each other in a supportive environment can be transformative.
I finish on childcare because, although my role as early years healthy development adviser is about nurturing support in the early years, most babies find themselves in a childcare setting when they are still very young—six months to a year old. The 1,001 critical days, the period from conception to the age of two, are a continuum, and it is when the vast majority of the lifelong blocks for emotional and physical health are laid.
Babies may spend a lot of that time in a nursery setting, and it seems to me that there are two issues. The first is quality, and it must be about parental choice. We need good-quality nurseries, but we also need choice for parents. If they want their mum to look after their baby, and if their mum is able, we should be willing to say, “Thank you very much, granny. You will get some sort of payment.” The payment should not be as if they are a trained nanny or nursery worker, but there should be some form of carer’s allowance or attendance allowance for grandparents who go part time to care for their grandchildren.
Secondly, we have already heard that childminding has fallen off a cliff because the regulatory burden, which predates this Conservative Government, has been so great that it has taken a lot of people out of childminding. If I had a six-month-old, I would much rather they were in a home environment than a nursery environment or baby setting.
We need to go with the grain of what works for families, so we need to have choices, with quality nurseries, many more childminders and support for relatives, just as we have for people who look after their elderly husband or wife who has disabilities. People who go part time to look after their granddaughter, grandson, niece or nephew get nothing. It is a straight choice, and it has a significant financial cost. I urge the Minister to consider that.
The final thing is flexibility for parents. Families know best what works for them, and people tend not to have just one child. Child No. 1 can be very difficult, but when a family is faced with paying 50 quid a day for a tip-top nursery because they want to go back to work nine-to-five—they also need to get to work and get back to pick up their child—the nursery costs are huge. For an awful lot of women, having a second child means it simply is not worth going back to work.
We should allow parents to have their own childcare budget that they decide how to use. I wanted my first child to come out of childcare when my second child was born because I wanted them to be together. If a mother is home on maternity leave, why not have the two children together? It should be a choice for families, but if the first child is three years old, families do not want to lose their free hours of childcare, even if it would suit them to have both children at home. I urge the Government to consider giving parents that choice. Childcare is difficult enough without there being hurdles that make it unaffordable and inflexible for far too many families.
I am delighted with the Government’s work on rolling out the family hubs and best start for life, but childcare is part of it and we need to give families more choice.
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—
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.
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.
It is an honour to be able to address this Chamber on International Women’s Day. It is a great opportunity for all of us to reflect on the successes of the past 100 years in removing barriers that women have faced, addressing inequality and removing discrimination. But it is also a time to reflect on what more needs to be done and so it is a logical day on which to be discussing childcare provision. International Women’s Day is always an opportunity to reflect on the plight of women in many countries around the world who do not enjoy the fair treatment and equality that we have secured in this country and across much of the west. In particular, we should keep in mind the women in Iran and Afghanistan, as in both countries women are treated as second-class citizens and subject to brutality and human rights abuses.
The subject of today’s debate is undoubtedly relevant to International Women’s Day because, whether we like it or not, women still bear more of the responsibility for childcare than men. It is traditional to start a speech by declaring an interest; I should start by declaring that I do not have a personal interest in this issue, because I am not a mother and do not have childcare responsibilities. However, I agree with every word that has been said today about the importance of getting this right. It is important for our economy, for tackling social problems, and for so many other reasons.
Like everyone else, I would make the case that investment in childcare and early years education is an incredibly good way to tackle issues such as educational underachievement, worklessness, family breakdown, crime, antisocial behaviour, drug abuse, substance abuse and mental health problems. So much of our constituency casework can be traced back to difficulties in the early years.
As my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) and my hon. Friend the Member for Worcester (Mr Walker) have so articulately highlighted, the first months and years of a child’s life can really set their destiny. I think we all have an obligation to ensure that, as a society, we are doing everything that we can to make those first months and years the right environment for children, with the appropriate emotional support and education.
I pay tribute to all childcare providers and early years educators; they are doing a phenomenal job. I completely agree with the hon. Member for Twickenham (Munira Wilson) that the covid pandemic really demonstrated what a crucial role they play in our infrastructure. If there is no childcare, then nothing works, so it is important that we highlight how crucial childcare and early years are to keeping this country going.
I very much agree with the Prime Minister in his analysis of education as
“the closest thing we have to a silver bullet”.
Well, I think early years education is the most extreme example of that, because, if we give people the right early years environment and the best early years teaching and support, we can make that an engine of social mobility and give them a chance to succeed, and to realise their dreams and opportunities and make successes of their lives.
I want to put on record my thanks to the Prime Minister for resolving a huge concern around maintained nursery schools. If you do not have one in your constituency, Mr Deputy Speaker, you probably will not know about this, but when the funding formula changed a few years ago, maintained nursery schools lost out, and many were essentially threatened with closure.
The Ministers at the time came forward with some limited supplementary funding, but, for some reason, not all nursery schools got that. The ones in my constituency did not get any supplementary funding, and, for the past five or six years, have really struggled to keep going. That is despite those schools providing a phenomenally good early years offer—really, a brilliant education, particularly for children with special educational needs and disabilities.
After a long campaign and many conversations with the Prime Minister in his former role as Chancellor, the Department for Education and the Treasury found an extra £10 million, added that to the £52 million of supplementary funding and reallocated it. The Barnet Early Years Alliance, the maintained nursery school in my constituency, got that funding for the first time, so did not have to close its doors. I am tremendously grateful for the half a million of funding that it is now receiving so that it can continue its inspirational work. I would also highlight the contribution to that successful campaign by the late, great Jack Dromey, who cared about it passionately.
That is a brilliant success story, and, as others have said—for example, my hon. Friend the Member for Worcester—there is much to be proud of in the Government’s record on early years education, and there has been a significant increase in funding, but there are still some serious problems to be addressed.
We have heard that the current entitlements are greater than they ever have been, with the 15 hours for disadvantaged two-year-olds, the extended 30-hour offer for working parents, tax-free childcare, and, of course, help via the universal credit covering 85% of childcare costs in relevant cases, but there is no doubt that the cost of childcare in this country is high compared with many other places. That must be keeping women out of the workplace. It is certainly shortening the hours that they feel willing to do. For that reason, it is almost undoubtedly contributing to skills shortages in the national health service.
I also share the concerns expressed about the complexity of the entitlements and the fact that many people simply do not understand how they work and, as a result, may not end up claiming them. Of course, it is also a worry that many childcare and early years settings struggle to provide the entitlements with the funding they receive. I also want to emphasise the importance of investing in our early years educators to ensure that we have the workforce with the skills needed to do this crucial job to the best of their abilities and in a high-quality way.
The OECD has concluded that UK parents face high childcare costs compared with other countries. The IFS has reached the same conclusion. The CBI, in its Budget submission, highlights that the cost of childcare is worsening the cost of living situation and “dampening economic outlook”. As we have heard, a survey for Mumsnet and Pregnant Then Screwed found that many parents of young children are spending as much, or more, on childcare than on their rent or mortgage.
I feel strongly that addressing the affordability of childcare would have a positive effect on the labour market shortages that we face, and it would help us to address our problem with low productivity. I hope that the Chancellor has been listening to this afternoon’s excellent debate. When he kindly met MPs to discuss his forthcoming Budget, almost all of us in the group I took part in raised this issue of childcare affordability. We need to do more on this, and I hope that we will see that reflected in the Budget.
Of course, we also need to ensure that we have the necessary childcare providers, and I understand the concerns about the closure of some settings. Government figures indicate that the number of places has remained broadly constant since 2015, but we must ensure that settings are properly funded to deliver the entitlements that they asked to provide. We need to look at ratios and consider whether more regulatory flexibility can help with the affordability conundrum.
Lastly, in this debate we must not forget out-of-hours care and activities. Wraparound care to help working parents is crucial. It is part of the childcare and education support that we need to provide as a country. It does not necessarily get the same amount of attention, but for many parents it is crucial to enabling them to work and earn the money they need to support their families.
Thank you, Mr Deputy Speaker, for calling me to speak in what has been an excellent debate. We are as one across the Chamber in emphasising how important it is that we grow our economy so that we have more to invest in our childcare and early years education systems.
It is an honour to be speaking in this debate on International Women’s Day. I cannot think of a place I would rather be, and I cannot think of an issue I would rather be speaking on. I thank the hon. Member for Worcester (Mr Walker) for calling for this debate and for his earlier speech. Like other Members, I agreed with much of it. I am glad that the Education Committee is holding an inquiry into early years, and I look forward to the results.
As a mother of four, I know at first hand the stress and anxiety that children’s early years cause parents—as well as all the joy that comes with those years. That stress is mostly caused by the cost of childcare. As has been mentioned by many Members in this debate, flexibility of options for childcare and early years education is vital. During the years of caring for young children, I was helped in being able to go to work, or to stay at home, by childminders, my sister-in-law, state-maintained nurseries, an au pair at different times, staying at home sometimes, going part-time, being a member of a job share at other times and then being full-time. There were different options that I needed throughout that time. On this International Women’s Day, I wish to thank the early years educators, the childminders, those who work in our children’s centres and family hubs, the au pairs, the nannies, the grandparents, the relatives and the mothers who enable us to live our best lives.
The reality is that soaring childcare costs are compounding the cost of living crisis, which is putting increased pressure on families and pricing others out of parenting—literally stopping many couples from becoming parents. This affects women the most. Women are paying the price of the failure of our current system in reduced earnings, in cutting back on careers, and, in the long term, in their pensions.
Last Saturday, when I was out knocking on doors in my constituency, I met a man who said to me, “I am glad you are here,”—that is always a very reassuring thing to hear. “I have just heard that I am about to become a dad,” he said. “Congratulations,” I replied. “That is fantastic news.” But he went on to say, “Unfortunately, that means that I will have to move out of Putney.” That really broke my heart. He was so concerned about childcare costs which, combined with the very high house prices and housing costs in south-west London, would force him to move out of our community. He was also really worried about ever having another child. These costs are really affecting people’s choices.
One constituent wrote to me a couple of weeks ago. She said:
“My child attends a nursery in Wandsworth on a full-time basis. This is the cheapest nursery that we could find within a 30-minute walk of our home. My husband and I are ambitious and we consider ourselves to have good jobs and earn good salaries. We would love to grow our family. However, due to the cost of childcare, and despite being careful with our money over the years and earning above-average salaries, we literally can’t afford it.”
She went on to outline why:
“Five days a week of childcare costs us £2,174 per month. This is the cheapest nursery that we could find within a 30-minute walk of our house. This comes to more than £26,000 per year, which we pay from our after-tax salaries. This works out to about the same amount as our mortgage. We do not have parents or family who live nearby and can offer us help with childcare, meaning that we are left with the following options. Number one, I quit my job and look after both kids at home. That would be very bad for my career, our finances, and my mental well-being. Number two, we move to another country. Number three, we do not have a second child.”
How has it to come to this? No mother, no parent, should have to face such a heart-breaking and disempowering set of choices, but when we look back at the Conservative Government’s record, it is easy to see how that has happened. Missing from this debate so far have been the areas that could have made things so different. Different choices over the past 13 years could have made all the difference. Spending on early education and childcare is less than 0.1% of GDP, which is the second lowest investment in OECD countries. More than 5,000 childcare providers closed between August 2021 and 2022—something that many Members said would happen at the beginning of covid if urgent steps were not taken on funding for those childcare providers. The cost of a full-time nursery place for a child under two has risen by about £1,500 over the past five years. Knowingly underfunding the 15 and 30 hours childcare entitlements by more than £2 an hour has forced providers to cross-subsidise, leading to astronomical costs being passed on to parents.
The cost of after-school clubs has risen by £800 a year since 2010, with parents in England paying out an average cost of £2,537 for after-school clubs last year, which is an eye-watering amount, or choosing not to provide extra support for their children in the form of music education, sports and all of those other additional, but essential, parts of a child’s education. More than half of parents who use either formal or informal childcare are saying that they have had to reduce the number of hours they work due to childcare costs or availability: 76% of mothers who pay for childcare say that it no longer makes financial sense for them to work—just like my constituents—and one in four parents who use formal childcare say that the cost is now more than three quarters of their take-home pay. An estimated 1.7 million were women prevented from taking on more hours of paid work due to childcare issues, resulting in up to £28.2 billion of economic output being lost every year. The Government have now announced that they have dropped their plans to expand childcare support. I hope to hear the opposite from the Minister when she rises to answer this debate.
As the Women’s Budget Group has said, the early education and childcare system in England is not working for children, for parents, for childcare workers, for childcare educators or for the wider economy. It is letting down children at a crucial stage of their development, and it is letting down women and parents. The absence of flexible, affordable and quality early education and childcare is a huge barrier to positive child outcomes, to tackling inequality, to increasing women’s employment and to social mobility. The lack of access to high-quality early years education can leave disadvantaged children behind before they have even started school, and require expensive interventions in the future. Every contributor to this debate has underlined how investment in early years and childcare provides very high value for money. It is essential for economic growth and for tackling the unemployment and underemployment issues that face our country at the moment.
Research from the Women’s Budget Group has found that around two-fifths of the total attainment gap between 16-year-olds from the most deprived fifth of families and those from the least deprived fifth of families is already present at the age of five. It is essential that we invest in our early years for the long-term, so that there are opportunities for our young people to thrive.
Cuts in childcare and early years funding for children centres in Wandsworth, compounded by the impact of covid, have had a real impact on children starting school. I have heard that from all of the headteachers of primary schools in my area. I thought that the impact of covid would be felt most by those in, say, year six of primary school going on to secondary school, but schools are reporting that the impact is being felt in nursery school and year one. What has been hit has been the readiness for school. Children are starting school with a significant communication delay and behavioural issues. That is also being felt throughout the school as well. Even more early years support is needed to catch up from covid. We need a modern childcare system from the end of parental leave to the end of primary school.
Other countries have been able to tackle these problems, supporting parents to work and children to thrive, and showing us that it does not need to be this way here. Labour is doing its homework, looking across the world, from Estonia to Australia to Ireland, so that we can learn from the best, building a system that works for families, not constrained by the Conservatives’ so-called free hours approach. We are the party that revolutionised early years with Sure Start centres. I spent many years working in a community centre overlooking a closed Sure Start centre, and it broke my heart every day. I am glad to see family hopes returning, but I am heartbroken about the 13 missing years in which we could have been building on Labour’s excellent legacy of Sure Start centres, which really were proven to work.
As the first step along the road back to good early years support and childcare support across the years of primary school, Labour will deliver breakfast clubs in every primary school in England, as well as plans to allow councils to open more maintained nurseries. I am glad that state-maintained nurseries have already been raised in this debate; I have an excellent one in my borough of Wandsworth—Eastwood Nursery School—and I have campaigned with others, including the late and much-missed Jack Dromey, for our state-maintained nurseries.
In 2010, there were 428 state-maintained nurseries, and really we should have been increasing that number, but now there are only 389 left in the UK. They are a real jewel in our early years provision, providing not only excellent standards of early years education and special educational needs provision, but training for all other nurseries in the area. However, the headteacher at Eastwood Nursery School has said:
“The quality of what we can offer is in real jeopardy if our funding is reduced. We are fearful that the much-needed service we provide to the children of a very deprived community is at great risk if we do not have the secure funding to continue our work.”
That multi-year funding is essential for those state-maintained nurseries. She also said:
“Nurseries will simply not be able to continue at the current rates. Closures of early-years settings across the country will deepen both financial and educational inequalities, while slowing the recovery from the pandemic.”
I hope to hear from the Minister what specific additional support will be given to state maintained nurseries.
I will end by echoing the Early Years Alliance in its summary of the current situation of childcare and early years:
“The sector has reached breaking point. It is vital, therefore the government commits to adequate long-term funding for the early years in this month’s Spring Budget. Anything less will not only seal the fate of the sector, but will also make it even more challenging for families to access the high-quality and affordable care and education they need.”
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.
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?
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.
I am grateful to the hon. Member for giving way, because she mentioned the exchange we had recently in Westminster Hall. Can I be clear that it is not currently a Labour party costed pledge to provide universal childcare in that way? We believe there is a need for radical reform of the system, and we are working towards those proposals, and we will put forward our fully costed proposals to the country in due course.
I am grateful for that clarification, because the perception is, in all the trails and all the newspaper articles—a lot of people just see headlines and social media clips, or people standing up doing very short things—that universal free childcare is coming from the other side.
I would absolutely love to sit down with the hon. Member on the Front Bench and go through some of the newspaper articles I have seen coming from the Opposition, because ultimately, we have to be careful with parents. I do not want parents to be thinking, “Very soon, I will get free childcare, so I am not going to go back to work at the moment. I am going to wait for these big bang changes”, because ultimately it is very unlikely that universally free childcare from nine months to 11, or whatever is being trailed, will be fundamentally affordable to this country. It would not be sustainable and it would be incredibly difficult for the childcare sector to manage, particularly at the moment. I know I am possibly going to make myself unpopular in some quarters, and I am perhaps not giving parents exactly what they want, but it is important that at this stage—for the next week, I hope that this is what the Chancellor and the Treasury are talking about—we are making sure that we are funding and underpinning the childcare sector.
I give credit to the Women’s Budget Group—I think a number of Opposition Members have mentioned this—which has created a coalition of early education and childcare. The coalition has more than 30 bodies, including the Federation of Small Businesses, the CBI, Oxfam, Save the Children, Citizens Advice, the Early Years Alliance, the Fatherhood Institute and the Fawcett Society—loads of people that we have great respect for. The coalition’s ask is twofold at this stage. The first is for an increase to the baseline hourly rate of funding to reflect the true cost of provision. That is the much-feted free hours. They are not free—the taxpayer pays—and the childcare sector is clear that those hours have been underfunded. The Minister and I have had many conversations about this. I would like to see those hours brought up to scratch to ensure we have a motoring childcare sector alongside the stimulation of other things, such as childminders. The second thing that this learned coalition is asking for is reform of the universal credit childcare support to help parents return to work, which I have already mentioned.
The final point I would like to make—I realise I have been going on, but I am so passionate about this, and I am grateful for everyone’s involvement—is that I have met two childminder agencies called Koru Kids and Tiney. They are desperate to provide more childminders and people who can support families. Koru Kids told me that it puts adverts out for childminders and things called “home child carers”, who are effectively part-time nannies who can go into someone’s house. People can take their kids to childminders, but these people can go into people’s houses so that people can work shifts. They can do wraparound care and be flexible. It put out an advert to see how many people would like to apply and it got 75,000 applicants, the majority of whom were women. When it went through the analysis, a huge section were over-50s women or women who were not applying for other jobs. We are thinking about the economically inactive—the Secretary of State for Work and Pensions and the Chancellor of the Exchequer are looking at that—and this is a workforce we could stimulate to get people into jobs, playing a massively important part in our economy. These people have been overlooked.
My final point is on ratios. I am calling for the Government not to make changes to childcare ratios at this stage. It is important that they are investigated. It was never going to be suggested that there would be a change to safety. The Government are looking at the Scottish model, and I do not think anyone is suggesting there are unsafe settings up there. The research I have done with Onward demonstrates to me that the sector is not in a position to take a change to ratios. The sector is also telling us that it would not pass any changes on. As far as I can see, there is no evidence that changing the ratios would change the cost for parents, which is obviously a big focus. We have to be honest about that. If we changed the ratios, the political noise would also be so great that all the other good things that I hope we are going to do would be drowned out.
I thank everybody who is involved. I have had an exchange with the hon. Member for Dulwich and West Norwood, but I hope she knows how much we can all do in this area. It is important to be honest and realistic with parents, the sector and the country.
It has been an interesting debate. We have heard a lot about the experience of mothers in the House. On International Women’s Day, it is right to celebrate the contribution and role of mothers and women generally.
We have heard some personal and interesting birthing stories. I have three children and eight grandchildren; the oldest grandchildren are probably ready to have children themselves, but I hope they will not just yet. With our first child, I vividly recall—I guess we all do—the 6 o’clock news was on and my wife said, “I need to get to the hospital. The child’s on its way faster than we thought.” When I got to the hospital, they said, “Well, thank you very much. You can go home now and we’ll see you tomorrow,” which is how fathers were treated at the time. By 8 o’clock, when I was back at our house, my daughter had been born, so it was not a good experience for me as a father.
With all my children and grandchildren, I was struck by the pace at which I could see the human brain of that infant or young person developing. We now know quite a lot about that from science, as other hon. Members have mentioned. In the early years of a human being’s life, the brain will create 1 million new neural connections every second—let us think about that. That is extraordinary. By the time we are about five years old, there are about 1,000 billion neural connections in the human brain, which is staggering. Those figures show how important the early years are for our intellectual, social and physical development.
In this interesting debate, there has been consensus among hon. Members on both sides of the House about the emphasis that should be put on the early years for the reasons that I have just given. It is self-evident, but science is also telling us a lot about the way in which our brains develop as human beings, although there is more to do.
I will break that consensus, however, because it has been fascinating to hear Government Members say, “We need more money,” but not to face the truth, which is that the austerity programme of Conservative Governments has had a dreadful impact on early years provision. Some 1,300 Sure Start centres have closed since 2010. The hon. Member for Stroud (Siobhan Baillie) said that a lot of them are still open, but 85% of them have been closed on the watch of Conservative Governments. On top of that, 4,500 facilities for young children and the early years closed in a single year, which is staggering.
It is clear and widely accepted that the funding per child is £2 an hour less than is needed. The IFS—hardly a Labour party think-tank—has said that the Government are simply failing to provide the funds required for proper childcare in the early years. It estimates that the total funding for the free entitlement will be 8% lower in real terms in 2024-25. Those cuts are having an impact on human lives throughout the country today, especially in areas such as mine that suffer from major deprivation, as I will illustrate. It is hard to think about the Government’s fiscal strategy, particularly as it impacts on the early years, and not come to the conclusion that what they have done has been tantamount to a form of institutionalised child neglect. It is impossible to avoid that conclusion, and I say that having thought carefully before using those words.
In my constituency, child poverty has risen by 50% since 2015. There are 4,272 children in poverty. It is a very poor area. In the real world that we live in—let us be honest across this House—childcare is now an essential if we are going to meet the needs of the contemporary world, the world of work, and the world of women and parents more generally. Members have talked about the role of mothers and fathers, grandparents, and so on and so forth, and they obviously play a key role—the most important role in the development of a child—but childcare is now a social and economic necessity, and from the figures I have just given about the changes in the architecture of a young person’s brain, it is clearly essential that work is done on this.
Let me give Members one more figure about my own constituency. I have given the figures on the level of poverty, but when we look at the level of early years attainment in my constituency, we are in the lowest 20% of all constituencies in the country. That feeds right through the whole of life and through the structure, social structures and stratification of constituencies such as mine. It is the same for educational attainment when it comes, for example, to national vocational qualification level 4 in my constituency. The fact is that we are in the lowest 20% for early years and, given what I have just said, Members would expect that to feed through to attainment. For NVQ level 4, which is first-year degree level, we are at 22% in my constituency. The average for the country is twice as high at 40%.
Members can therefore see what happens to social mobility, because the ability of a child to take advantage of all that society is meant to offer them depends on poorer people in deprived communities being able to rise up the so-called social ladder. I have some reservations about that expression, but let us use it for the moment. Of the 533 seats in England, my constituency is the 529th least mobile. Therefore, urgent social action needs to take place to provide social mobility to the children being born today in local hospitals in such areas up and down the country. Doing so absolutely depends on us getting this issue of early years childcare and education—I insist on using that word—correct, and we have not got it correct.
Let me turn to the experience of Emma Percy, a constituent of mine who eight years ago asked me to open a centre she called Little Gruffalos. I will spell that for the Hansard writers in a minute or two. This is an amazing initiative taken by local people, and she understood exactly that she was directing her work at the most disadvantaged children from year 2 up in one of the communities that I represent, and trying to give them a better start. She does see it as the provision of education, as well as of care and love, and all the other things we want our young children to have.
But here is the problem: almost every single family who use that centre are already in receipt of all the assistance they can get. We heard my hon. Friend the Member for Putney (Fleur Anderson) mention cross-subsidy. What happens is that wealthier parents, who are not in receipt of some of the assistance that the state offers, are charged more, which then cross-subsidises the children who come from deprived homes, because of the failure of the funding formula to provide properly for children coming from needy families. However, there is nobody in this institution in Hemsworth, Little Gruffalos, who is not in receipt of benefits, and there is therefore no possibility of cross-subsidy. As a consequence, it is on the edge of closing.
I opened Little Gruffalos eight years ago, and I was proud to do so. It is a great institution, and the people working there care, and obviously the mothers and fathers do, too. It is on the brink of closure, due to escalating food prices, heating costs, building costs and all the other things, as well as the cost of paying the staff, to the extent that it is now unable to pay some of the staff. Emma Percy told my office that she has not been able to take an income, but she is so committed that she is trying to continue to provide care. It is totally unacceptable that Government Members simply—I don’t want to say this, but I will—whinge on about the need for more early years childcare, but do not will the means, which would be to provide proper finance and to abandon the whole process of austerity that has had such an impact on so many children across our country and in the area that I am proud to represent.
We claim to be a society that is based on the ability of every person to fulfil their capacity. We have seen how important development is in the early years—I have described it; scientists are still working on it, but we already know quite a lot. The country has to get a grip on early years, and that means putting money in. The hon. Member for Stroud is of course right to say that we might look again at how we spend that money, but to imagine that the aggregate sum of money that the Government are providing is satisfactory—those who want to make that argument are living in a fool’s paradise. We need to do something very radical indeed.
Why should it be that a child born in a hospital in my constituency today, in one of the poorer communities, will probably die younger than people elsewhere in the country from more prosperous areas, and that during their time they will have less of a chance to achieve their full capacity in life? It is simply immoral, it is wrong, and the Government need to get a grip on it in the Budget next week.
This has been a rich debate, and while I agree with much that has been said, it is important to focus on some things relating to the distribution of funding within the estimates that have not been covered in great detail.
As a father of two very young children and someone who spent a long time as a councillor responsible for education and children’s services in a London local authority, and having been present at the inception of the Sure Start programme through to its delivery, with the expectations that were imposed on us as a local authority, and even at the origins of the dedicated schools grants, I find it interesting that many of the trends that people are debating today have been present for a long time in our debates about the way we run our early years.
Over that period, there has been a great deal of progress. The Blair Labour Government were particularly focused on getting more women into work, and that was the focus of what they drove local authorities to do. It is good that over time we have had a switch to a broader appreciation of the benefits to the child and the baby that derive from high-quality early education and care provided in formal and Ofsted-regulated settings. In turn, that has led to greater research and evidence of outcomes. We have been able to focus that investment in a way that is not only more supportive of bringing parents into work, important as that is for a child’s outcomes, but that focuses on the things that help a child to prepare for their journey through school, to the extent that some research can clearly pinpoint from a child’s attainment at the earliest foundation stage, how they will do when they come to key stage 5.
My hon. Friend is making an excellent speech, and I agree with him entirely about the progress that has been made in this area by successive Governments. Indeed, I have outstanding examples of early care in my constituency, such as ABC Rainbow Nursery, Home From Home Nursery, and Small Friends Day Nursery, to name but a few. Now the evidence is clear—we heard evidence today from the Nobel laureate James Heckman—that every pound invested in early years education delivers a return on that investment of £13 in better grades, better jobs and better mental health. Does my hon. Friend agree that, when we have such an obvious, clear open goal and an opportunity to invest in this country’s future, it is a little concerning to see in today’s estimates that early years funding will increase by only £52 million, which is only 1.4%, and that only £35 million is going into early years schools, which is just 1%? If we are looking at this with a view to investing in our country’s future, we would want that 1.4% to go up as soon as possible, and we hope the Chancellor will be listening to these submissions.
My hon. Friend is absolutely correct to highlight the point about return on investment. As a Conservative politician, I always welcome it when I hear Ministers thinking not just about how much a particular course of action will cost the taxpayer, but about what the return is. As we know, one challenge in education—we see it throughout the departmental estimates and in local authority spending returns—is that how we count something is enormously significant in interpreting what it means. We have seen record spending in schools; we have also seen record numbers of children in schools. There are those who say that the issue is per capita spending; others will say that in aggregate the schools budget is larger than it has ever been. Of course, both arguments can be true at the same time. I am sure my hon. Friend the Minister will address the point about return on investment in her response, in the context of the overall school budget and the spend per child.
Let me turn to the method of distribution and how significant it is for the outcomes we want to see. The Department for Education sets out what its spending expectations are in its estimate and then allocates budgets to local authorities. The cash arrives somewhat later in the year, following counts of the number of children in a given area, which usually take place around autumn. Each local authority is then required, through its school forum, to hold a consultation with all those who have a stake in the distribution of that funding at a local level. The early years block forms part of a decision-making process where it is not just early years practitioners who are sat at the table, but the headteachers of big secondary schools, whose budgets tend to dominate the discussion, alongside headteachers of primary schools and representatives of the special educational needs system. That funding, which is ring-fenced within the local authority, is paid in due course to the providers, based on the returns of how many children are there.
It is interesting to note from the Department’s published figures that, in the most recent year for which numbers were available, there was a £55 million underspend nationally in the early years block. The money we allocate to early years is therefore effectively going unspent and being held within the dedicated schools grant at the local level. That might be partly to do with the fact that, because of parental concerns following the covid pandemic, a number of children who would have been expected to be in nursery had not yet started. That would account for it; and yet we see a consistent pattern, certainly since the creation of the dedicated schools grant, of high pressure on special educational needs and disability in particular, pretty much consistent spend of the schools block, exactly as we would expect, and the development of underspends in early years.
When we look at the research into the impact of how we spend that funding, it is worth looking at the flexibilities that we can create in the DSG element of early years funding, not least because, as a number of Members have alluded to, we have lost a significant number of childminders from the early years market, and there are new types of providers that are interested in entering the market, as my hon. Friend the Member for Stroud (Siobhan Baillie) described. I would argue that the fact that a local authority can only pay that money at a given rate, to a given provider and through a strictly determined DFE process means that it is not available to support the development of, for example, new entrants to the market and new types of providers that might like to set up. While we would clearly wish those new providers to fall within Ofsted’s remit, in order to guarantee quality, there is an opportunity to use those existing resources more flexibly, perhaps to develop the market a little further.
At the same time, it is welcome that it is not just DFE funding that finds its way to those providers. There is also the voucher scheme and tax-free childcare, on which I declare an interest as I am personally a beneficiary. Although the use of National Savings and Investments as the payment provider means it seems to take quite a lot longer for the many transfers to take place than would be the case with most other financial institutions, it works very effectively as a substantial subsidy towards the cost of childcare.
For children with special educational needs, there are additional forms of funding. There is the early years pupil premium. To the point my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) made so powerfully, in my time as a cabinet member for education, I saw the benefits to a whole variety of different outcomes from maintained nursery schools. The fact that there is within the DFE system the supplementary funding for maintained nursery schools is most welcome. In children’s centres and early years settings, it can be transformational for a child who may have quite profound disabilities to be able to access good-quality early education at the same time as other children. The disability access fund helps support children to access those settings, with additional money to provide equipment. I saw in my own children’s nursery settings medical equipment and additional technical equipment brought in to ensure that that child could have an equal place alongside their peers at the start of their life. That is incredibly important. I absolutely commend the Government for progressing that and ensuring it is seen by parents as a way of getting their child an equal start in life with their peers.
I want to turn to a point, raised previously my hon. Friend the Minister and a number of other colleagues, relating to an area where we have an opportunity to develop the early years market: schools as providers of early years services. A very large proportion of primary schools have school nurseries that take children earlier than the statutory school age. However, the vast majority of those schools will only offer parents a very limited number of hours, typically from 8.30 am to 11.30 am, and then maybe from midday to 3 pm or 3.30 pm. For most working parents, that will never be sufficient to make it a viable option. In practice, it means that they have to find all their childcare in the private sector, even though there is a state-funded school with top-quality facilities that their child is quite likely to start when they reach statutory school age, which is very close to their home. In practice, it is only parents who are not working, or children who are in a situation where perhaps a family member or a childminder can look after them full time, who are able to access those services.
I urge the Government to think about a more directional approach with schools. In school settings where a breakfast club and an afterschool club are already provided on site for children of statutory school age—so the school is open, staffed and operating during those periods—it is not acceptable to say that its early years facilities are only available for such limited periods. The taxpayer is putting the money in to ensure that these are good-quality settings with fully trained staff. We need to get those schools to the point where they are playing a much more significant part in the provision of early education and childcare. That would help to improve supply, potentially raise quality and reduce the cost to parents.
We are focusing on childcare and early years, but we must not forget that many parents will go through a significant period of their lives with one child who is pre-statutory school age and another child who is of statutory school age. In larger families, there might be quite a number of children. Constituents have told me about the challenges in managing a situation where there is a four-year-old through to a 15-year-old: everything from finding a family car with enough child-safe car seats to transport them around the place, through to trying to manage a normal working life. Schools already provide some of that patchwork, so expanding their offer, in particular ensuring that childcare around school-age children is of a high standard, high quality and as affordable as possible, needs to be a priority.
The Department has not always had the rosiest view of the capacity of local authorities, but it is my experience that the good ones, of which there are examples in every part of the country, have shown that when they have the flexibility they are very good at innovating and finding new ways of delivering these kinds of services. Where there is a new provider with a new model in the local area, they can use the resources available to them flexibly to enable that to go to scale and serve a much larger population of parents.
I would like to spend a moment on how we spend the money in this budget. Lots of Members have given good examples of the transformational effect of particular services. It remains an issue for us as a country—and for the international community—that the impact of interventions in early childhood and childhood more generally are not well-researched. Therefore, the decision making around that is not always very well-evidenced.
My experience of Sure Start is that when the programme was first implemented, it was very focused on capital expenditure on buildings. In the local authority, the direction to me was that my priority was to get the buildings constructed and opened by the deadlines—that was what mattered more than anything else. At the same time, some of the research that emerged as those programmes were evaluated showed that the evidence was mixed. A lot of the evaluations were carried out on the basis of whether parents felt that they had enjoyed their involvement with the children’s centre and whether they felt that it had been useful, rather than looking at the long-term metrics. Long-term metrics on obesity, for example, showed that they had had a positive impact. Other metrics showed that they had not. We cannot assume that because something was popular and well-liked, it was also effective at giving children the transformational opportunity intended.
In my experience, because Government deadlines for their opening had to be met, buildings were often provided on existing local authority-owned land adjacent to schools. The primary focus of the centres therefore became the school readiness of children who were going to attend a particular school, rather than the broader service of the community and the most vulnerable, which was the intention.
The hon. Member shakes her head; I appreciate that the Labour party and the previous Labour Government were enormously attached to that, but it is right that it has been subject to scrutiny. For something intended to be a flagship, it was clear that the Sure Start programme did not reach the parts that other programmes could not reach, which was the crucial and core purpose for which it was set up. That is backed up by research from the United States.
The right hon. Member for South Northamptonshire (Dame Andrea Leadsom) referred to the Early Intervention Foundation. I urge the Government to make the best possible use of the now merged What Works centres, whose chief executive, Dr Jo Casebourne, was previously chief executive of the Early Intervention Foundation. The use of randomised controlled trials was strongly advocated at the outset of Sure Start, and was resisted by the then Government. There was a lot of debate about why that was, and certainly an active suspicion among researchers that the Government did not want any of that research to come back and point out that some interventions were not very effective and not a good use of taxpayer money.
An emerging substantial evidence base demonstrates that although some of the things that we spent money on in Sure Start did not achieve any useful purpose for the children who were supposed to be the beneficiaries, other programmes were effective. Commissioners, whether in the Department or in the local authority, need that information so that, given a choice to spend a given amount of taxpayer money, they can spend it on what will make the biggest possible difference in the life of a child. Evidence week is coming up in Parliament soon, and I hope that the Department and Ministers will have the opportunity to celebrate the use of evidence in the distribution of the funding that we are debating.
Let me give a good example. Several hon. Members have mentioned ratios, which Governments in the past have addressed. There is an enormous amount of guidance for local authorities and providers about how things are to be done, and it is a dull but worthwhile exercise to read the Department’s guidance on calculating ratios. It makes it very clear that, depending on how we choose to calculate them, we can produce very different figures suggesting very different things about the ratio of children to staff at a given site.
A setting can arrive at a number by dividing the total number of staff, or the full-time equivalent, by the number of children on the roll. Ofsted would probably encourage it to think instead about how many appropriately qualified adults per child are in the room—a different figure. Both approaches are fine within the DFE guidance, however, so those who believe that changing the ratios can completely transform the early years landscape and resource spread are perhaps barking up the wrong tree. It may well be that adjusting the guidance would help to address the issue.
To a certain extent I think my hon. Friend is right about ratios, but does he accept that they inject into the system an element of inflexibility and certainly an element of nervousness? As I understand it, most providers under-pitch on ratios for fear of accidentally being caught on the far side through illness, absence or whatever. The delineated hard lines may be subject to interpretation, but they nevertheless produce a rigidity that is not helpful for providers.
My right hon. Friend is right to highlight that there will always be a degree of risk aversion. Frankly, as someone who entrusts his young children into the care of a nursery, I am quite keen for it to be reasonably risk-averse in its calculations. However, my right hon. Friend’s point demonstrates that in debates such as these we need to scrutinise not only the estimates setting out the financial headlines, but the real-world as well as the theoretical impact of the underlying calculations. This is a debate not just about the headlines, such as teaching unions arguing for more resources in one respect while the Government argue for different resources, but about the way in which we count these things, which can have an enormous impact on whether we achieve the policies that we set out.
I commend the Government for the estimates. Estimates debates are always interesting and worth while, because they teach us a great deal about the mechanics of what is going on. The UK has a relatively high spend on education and is a good payer of teachers in comparison with most other European countries—I say that as a former chair of the European Federation of Education Employers as well as the teachers’ employment body for the UK. This will always be a subject of ongoing debate, but it certainly seems to me that in agreeing today’s estimates we are making a clear statement of our commitment to provide strong baseline funding for our education system, particularly the childcare and early years element.
I pay tribute to the hon. Member for Worcester (Mr Walker) for securing this important debate. I am grateful to every hon. Member who has spoken.
It is timely that this debate is being held on International Women’s Day—a day to celebrate the progress that has been made towards women’s equality, celebrate all those before us who have fought for it, and reflect on the work still to be done. This International Women’s Day, we read new data from the British Chambers of Commerce showing that two thirds of women with childcare responsibilities believe that they are being held back at work as a result of soaring costs, while the gender pay gap is getting worse. That is the reality after 13 years of Conservative Government, and it should give cause for sober reflection on the Government Benches.
The Department for Education has a vital role to play in supporting children in their early years through childcare and children’s social care and in supporting children with special educational needs and disabilities. As we have heard from many hon. Members this afternoon, however, all those services are stretched to breaking point, and the Government’s model of funding is contributing to that.
We heard from my hon. Friend the Member for Coventry North West (Taiwo Owatemi) about the appalling situation facing Georgie Porgies Pre-School, a nursery in her constituency. Like so many nurseries across the country, it is struggling to make ends meet and is at risk of closure.
The stories that we heard from my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) about the experience of parents in the earliest years after the birth of a baby certainly chimed with me. I will never forget the image of my husband on the day we returned home from hospital with our first baby, standing in the living room with the baby in one hand and a book about babies in the other, and struggling to work out exactly what we had embarked on in life. I thank my right hon. Friend for those somewhat stressful and traumatic memories. She also described the costs of failing to provide early help and support for the most vulnerable children and their families, and paid tribute to my constituency predecessor, Baroness Jowell. I join her in that tribute, and in remembering Tessa on International Women’s Day.
My hon. Friend the Member for Putney (Fleur Anderson) supplied compelling evidence of the cost of living pressures on families resulting from the cost of childcare, and explained very clearly that the current situation is, whether we like it or not in this place, a consequence of political choices that have been made. My hon. Friend the Member for Hemsworth (Jon Trickett) highlighted the devastating impact of child poverty, increasing under this Government, on the most vulnerable children and their families.
The Government provide a subsidy for early years education and childcare, but the funding model is far too complex for parents, and it does not work for early years providers such as nurseries and childminders either. Families with children under 12 can gain access to support for childcare costs via tax-free childcare or universal credit, but both have very low levels of availability and take-up, and the two systems do not relate to each other. That creates particular problems for working parents on low incomes who want to increase their hours of work. Parents taking on too many additional hours run the risk of losing eligibility for the childcare costs component of universal credit, and having to apply to an entirely separate Government Department, His Majesty’s Revenue and Customs, for tax-free childcare.
The Work and Pensions Committee recently published a report on universal credit and childcare costs. It drew attention to the very low level of awareness of the universal credit childcare element, which is taken up by just 13% of potentially eligible parents, and also highlighted a number of other barriers to access to childcare for parents on low incomes, including the very high costs of childcare even after subsidy, the lack of flexibility for parents with non-standard or fluctuating hours, and the requirement for up-front payment for childcare, sometimes up to a term ahead.
In addition to universal credit and tax-free childcare, the Government operate a system of so-called free hours for two-year-olds, and also for three and four-year-olds. The two-year-olds’ free hours are focused on the families with the very lowest incomes, while the free hours for three and four-year-olds are available only to working families. There is a risk that some families accessing 15 hours a week of childcare for their two-year-old free of charge will find themselves without a place when the child reaches the age of three if they are not in work, which will make it even harder for them to find and sustain employment. It is an enormous problem that universal credit requires parents to arrange and pay for their childcare themselves and then reclaim reimbursement. In most cases, nurseries and childminders ask for fees in advance, and that can present a significant outlay for parents on very low incomes. Fluctuating hours at work, or fluctuating hours of childcare used, can then result in overpayments being recouped in arrears. This is an extremely difficult system for parents to manage, and it should therefore be no surprise that take-up is so low.
The Work and Pensions Committee emphasised the vital role that childcare plays in enabling parents to work, and the transformative impact that high-quality early years education can have on the lives of children and their families. The Committee concluded that the cost of childcare should never be a barrier to work, but we know that that is exactly what is currently happening. For the first time in decades, women are leaving the workplace or reducing their hours because they cannot afford the costs of childcare. More than 50% of parents responding to a survey by Pregnant Then Screwed said that they had been forced to reduce their hours at work owing to childcare costs. This particularly affects women, with Office for National Statistics data suggesting that almost three in 10 currently economically inactive women have left work to care for family, including children, compared with just 6% of men. Grandparents too are leaving employment to look after their grandchildren so that their adult sons and daughters can go to work. In a recent survey, one in four grandparents reported retiring early and others across the country are reducing their hours at work.
I referred to the free hours for two-year-olds and three and four-year-olds as “so-called free hours”, because of course they are not free for nurseries and childminders to deliver. The Government pay nurseries and childminders considerably less than it costs them to deliver those hours. As of 2021, the DFE paid just £4.89 per hour per child to providers, despite its own estimates suggesting that each place would cost £7.49 per hour to provide. That is a shortfall of £2.60 per child per hour, a gap that will only have grown as inflation has hit nurseries and other providers. The Government’s funding model does not work for nurseries and childminders, who are closing their doors in their droves. According to the National Day Nurseries Association, 5,400 nurseries, childminders and other providers closed in the year to August 2022, and this is set to rise even further as support for energy bills is withdrawn at the end of this month.
The Government have effectively set up a cross-subsidy model for childcare, with the unsubsidised places for under-two-year-olds being used to cover the unfunded costs of providing free hours to two-year-olds and over. The consequence is eye-wateringly high costs for parents of the youngest children. Last week, I met a constituent who was about to return to employment after maternity leave for her second child. She told me that the cost of childcare for her three-year-old and her one-year-old will be £2,700 a month. There are very few jobs that pay so well that employees have such a large amount of extra disposable income each month just waiting to be spent on childcare. It is no wonder that more and more women are concluding that they simply cannot afford to work under this Conservative Government. And of course the costs of childcare do not end when children start school, yet the Government provide next to no support to parents who need wraparound childcare at the start and end of the school day.
There is broad consensus on the issue of childcare and the need for reform. The CBI, the British Chambers of Commerce, the TUC, parents and providers all agree that childcare in the UK is broken, and we cannot wait any longer to reform it. Families cannot wait, and our economy cannot wait. Labour understands the urgency, which is why we have announced that a Labour Government would introduce fully funded breakfast clubs for all primary age children as the first step on the road to a childcare system fit for the 21st century that works for families, providers and our economy, and a childcare system that needs to work from the end of parental leave until the end of primary school.
When it comes to the most vulnerable children, this Government’s funding model does not work either. Labour established a network of Sure Start centres across the country, bringing together support for families with very young children and helping to build communities. The current Government decimated the funding for Sure Start, and since 2010, 1,300 centres have closed completely. Family hubs are a pale imitation in only a fraction of local authority areas, bringing services together under a brand but doing nothing to drive improvements in capacity or in quality. Support for children with special educational needs and disabilities is similarly stretched to breaking point. The Government’s announcement this week will do nothing to end the battle for support that so many parents have to endure, with even the patchy measures that have been announced not due to be implemented for at least two years. Our children deserve the best that we can offer, not this mess of piecemeal, incoherent funding, and not services that are being stretched to the limit. Labour put children first when we were last in government, and we will do so again.
It is brilliant to be here on International Women’s Day, and it was wonderful to see Madam Deputy Speaker back in the Chair, as she did much to ensure it is always debated in the Chamber.
This has been a great debate. I always like coming to childcare debates, as the quality of Members’ contributions is always extremely high. I start by thanking my hon. Friend the Member for Worcester (Mr Walker) for securing this debate and for giving a typically thoughtful speech. He is right about the importance of early years, about which he cares deeply. He talked about the amount that childcare entitlements have increased under successive Conservative Governments, and he gave a balanced speech on the challenges we face, the dividends from getting this right and the power of early identification, about which I am passionate. I commend his ongoing work as Chair of the Education Committee, and I look forward to his report.
I thank my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) for her focus and leadership on early years and best start for life. I remember working with her on the £500 million support package in 2019. Before this job, when I was writing a report on supporting parents, she was one of the most helpful, impressive and insightful people I spoke to. I am glad the House got to hear some of her insights today, as graphic as they might have been. There is more, if people would like to discuss it further.
My right hon. Friend is a brilliant champion for this area, particularly in her tremendous work on family hubs. I remember working on family hubs more than 10 years ago, when I was at the Centre for Social Justice, and she brought them to life. I am pleased that they will be in half of local authorities, providing excellent support on, for example, breastfeeding. When I talk to those in places such as A Better Start Southend, they tell me that the effect of breastfeeding support can be transformational in the number of people it can help. It is incredibly effective.
My right hon. Friend mentioned the importance of dads, and she also mentioned the importance of childminders and one-to-one care. My hon. Friend the Member for Stroud (Siobhan Baillie) is also passionate about childminders. I have been to see an Ofsted inspection, and I can talk about the great outcomes that childminders achieve and the wonderful work they do.
The hon. Member for Twickenham (Munira Wilson) talked about a variety of things, including funding for single parents. I was pleased to table a private Member’s Bill on child maintenance, which my hon. Friend the Member for Stroud has brilliantly taken through the House. This is really important for single parents.
There is more we can do on the complexity of tax-free childcare, and we had an increase in tax-free childcare referrals following our campaign last year on childcare choices. The increases in recent times have been quite large, with a 116% increase in referrals, but there is more to be done.
My right hon. Friend the Member for Chipping Barnet (Theresa Villiers) ably raised the plight of children who face troubling challenges in their early years. We spend £10.8 billion on children’s services, and we have set out some transformational work, particularly on early help. I met Ruby, a social worker in Leeds, who is supporting a young lady through her pregnancy as she prepares for birth, and she told me how important that support will be to a successful start. My right hon. Friend has been a longstanding campaigner for maintained nursery schools, and we are investing £10 million in 2023-24. I pay huge tribute to her work in that area.
The hon. Member for Putney (Fleur Anderson) misrepresented the OECD statistics, but she talked about the importance of getting speech and language right in early years, and I absolutely agree. We are making sure that we have enough special educational needs co-ordinators in early years, and we are looking at particular pathways, on which we are working with the NHS, as part of our change programme for the special educational needs package for early language and support. We are also setting out best practice guidance on early language and support, which is crucial.
My hon. Friend the Member for Stroud has been a complete champ on childcare, families and relationships, not least by producing two children in her time in Parliament, which is mind-boggling. She is brilliant in her thoughtful campaigning on childminders, childminder agencies—she mentioned how good they are—training and apprenticeships, and so much else. She might like to know that I am meeting Koru Kids on Monday.
The hon. Member for Hemsworth (Jon Trickett) is the only man from any Opposition party to speak in this debate, for which I commend him. He might want to champion that childcare is not a women’s issue.
My hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) mentioned the dedicated schools grant—I have looked into that, and I would be delighted to speak to him further—the disability access fund and the differences between local authorities. We know that, for example, some can take four to six weeks to get through their checks of a childminder whereas others can take six months; there are a variety out there, but some are doing really well and we need to look at how we spread that best practice.
I want to take this opportunity to put on record my thanks to all those who are working in education settings, providing ongoing support for children, young people and all learners. Some 96% of our providers on the early years register are good or outstanding, which I believe is up from 74% in 2012. I am grateful today for the opportunity to discuss early years and childcare. Let me set out the overall funding picture, an issue that has been raised multiple times today because of the nature of the debate. For 2022-23, the Department for Education’s resource budget is about £77 billion. The change since the beginning of the financial year relates primarily to accounting movements in the fair value of the student loan book, itself driven by changes in macroeconomic factors.
The evidence on early years and childcare has been mentioned today, and it is clear: high-quality early education supports children’s development and prepares younger children for school. Access to high-quality childcare helps children to learn in their earliest years and supports a functioning economy by enabling parents to work. Our 15 hours’ free early education entitlement for all three and four-year-olds has been supporting children’s development and helping prepare them for school. We remain committed to the continuation of this universal offer of 15 hours’ free early education, helping more than 1 million children this year to get on in school.
We are also committed to making childcare more affordable and accessible for working parents, with the 30 hours’ free childcare entitlement. It is one of our key areas of Government support for families, helping to save those eligible about £6,000 a year. Nearly 350,000 children were registered for a place in January 2022, and our 2021 childcare and early years parents survey found that almost three quarters of parents reported having more money to spend since they started using the 30 hours, and almost two in five thought that without the entitlement they would be working fewer hours.
Government support for childcare is not just limited to three and four-year-olds. In 2013, we introduced 15 hours’ free childcare for disadvantaged two-year-olds; 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. Following a consultation, we extended eligibility for this entitlement to children in no recourse to public fund households in September 2022, enabling even more children to benefit.
This Government have invested heavily in the early years, giving our children the best start in life. Some £3.5 billion has been spent in each of the past three years on our early education entitlements alone for two to four-year-old children. I know the sector is facing economic challenges, similar to those being faced across the country. We have already announced additional funding of £160 million in 2022-23, £180 million in 2023-24 and £170 million in 2024-25, compared with the figure for the 2021-22 financial year, for local authorities to increase the hourly rates they pay to childcare providers. In December, we announced that for 2023-24 we will invest an additional £20 million in early years entitlements funding, on top of that additional £180 million I have just mentioned. Taken together, this will help to support early years providers. In addition, we have been supporting them on energy bills and with a £180 million package of support on educational recovery, covering off some of that SEND work that I just talked about.
We have also been rolling out family hubs, with a £300 million package. We have a £200 million programme, the holiday activities fund, which is absolutely brilliant and really targets disadvantaged children. When we carried out the first survey of the cohort coming through, we found that about 70% of children said that they had not been on anything like that before. We have £28 million of support for early language in particular, and £560 million is going on youth services. We have the start for life programme, as well as the early language speech pathways with the NHS that I mentioned and all the work we are doing on that.
I am happy to assure the House that improving the cost, choice and availability of childcare for working parents and making sure that providers are well supported are enormously important to me, and we will not ignore the cost pressures faced by the sector in the cost of living crisis. We will continue to explore all options.
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.
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
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
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.)
The Deputy Speaker put the deferred Questions (Standing Order No. 54).