I am grateful for the opportunity for this debate. I should say at the outset that I feel somewhat unqualified to lead a debate on child care. I am not a mum and, on the rare occasions that I am entrusted with the care of my niece, my brother often wonders whether she will come back in one piece. I am delighted that the very prospect of the debate led to a flurry of Government announcements on child care in the past few days. Clearly the power of Westminster Hall debates should never be underestimated, especially when they coincide with Budget day.
I called for this debate because the simple truth is that the cost and availability of high-quality child care in the capital is a real problem for hundreds of thousands of families. The lack of affordable nursery places, after-school clubs and childminders puts a huge financial strain on parents. It stops many women who want to go back to work from doing so, and in some cases means that children miss out on the start in life that they deserve. I welcome the signs that, after four years, the Government may be slowly waking up to the scale of the problem. They are, however, still spending less on child care than the previous Government, and there are questions about who benefits most from their over-hyped voucher scheme.
Help for families who struggle with child care costs cannot come soon enough, but the Government will not be thanked if their schemes hike up already high prices even further. I also cannot help but think that assisting families who earn up to £300,000 with the cost of their nanny, for example, is a step too far. Support is undoubtedly required across the spectrum of low and moderate-income families, but the idea that the Prime Minister struggles with his child care costs will strike most people as somewhat bizarre.
In past few days, Ministers have taken to the airwaves to talk about child care, but the problems experienced by parents have not come about overnight and. Although the debate focuses on the problems in London, such problems are, of course, not confined to the capital. Rocketing fees in London in recent years, the comparatively longer journey times to work, and a growing and relatively young population, mean that the child care crunch is more severe in the capital than elsewhere. That proportionately fewer people in London than in other regions have grandparents close at hand and that many people do not work nine-to-five adds a further layer of complexity. In the past year alone, child care costs in London have increased by 19%, which is five times faster than average earnings. Nationally, since the election child care costs have increased by 30%. Add to that spiralling energy bills, sky-high rents and the increasing cost of the weekly shop, it is no wonder that Londoners feel that they are experiencing a crisis in their cost of living.
London is by far the most expensive part of the country for child care. Childminders for over-fives, for example, cost 44% more than the British average, and nursery costs for under-twos are 28% more than average— 25 hours a week of nursery care now comes in at more than £140. That sounds bad, but it gets worse. The 2014 child care costs survey, carried out by the Family and Childcare Trust, found that the most expensive nursery in London costs £494 a week for 25 hours. Over a year, a full-time place, which equates to 50 hours, would cost £25,700. Given that the average salary in London is not a great deal more than that, it does not take a genius to see the problem.
When I found out last week that I had secured this debate, I took to Twitter and e-mail to ask people for their experiences and views on child care in London. Suffice to say, I got interesting responses immediately. Barbara Mercer on Twitter simply said,
“need to do something—it’s hitting our pockets really hard.”
Bex Tweets told me:
“I just gave up my job because, had I gone back, I would have been out of pocket by £200 a week.”
Julia, a civil servant, decided in effect to work for less than nothing because of her desire to get back to her job. Her short e-mail is worth sharing with hon. Members, as it sums up the problem for many. She said:
“I have two small children—aged two and one. I work part time and take home £1,100 a month after tax and pay £1,950 to my local nursery. Obviously this is ridiculous but luckily my husband and I can just about scrape by and it is worth losing money to go to work because being at home full time with the babies drove me crazy! I earn a decent salary and can’t find cheaper child care in Surbiton where I live so you can see there is a problem. I am very lucky my husband can subsidise me working—many of my friends simply can’t afford to work so are losing their career.”
On that final point about women losing their careers, is that not one reason why they are held back in promotions and cannot get to the top? If they have very large gaps in their working life, the rest of their working life is affected. Women who want to take up the option of going back into work but not full time should be able to do that, but child care prevents that.
I agree entirely with my right hon. Friend. It affects not only their working life, but their home life. If parents are happy and fulfilled in their work life, hopefully their home life will be happy and more fulfilled, too.
I was talking about Julia’s child care experience in Surbiton, which is typical of many women, and indeed men, throughout London. Three quarters of parents in the capital say that child care costs affect how many hours they work. A quarter say that they are unable to work simply because of that cost. Despite being the UK’s richest city, London has the lowest maternal employment rate in the country. The economy loses out because of that: employers lose the benefit of skilled staff and the Government pay benefits when they could be collecting taxes.
Many parents decide that they do not wish to work after having children, or that they want to return on a part-time basis. I do not stand here today to tell mums and dads what they should or should not do. If families can get by and are happy on one parental income and the other parent wants to look after the child or children full time, all power to them, but I want families to be able to make a genuine choice about what is right for them and their children, and not to be boxed into a corner because of soaring child care costs.
For some parents, the double-edged luxury of having to make that sort of decision is taken away right at the start. In some parts of London, the supply—let alone cost—of suitable child care provision that matches families’ needs is a real problem. According to analysis done by the then Daycare Trust of the 2011 child care sufficiency assessments, 15 councils in London—nearly half of all London local authorities—did not have enough breakfast and after-school provision to meet demand. Another 16 councils did not have sufficient school holiday child care and 13 identified that they did not have enough suitable child care for disabled children.
For Londoners who work shifts or those on zero-hours contracts, it can be nigh on impossible to find appropriate, flexible child care. As many as 1.4 million jobs in London are in sectors in which employment regularly falls outside of normal office hours and, as mums and dads know, if a job’s working hours are outside of nine-to-five, they also fall outside normal nursery hours.
The lack of suitable provision may be one of the factors that explains why only 51% of parents in London whose two-year-olds are eligible for the Government’s free 15 hours of child care have actually made use of the scheme. That level of take-up is significantly lower than elsewhere in the country, and it does not really make sense in the context of the relative strength of the London economy. I suspect that there is a range of factors at play to explain why take-up is lower in London than elsewhere. However, I cannot help but think that the serious gaps in child care provision may be part of the problem.
My hon. Friend is making a most excellent speech. Does she agree that the current shortage of primary school places is exacerbating the situation, with parents having to take their children much further than before to get to a local school, which again is because of Government policies that prevent councils from providing more primary school places?
I entirely agree with my right hon. Friend, whose constituency neighbours mine in London. She will know the significant problems that exist for families, particularly for parents in work, when they have to take children to different locations, whether it is for primary school or child care. Despite having met the Minister for Schools at the Department for Education last year to discuss this issue, I am not convinced that enough funding is being made available to London to meet the rising demand for school places, not only at primary but at secondary level, where the demand for places will soon feed through.
In December, the Government announced extra money to help to stimulate the supply of flexible child care in London, but I am simply not convinced that that money will go far enough to deal with the problem. I am also not convinced that this week’s announcements make up for the reductions in support to parents that the Government pushed through earlier in their term of office. We know that in April 2011, changes to the child care element of working tax credit led to a reduction in the amount of help that parents get with child care costs. For example, in December 2013, average weekly payments for those benefiting from that element of working tax credit were around £11 less than they were in April 2011. The Government’s changes also led to a drop in the overall number of families receiving such support. In April 2011, 455,000 families were benefiting from that support, but that dropped by 71,000, and in December 2013 only 422,000 families were benefiting. Given those clear figures, it is not unreasonable to suggest that the Government are guilty of giving with one hand while taking away with the other.
Many of those who struggle most with the cost of child care in London are lone parents on low incomes. My constituency in Lewisham has approximately 9,000 single-parent families, and it is estimated that in London as a whole there are more than 325,000 single mums or dads. Contrary to media stereotypes, the single mums I meet are often desperate to find work, but they find it hard to organise their life in a way to make it possible for them to work. Child care is central to their difficulties.
The need to make work pay for those single mums and dads cannot be overstated. One of my big concerns, before yesterday’s announcement, was that the Government were set on a course with universal credit that would have made work not pay but hurt for some of the poorest single parents, who are struggling to get back into low-paid, part-time work. The Government’s U-turn on the amount of child care costs to be covered by universal credit is welcome, but it is fair to ask whether they instinctively understand the issue when their flagship welfare policy was initially designed with such flaws.
The truth of the matter is that the Government have been forced to promise action on child care costs because they know that Labour’s commitment to increase the amount of free child care available to the parents of three and four-year-olds makes complete sense to increasingly hard-pressed families.
Slough is very like London and our child care market is very similar to London’s. Recently, I have been out talking to mums about child care. The demand that I regularly hear from mothers who want to get back into work is that they need access to training and upskilling with child care. What if they cannot find that either at their original workplace or in a new job if they need to change their career, as was the case with a flight crew member I recently spoke to? Does my hon. Friend agree that we should be trying to ensure that training opportunities for those mums enable them to have their children looked after and to get qualifications and skills?
My hon. Friend makes an important point and I agree with her remarks entirely.
Before I bring my remarks to a close, I shall press the Minister on two further policy areas. First, what specific plans do the Government have to ensure that there is greater flexibility in the provision of child care? Ministers have stated that they would like children’s centres and schools to be open for longer, but it is not clear what direct support those centres and schools would receive to help them to achieve that aim. Would the Government consider, for example, giving greater powers to local authorities to influence the decisions of individual schools with regard to extending opening hours? We know that academies and free schools fall outside the control of local authorities, and if we are to give parents the ability to work it seems to me that they need a guarantee of wraparound care, at least in primary schools. It is right that the Labour party has committed to legislate for that, but it is sad that the Government do not seem to see it as a priority.
Secondly, while there is an urgent need for more flexible child care, there is also a need for the Government to encourage employers to offer better paid and more flexible work opportunities. As someone who regularly fights to get a seat on a train into London Bridge in the morning, I know that a move to more flexible working hours could also benefit London’s creaking public transport system.
I acknowledge that some steps have been taken to encourage employers to offer more flexibility to staff who are parents, but as I understand it such flexibility is still heavily biased towards existing employees and comes with the caveat of a six-month waiting period after starting a job—parents must wait six months before they can make a request for flexible work. Does the Minister have any plans to extend rights for flexible working? I would be interested to hear about the discussions that she has had with her colleagues in the Department for Business, Innovation and Skills on that.
In conclusion, I simply say that London is the wealthiest city in the UK and yet 25% of its children live in poverty. Currently, parents in London face exorbitant child care costs, which drain household finances and leave some of them unable to work when they want to. This is clearly a cost of living problem, but it is also about people’s quality of life and opportunities for their children. Ultimately, what we should all be striving for are children who are well provided for and happy, and more productive parents who enjoy more freedom of choice. As I have said, I am not a parent myself, but it has always struck me that happy and fulfilled parents are more likely to have happy and fulfilled children. Tackling the cost and supply of child care in London is undoubtedly a big task, but it would have equally large rewards. I am not sure whether the recent spate of Government announcements provides the radical solution that they claim. What I do know is that Londoners are impatient for action, and that neither parents nor the Government can afford to allow the current situation to continue.
It is a pleasure to serve under you, Mr Dobbin.
I congratulate Heidi Alexander on securing this debate. Recently, I have found myself on the same side as her on certain issues; that probably comes as a disappointment to her and it certainly comes as a surprise to me. However, in common with her in this debate, I also profess a limited knowledge of this issue, although at one point my wife and I had four children under the age of five. I rightly stand charged of perhaps not doing enough at that time to learn about this subject; I should know more. However, I am pleased that we are having this debate, not just because it is in the context of London, but because it gives us time to reflect on the challenge and on what the Government are trying to do. It also gives us a chance to reflect on the supply side, which is behind many of the challenges we face. I think that hon. Members would agree that, for too long, it has been difficult for many families to find good, affordable child care.
Without going into detail, I shall touch on why child care services and facilities are so important. They help to nurture the child, enhance their education prospects and support families that want to return to work. Given what I have seen in some parts of my constituency, they also help to support the provision of a safe social environment, including the boundaries that children are sometimes, sadly, missing in an increasing number of dysfunctional family situations. Child care can make a massive contribution.
Particularly in relation to my latter point, I am pleased that the Government are seeking to address the welfare of children from less advantaged families, through a cross-Department—almost holistic—response. Part of that, of course, is access to child care facilities, which is an important part of the jigsaw that I have just put together. Having said that, it is inevitable that as the cost of child care increases, the Government’s response has to focus both on supporting and widening the supply side and on mitigating the costs that we face. Whatever we call the policy, I suspect that all hon. Members can agree that Government financial interventions will be mitigating something. The supply side will be fundamental, long-lasting and will hopefully achieve more.
In fairness, I should say that I am struck by the rather candid comments of Labour’s former Minister for Children, Beverley Hughes, who admitted that they got it wrong, saying that Labour’s approach of pouring money into tax credits
“was probably wrong. We were so keen to stimulate demand from parents” with fiscal interventions,
“but in retrospect that was such a mammoth task. We ought to have focused on the supply side…then we could have done more and quicker.”
The hon. Gentleman makes a good point. The former Minister for Children was making the point that we should have put more emphasis on supply-side funding and less on the demand side. Can he explain why the Government are not learning those lessons and are instead focusing much more on the demand side with their tax-free child care announcement yesterday?
I think the hon. Lady will find that we are learning those lessons. I am dealing with that point: my two themes are the supply side and fiscal interventions. However, I will concede that the supply-side challenge in London is particularly difficult. I will also bring to the Minister’s attention some weaknesses in the fiscal interventions that I am experiencing in my constituency now.
It is a current problem. In the interests of fairness, Opposition Members would recognise that the number of child minders halved under their Government, reducing choice and flexibility for parents. There were 98,000 child minders in 1997 and the number fell to 58,000 in 2010. Westminster Hall is generally a constructive environment for debates, but my main point is that this is not a new problem. Costs have been rising above inflation, consistently, since 2003, and since 2009 they have been rising above wages.
I will, as I said, come on to the issues that we are facing in my constituency. However, the work force, on the supply side, is equally as important as the facilities. If the numbers halve, the problem of servicing good quality child care provision will be increased.
I suspect that we would also agree that the quality of the work force is important. That is unquestionable. We do not want to create places just to dump a child in, so that people can go off and have some free hours; no one is into that. We need good quality care. I am sure that the Government’s aims and attentions in this regard would draw cross-party support, because Opposition Members would have said, and tried to do, the same.
We can do things to open up the supply side. I do not generally like to intervene in markets, but we should try to work up constructive ways for the Government to apply leverage to encourage schools to admit younger children. We have to deregulate the process of allowing schools to admit younger children. We made it easier for schools to teach children under three by removing requirements to register separately with Ofsted, a move that was well intentioned, but we do not want to make it difficult. So often, by liberating certain elements of the market, we can free it up and increase the supply side.
On helping schools to offer affordable after school and holiday care, I want primary schools to be open for more hours each day—so does the hon. Member for Lewisham East—and for more weeks a year, to better match the working family’s time table. That can be done locally and I am all for empowering people locally to take those decisions—and, boy, are they needed in my constituency.
We should also be helping good nurseries expand, not stopping them. I would be interested to know whether the Minister is working with councils to explore ways that we can expand the supply side in the boroughs, particularly those that are challenged.
The hon. Gentleman is talking about the need to expand nurseries, some of which will, of course, be co-located with schools. Does he recognise that the crisis in primary school places in London, which we discussed earlier, means that the physical expansion of nurseries is even more difficult now than it may have been in the past, because sites are taken up with temporary classrooms and the space does not exist?
The hon. Lady takes me down a path that I am quite interested in, because we have faced an expansion in primary schools, which unfortunately was not planned in advance. I know that London has transition problems, so it is more difficult to plan in London than elsewhere, but some of the planning that we have done has been to meet an urgent, immediate need for the next year, and we could have used the space much better in some primary schools in my area. We need to free up the planning regulations to make sustainable expansion that much easier. We have seen that done actively in schools. The hon. Lady may have encountered the same problem that I have—that temporary expansion encourages complaints from residents—when we try to meet extra demand in our area.
I often feel that we have missed out on long-term planning. If we could free up planning regulations and look ahead, a strategic plan would allow us to expand provision for both the younger child and the schoolchild. I should add that the problem is not just with primary; we are now passing it on to secondary, and that will be the next challenge.
We might all support the hon. Gentleman and think this is a great way forward, but somebody has to provide the finance. It is impossible to build a new school and employ new teachers, in whatever way that is done, if the finance is not available from his Government.
If we expanded schools to take more students—putting in temporary accommodation--we could have more longer term planning, instead of what I call knee-jerk planning, and get better value, as well as the physical premises. We are providing the money to increase demand. Money is much less the issue when schools are being expanded—and we are expanding them—but I want that to be done more cleverly.
On fiscal intervention, the Government’s changes are designed to ease the burden on parents and those from the most vulnerable areas. Of course, that will help to sort out the immediate problems that people are facing now, but that should go hand in hand with a massive improvement in the supply side locally. I really welcome—I am not going to be shy about it—yesterday’s policy announcement. The Government’s new tax-free child care scheme will have a significant impact on child care costs, potentially providing support to up to 400,000 families in London. We should be proud of that, because it will help to ease the financial challenges parents face even in outer-London suburbs, where the costs are not as high as in some inner-London areas. Parents who want to go back to work will start to breathe a sigh of relief because they will feel that the measure is helping them to do so.
I have a brief question. Does he not appreciate what a difference it would make if that money was allocated to those who earn much less? Helping families with an income of £300,000 a year is one thing, but the benefit for families on average incomes is so much more significant. The measure would make a much greater difference to those who are less able to provide for themselves.
Few people in my constituency are on an income of £300,000. I ask the right hon. Lady to wait for the end of my speech, because I will point to how the specific targeting of those on very low incomes has had an unforeseen consequence for those on slightly higher, edging towards middle incomes. We need to be careful of the outcome of any intervention and I will address that shortly.
The hon. Member for Lewisham East touched on this point, but I think the most significant part of yesterday’s announcement was that more families will be helped to move off benefits and into employment. As part of that strategy, the Government announced that they will cover 85% of child care costs for some 300,000 families in receipt of universal credit. I would have expected that to be talked about more widely yesterday because it is a fine example of excellent joined-up thinking. In some ways, it answers the question that Dame Joan Ruddock has just asked.
We have made money available to help child care providers to support disadvantaged children. Some £50 million will be invested in 2015-16 to offer 15 hours a week of free child care to all three and four-year-olds. That is another welcome intervention. We are helping schools to offer affordable after-school and holiday care. I want to see primary schools open for more hours each day and more weeks each year—I think that will work.
We are also extending free child care to just over 250,000 two-year-olds from low-income families, which kicks in this September, but I want to address the unintended consequences in my constituency. The extension of the scheme to two-year-olds is the pet project of the Deputy Prime Minister, and I would dearly love him to explain the scheme to my constituents who have children at Carterhatch children’s centre in Enfield. About a month ago, parents who have been doing the right thing by working and paying, in some cases for a number of years, for their children to be at Carterhatch children’s centre were, to be frank, brutally informed that their children are no longer welcome because they are fee-paying and the centre’s priority will be those who now qualify for the extended free places for two-year-olds, which from memory includes people on working tax credits of up to £16,900. The centre has said, “We don’t want you because you are paying your way. We are going to focus entirely on those individuals who are now covered by the new Government intervention.” I put it to Members that that is a perverse unintended consequence. People who are working, doing the right thing and paying to get their children into the centre have basically been told that their child can longer attend.
That brings me to the supply side, because being told to find somewhere else is not helpful as there is not much choice in our area. I tackled Enfield council on that, saying, “Look, this is your policy. Have you directed schools on how to implement the Government’s policy?” The council frankly admitted that what happened at Carterhatch is what it would like to see, but says that it is not directing any headmaster to do it; it is entirely the school’s free will. Schools are not working to Government directives, or so I was told by the council an hour ago, but the consequence of intervening in the marketplace is that we have distorted it at the expense of parents who are doing the right thing.
Does the hon. Gentleman realise that it is his Government who have taken away the local authority’s role in planning for places? The strategic local commissioning responsibility no longer exists. It is a free-for-all, and it is the Government who took it away.
I will tackle the point. The choice has been made by the head of the school. He is not responding to a central directive from Whitehall or, it appears, from the local education authority. Although the LEA has expressed a preference, it is not a direction. I am highlighting that we now have a situation in which a head teacher finds it more attractive to follow the direction of the Deputy Prime Minister by disregarding parents, many of whom have used the child care centre for a considerable period of time.
Central direction is not the solution, because it is close to the market intervention that we are talking about and will create another dysfunctional consequence somewhere else. Even if we intervene with the best of intentions, it strikes me as odd that the education establishment thinks it is perfectly acceptable to remove some parents in favour of others. That touches on my supply-side argument: if I was a parent who was told that that was what the school had chosen to do, I would look for somewhere else to go because I would not value the school that had made that decision. We therefore have to accept that the weakness on the supply side, which goes back as far as 2003, is at the heart of our problems. That is what we should address, instead of making the wider interventions with which we seem to be obsessed. That is the ultimate solution to the problem.
I apologise for going on for far too long, but I think I have initiated a lively discussion.
I will try to be quick. I am grateful for your indulgence, Mr Dobbin, because I am due to speak in the Budget debate in the House. Will the Minister forgive me for not being here for her conclusion?
I congratulate my hon. and very good Friend Heidi Alexander on securing this debate. I am also grateful for the work of my right hon. Friend Sadiq Khan to ensure that the issue of child care is to the fore here in London. My right hon. Friend Dame Tessa Jowell is here, and we should remember the work that she did when she was Minister with responsibility for public health to get child care on the agenda and to set up the children’s centres. I suspect that many of us are concerned that the children’s centres are disappearing and are not quite what we envisaged all those years ago. That is the context of this debate.
I reflect, too, on a mother who came to see me last Friday. She is a nurse working in a major London hospital. She is meant to be at that hospital for 7.30 am, and she is a single mum with two kids who have to get to primary school. She is one of the many Londoners in temporary accommodation, and she has been housed by the local authority miles away from the school that her children attend. She is actually housed at the other end of the London borough; I know hon. Members will be familiar with that situation. She also now lives further away from her job. She came to speak to me in tears, asking where the balance was between getting to school for the newly begun breakfast club and getting to work. She faced losing her job. She asked simply whether I, as a local MP, could visit the hospital to ask whether she could have the flexibility to get her kids to the breakfast club and then go to hospital to start work. She is an average Londoner and my heart goes out to her, because I remember my mother juggling the priorities of raising kids on her own and getting to work. The truth is that in the economy we have created—both major political parties have to take some responsibility for it—it is virtually impossible successfully to raise a family on one income in London, particularly if that is one average income.
Child care is a fundamental issue. It takes 31% of the disposable income of London families; that will be 40% in 10 years’ time, and in 50 years’ time, it will be the entirety of their disposable income. We should take the issue seriously. It is not just about child care, however. Local authorities, with their budgets squeezed—we heard in the Budget today that further squeezes are to come in the years ahead—have withdrawn from subsidising breakfast clubs and after-school clubs. Families are having to make difficult choices about how they provide for their children. We should not forget that many working families, when making those decisions, leave younger children in the care of slightly older children; that is what is going on. Those older siblings have to feed younger siblings and marshal the dangers of the internet. They are raising many young Londoners, because of the cost of child care.
To some extent, I welcome the raising of the worth of what is effectively a voucher scheme to £2,000. I suspect that the shadow Minister will raise the issue of who receives that money. It causes me great concern that so much of it will be received by Londoners who can afford child care. Why are we giving subsidies to those earning £300,000? Are bankers, barristers, accountants or senior consultants really complaining about the cost of child care in London? Should we be prioritising them? Child care costs on average £15,000 a year in this city, so let us be honest: £2,000 is a drop in the ocean, and shame on this House if we Members are not very clear about that. It is a drop in the ocean in relation to the demand and the problems that we have in this city.
We should also be clear that the demand among many Londoners and right across the country is for support not just for children aged nought to five, but for those aged nought to 14. People do not want their 11-year-old or 12-year-old in the house on their own, and being expected to make their own breakfast. I am pleased that the Government are shifting the cut-off age for the scheme to 12-year-olds, but I put on the table that the issue is for young Londoners, full stop. The spectrum certainly has to go beyond five-year-olds.
I do not want to get lost in the central discussion on cost and lose sight of quality. Most Londoners are making child care decisions based first on cost and then on location. The real challenge for us in London is to get Londoners making decisions fundamentally based on quality. There are real concerns that a diminution or a stepping back on some of the nursery standards that were in place has led to a drop in quality at nursery level. I have real concerns about our youngest children in London—babies aged nought to 18 months—and the recent changes in regulation regarding the number of child care attendants that should be there for babies.
There is quite a lot of evidence that our youngest children in nurseries should have the one-to-one support that mothers want. It is not just about cost; it is about mum and dad—I should mention dads, as chair of the all-party group on fatherhood—having confidence that the quality and support is there while they go out to work. There is a supply-side issue. We have to drive up standards and ensure that suppliers can flourish and provide the child care that we want. I welcome the debate, but in the end we need a proper 10-year plan. We need to be clear that child care is for those between nought and 14 years old. We need a road map to the universal provision that is required in our capital city.
We must build on the successes that we saw with the children’s centres, although there were problems. The policy began in the Department of Health under the previous Government with my right hon. Friend the Member for Dulwich and West Norwood, when she was responsible for public health. While we were in government, that policy shifted to the Department for Children, Schools and Families. As has been said by academics and others, that shift meant that the policy became more about the Treasury, gross domestic product and getting women out to work, when it should have been about a holistic vision of well-being, as it was when it sat in the Department of Health. Things have slid even further recently. Yes, the debate is about cost, but it is also about quality provision. We should be ashamed that so many of our continental partners are making huge strides forward on child care, while here in Britain the debate stagnates.
I congratulate my hon. Friend Heidi Alexander on securing this important debate, and on laying out so clearly, as other Members have done, some of the issues to do with the high cost of child care in London. I am pleased with anything that secures additional resources for child care in London and goes towards meeting that child care gap, and one thing that can be said about the additional money going into the child care tax relief is that it will, to some extent, help those middle-to-higher earners facing extraordinary costs at the sharp end, particularly in such places as my constituency in central London.
That money is welcome, as is the Government’s recognition of the need to improve the child care offer within universal credit. The organisations campaigning on behalf of low earners were enthusiastic about that recognition. Will the Minister let us know the extent to which that welcome additional assistance for low earners will benefit Londoners proportionately? Historically, the child care tax credit—I am obviously a fan of that investment in tackling working poverty—never benefited London to anything like the same degree as it did other regions of the country. I need to be sure that the universal credit child care offer will benefit London as much as it should.
That speaks to the central point, which is that the investment in child care announced yesterday—welcome as every penny put into child care is—raises a question about whether that marginal pound is best spent in the way that the Government propose. As we know, £750 million of that offer is likely to go to higher earners, with only £200 million going to lower earners. I suggest that the balance of that investment probably does not meet the level of need. We have heard about the cost of child care in London, but it is also important to recognise that not only do we have a supply-side problem, but Londoners are disproportionately likely not to have networks of informal care, so they will need formal child care more than people outside London. Obviously, lower earners are disproportionately more likely than higher earners to rely on informal care. That needs to be addressed if we are to help parents into work, as well as provide an important child development experience, which is what investment in child care should always be about.
One thing that alarmed me—and, I think, a number of organisations—about the universal credit investment is that the money has been identified as coming from elsewhere in the universal credit budget, although as yet we do not know where. I am anxious to know the answer to that, because the one thing we do not want is for support for working parents within universal credit to be taken from the other ways of supporting low-income families. Universal credit is already likely to disadvantage London as the child care tax credit once did, because it does not properly reflect higher costs there, particularly the higher cost of housing. I think that Londoners will lose, proportionately, under universal credit, or will not gain to the same extent as people elsewhere. We need to ensure that the resources do not come from the individuals who are affected by that.
In the couple of minutes that I have left, I want to talk about the extent to which the investment that the Government announced yesterday will help with supply. There is a risk that there will be the child care equivalent of Help to Buy, which helps with buying, not building. The risk is that the announcement will help to increase demand for child care, but do relatively little to increase supply, particularly because major child care providers’ costs are already squeezed. I know that the Minister is familiar with the London Early Years Foundation, which started as the Westminster Children’s Society, and which I hold in high regard. It tweeted about the child care offer for two-year-olds, which is a critical way of increasing supply:
“The challenge of expanding the two year old programme…is whether we can do this for £5.09 in London? How?”
It is a social entrepreneur project, providing child care at the lowest possible cost, yet it wants to know how it can provide that quality offer within the envelope.
I wanted to point out that £5.09 is a national average. The average London rate is higher, because the offer for two-year-olds is adjusted for salaries in each area. It is more like £6 for London.
I am grateful for that clarification. I shall be interested to know why the London Early Years Foundation, probably the major child care provider in London, does not know that. I shall have to have that conversation. Even allowing for what the Minister said, which I accept in good faith, the principal point still applies: as we know, child care workers are disproportionately employed on the minimum wage, and there is cost pressure in the sector because of the cost of providing premises and so forth.
I am concerned, also, about the interaction between the investment and the expansion of the offer for two-year-olds. Councils are being given nursery education grants to expand their places, but the interaction between that investment in expanding places and the money that the Government are putting into increasing supply is leading to interesting anomalies. In my local authority, the child care plan for the coming years states that 400 new places for two-year-olds are needed; 886 families have been identified as entitled, leaving a shortfall of 384. Those places must be provided, and the Government want them to be provided.
What is happening within the cost envelope that we have been given? Guess what: the nurseries in my area have just sent a letter—I saw it today—to all Westminster councillors. It says that Westminster has just announced that it is cutting full-time provision in all its nursery classes and nursery schools in September 2015, so that it can meet the entitlement. It is an extraordinary situation: the day after the Government’s announcement of a boost for child care, Westminster city council is happily telling parents that they will lose their full-time places, on which many people rely to be able to work, so that it can expand the offer. My constituents, and parents looking for provision, will be asking themselves tough questions about the Government giving with one hand and taking with the other. There is much more to say, but I know that other hon. Members want to speak.
All politicians hope we learn from our constituents, and align our priorities with those of the people we listen to and learn from. However, we also come here as people with our own experiences of life. If I am truly honest with myself, probably what provoked my interest in politics and has always been a guiding light is the fact that, from the age of seven, I was brought up by a single parent. For many years, she found it impossible to work, because I was the oldest of three, my youngest brother being three, and my middle brother five. She tried to find child care, but our nan was not around the corner, and she could not find anywhere for us to be looked after to make it possible to work. I remember sitting in a pub back room while she worked in a bar while I was still at primary school. For me, it has always been a matter of huge importance that politicians understand that, for women to be able to play a full role in society and for children to be given a proper chance in the world, politicians must prioritise child care.
I am proud that the previous Labour Government did the amount of work they did to help women, including the fact that we could get nursery education free, as an entitlement, for pretty much the first time. That was something that my grandmother campaigned for and my mother needed. I was pleased to be a
Back-Bench member of the party in government that was providing it. However, let us be honest: that was not enough. I agree with my hon. Friend Ms Buck that any penny spent on child care is completely welcome, so we welcome the assistance that the Government announced yesterday. We wonder how effective it can be, whether it could be more effective if used differently, and whether it completely fulfils the priorities we would set. Nevertheless, given that conditions for working parents are almost desert-like, any additional assistance must be welcomed.
The difficulty in London, of course, and the reason the debate is important for Londoners in the context of cost of living, is the fact that child care in London is so expensive. It is 25% higher than in the rest of the country. We live in societies where our nans are not around the corner, and we do not have the extended support that other communities do. People who have moved to London tend to have families elsewhere. People move around. We do not have support networks and rely on professional support.
I am now a privileged woman, but I struggled with child care when I was at the Bar. I give advice to young women and tell them that if they want to go into the world and have a job, and if they want to have children, as so many women do, they must be realistic: unless things fundamentally change, their career prospects will be compromised by not finding sufficient child care. That affects everyone, but statistics for my constituency show, I believe, that 40% of children are under the poverty line. My constituency also has the highest proportion of single parents. Time and again people come to see me and say they cannot afford to go to work because they cannot afford the child care. The statistics bear that out. If a constituent of mine were to get a full-time, minimum-wage job at Kentucky Fried Chicken—I have a constituent with two children in such a position—she would earn £210 a week. If she did not have the assistance of a friend to look after her child and had to send them to the most heavily subsidised nursery place for under-twos in Islington, she would be spending £167.28 of her £210 a week salary on child care. If she was lucky enough to receive a London living wage, she would be earning £293 a week. How on earth can she send her child to full-time child care under such circumstances? There are further problems when children reach school age, such as before and after-school care and care during the holidays. What happens if the child gets ill? The problems continue.
Politicians still have a long way to go in terms of understanding, prioritising and putting our money where our mouth is. We talk about hard-working families, but we do not consider enough how families can work hard and still best look after their children’s interests. It is not right that wages have been frozen and that in-work benefits and tax credits have gone up by only 1% when nursery school costs increased by 11% in 2012. Life is being made harder and harder. It is not right that the London child care strategy, which developed affordable and flexible child care, was closed when Boris Johnson was elected. It is right that we have extended schools and that we increase the number of free hours of child care for three and four-year-olds, but I agree with those who have asked, “What about the 13-year-olds?” A 13-year-old should not have to go home to an empty house and make their own supper and look after their younger siblings. We need to think again about our political priorities, and I hope that Labour will more than match any promise that any Conservative Government ever make.
You will have had my apologies for arriving late at this debate, Mr Dobbin—I was detained at a Delegated Legislation Committee. It is a great pleasure to be here to support the initiative of my hon. Friend Heidi Alexander. She and other Opposition Members present have given much of their political lives to identifying, recognising and campaigning for improved standards in child care, but I do not want this to become a competition about the monopoly of good intention. I also welcome yesterday’s announcement, in particular because it is in London that children from a range of backgrounds are more likely to grow up together. It is a function of gentrification and of the mixed nature of the communities we represent. It is a good thing that young children grow up understanding the differences in life and family circumstances between them and other children.
Has the Minister studied the experience in Australia in the 1990s? A similar way of funding child care led, as is often the risk in such circumstances, to a multiple increase in the costs of supply. An intervention in the market on cost tends to rig things in the suppliers’ favour and against the interests of parents. I am happy to supply her with the information if she has not yet had the chance to see it.
Different solutions, fiscal or otherwise, are right for different situations. Child tax credits, with the element that recognised the cost of child care, were just that. In the financial life of a family, the period when children are small and when both parents may be working is one of exceptional call on family resources, to which tax credits are a response. I agree that we might come up with different solutions now, but it is important to understand the response in the context of the time.
I will not repeat the point about the extraordinary financial burden that good child care places on family finances, particularly in London, but let us remember that, on average, £1 in every £3 of disposable income in London is spent on child care and that the cost is rising exponentially. I am sure that all Members present have received letters from mothers who doubt whether it is worth going back to work. I recently received such a letter from a mother who took home £2,000 a month when she was working. She wanted to return to work after maternity leave and found that child care for her two-and-a-half-year-old and her relatively small baby was going to cost her £1,870 a month, so she wondered whether it was worth going back. Mothers care most of all about the quality of care that their babies receive, but let us remember that the under-employment of women who wish to work, or who wish to work more, has a substantial economic cost.
Quality is important, and for most mothers quality is assured by their children being looked after by a member of their family, for which they are then rewarded, whether by tax credit or some other means. We must consider family care and remunerated family care, particularly since grandparents are becoming so fundamentally important to the care of small children. I will always remember the horror I felt when, while visiting an extremely prestigious nursery a couple of years ago, I greeted a nursery nurse who had two one-year-olds, one on each knee, and asked what their names were. She replied, “I don’t know.” I would not leave a child with somebody who did not know their name or their little habits and ways. That is the pretty basic thing that we mean when we speak of quality.
My right hon. Friend Mr Lammy referred to Sure Start, and I want to make two points. First, when I, with my right hon. Friend Mr Blunkett, designed the Sure Start programme, it was as a nurture programme, not a welfare to work programme. We now know so much more about the critical 1,000 days that shape a child’s long-term development, and the design of nursery care must take account of that. Secondly, it is just not good for children to be woken up too early when their mothers are doing sequential jobs in order to meet the cost of child care. We need to consider having more flexibility in how nursery staff are deployed. As the economy becomes 24-hour, so must child care.
It is important that we learn from mothers. Last week, I visited an excellent nursery in Croydon and spent the afternoon talking to mothers. I met one group, a number of whom were poorly educated but wanted to be good mothers, and the greatest benefit for them had been the combination of education and child care. One mother, who had four little girls, said that being able to read to her three-year-old was the most important thing that she had ever done, and that she had never thought she would be able to do it.
My final point is on flexibility in pricing sessions of child care, so that people who do not want their child looked after for a whole session might have the possibility of buying part of a session. We should therefore listen to mothers in the grand design, to ensure that child care is as important for the healthy, safe development of children and support of families as it is for our economy.
I congratulate my hon. Friend Heidi Alexander on securing this important debate and on its timely nature. It is slightly humbling to have such a wealth of experience on these matters on the Benches behind me. I cannot possibly make a contribution on this important topic that will match those made by so many hon. Members over the years, but I will attempt to do so in my winding-up remarks.
The issues facing families in London are the exacerbated version of what families around the country face. Child care costs in London, as we have heard, are much greater than in the rest of the country. For example, a full-time under-twos’ place in London is on average £2,500 a year more expensive than it is in the rest of the UK. We have also heard that the supply of places in London is much more difficult than in the rest of the country. London has the lowest take-up of child care in the country. Given the extent of the growing economy in London, and the vibrant economy that we have always had here, it surprises me that take-up of child care should be that much lower here.
That has a direct impact on London’s maternal employment rates, which I was surprised to see are the lowest in the UK—there is a big gap in the rates—especially given the number of lone parents and other factors in London. That low rate has an impact on individuals, who are not able to fulfil their lives or provide for their families as they would like, and on the London economy, because so many women are out of the labour market. That has an immediate effect on gender pay gaps. It is shameful, or should be, that last year the gender pay gap increased for the first time in 15 years. Women suffer the pay and status penalty for taking time out from work. That should drive us all forward continuously to address fundamental issues to do with child care costs and provision, especially here in London.
The issues are not new. I will not lay all this at the door of the Government. These are long-standing problems that we have tried to address over many years. We have to recognise, however, that some of them have got more difficult over the past few years than they needed to, or than they were. If I may, I will use some of my time simply to ask the Minister questions about Government policy, since we have the opportunity to do so.
Many Members have talked about the two-year-olds offer and its impact, but the take-up of the offer in London is the worst in the country—only 51% of eligible children take up the offer, compared with 75% of eligible children in the country as a whole. What is the Minister doing about that? She has earmarked some new money— £8 million was announced last year—but what will it be used for, and how does she envisage that that will increase places and capacity in the system? Does she feel that the money is enough?
We heard about some unintended consequences of the two-year-olds offer from Nick de Bois. We strongly feel that provision and planning of nursery and early years places should be decided locally, and put in place in the context of a longer-term strategy. His Government made a mistake in taking those responsibilities away from local authorities.
The new scheme was announced a year ago, but was revitalised yesterday and in today’s Budget. As others have said, Labour Members welcome any new money or investment in child care, because families are desperate for that help, but we must see this in context. On average, families have lost more than £1,500 a year in child care support over the term of the Government, through loss of tax credits and child benefit. Over the same period, nursery and child care costs have gone up by 30%. Taking those two figures together, families are more than £2,000 a year worse off when it comes to meeting their child care costs than they were in 2010. The scheme and the money are welcome, but they will only get parents back to where they were in 2010.
The issue raised by my right hon. Friend Dame Tessa Jowell about the Australian model is critical. Will the Minister tell us today what assessment she or her colleagues in the Treasury or other Departments have made of the scheme and whether it will affect price inflation? Will parents feel the benefit of the scheme in the amount that they have to pay?
It would also be fairer of the Government to be absolutely clear about who will benefit from the full amount of the scheme. An average parent tuning in and out of yesterday’s news coverage might be forgiven for thinking that they were going to get £2,000 a year per child for help with child care costs. In fact, the figure is nothing like that. The Government have allocated £750 million a year to the scheme; they say that 1.9 million families will benefit, although in the small print they estimate that the figure will be nearer 1.3 million. Whatever way we do the maths, even the Government’s own figures suggest that the average amount per family on the scheme is somewhere between £400 and £500 a year, which is a far cry from the £2,000 per child that the broadcasters and newspapers were reporting yesterday. Will the Minister confirm that there is no new money for the scheme since what was announced a year ago, which was £750 million, even though the scheme is being extended? Those are the main points that I ask her to cover today.
On the universal credit announcement, as other colleagues have said, we absolutely welcome the plugging of that major gap in the scheme. We have been calling for that for many months. We have to be realistic, however: families on tax credits have seen a huge reduction in their child care support, from 80% to 70% under this Government, and the increase to 85% will not come in until universal credit comes in. We do not even know when universal credit will come on stream for families; it could be 2017 or 2018, and families will have faced a seven or eight-year gap with significant reductions. Will the Minister tell us what steps are being taken to help those families who are struggling with their costs now? Does she recognise that it was a mistake to reduce the rate from 80% to 70% in the first place?
We have not talked about the early intervention grant and children’s centres. On take-up and participation in the offer, certainly in my constituency, a number of parents come through the experience of children’s centres, where they learn to deal with child care, build confidence, and develop their labour market skills. The early intervention grant, however, has been cut by 49% in Westminster. The lights are on in our children’s centres, but no one is home—the tumbleweed is blowing through them, and the services have all been closed—and that is unfortunately impacting on other areas of child care.
My hon. Friend makes a good point, and I suggest that she tries to secure a separate debate on that issue because of its importance. We welcome yesterday’s announcement, but it needs to be set in context. A remaining real challenge for families is to face these critical issues, which have a real impact on maternal employment rates and the gender pay gap, and that is something the Government should be worried about.
I congratulate Heidi Alexander on securing this debate on an extremely important topic. The Government’s various announcements this week, from three different Departments—the Treasury, the Department for Education and the Department for Work and Pensions—show how seriously we take this issue. We have announced that parents will get up to £2,000 per child towards their child care costs. Parents on low incomes will get 85% of those costs paid.
I want to challenge some of the things that have been said in the debate. Under this Government, spending on child care and early intervention has gone from £4 billion to £4.5 billion. I am happy to supply hon. Members with statistics for their local authorities. It is worth making the point that we spend as much money on this, as a proportion of GDP, as countries such as France and Germany. We have to try to get better value from the money we spend. That is the intention of a lot of the Government’s work.
Many Members have pointed out that the problem has not arisen overnight. Child care costs have been rising steadily for the past 15 years. However, this year’s Family and Childcare Trust survey showed that costs in England are starting to come down for the first time in 12 years. In England, costs of nursery care are frozen in nominal terms and have fallen once inflation is taken into account. In Wales, the cost of equivalent nursery care has gone up by 13%, and in Scotland, by 8%.
The use of child care in deprived areas has gone up by 16% in the past year. We have also seen an increase in maternal employment rates and the number of women in work. That is because the Government have made an effort to streamline the complicated child care system we inherited. Whereas there were multiple bodies inspecting child care providers, Ofsted is now the sole arbiter of quality. We have also announced a single child care register that all child care providers should be on.
Mr Lammy, who is not in his place, made an important point about older children. The Secretary of State has recently announced that for our next manifesto the Conservatives are looking at the idea of enabling and funding schools to open for longer hours to give an integrated offer to parents. The issue is not just about child care but about education.
I raised the fact that councillors are being asked to support our local nurseries and nursery classes, but are being told that they have to cut places from full time to part time because of the funding pressures of the offer. Does that meet the Minister’s objective of providing longer hours of care?
I am about to come on to the issues that are specific to London, and will address that point then.
We are absolutely passionate about quality and improving outcomes, which we know have previously been issues. There is an 18-month vocabulary gap between children from low-income and high-income backgrounds. That is a problem for all of us, because it means that children start school in different positions. We have improved the standards for early years teachers, so that they now have to meet the same standards as primary school teachers. We have seen a 25% increase in the number of early years teachers enrolling on courses in the past year. We are also raising the standards for early years educators. This week, we announced an early years pupil premium for three and four-year-olds, which means that there will be extra money for the most disadvantaged children aged three and four.
We have improved the Ofsted framework, so it now looks at the qualifications of staff in nurseries and is much more focused on outcomes. We have introduced Teach First for early years teaching, to make sure that we are getting the best and brightest graduates into that vital sector. Most importantly, we are working on a coherent framework for the teaching structure from the ages of two to 18, so that early years provision is not seen as an afterthought but as a core part of our education system.
I recognise that there is a greater challenge in London. That is why I launched an £8 million fund with the Mayor of London at the end of last year. That aims to unlock the £1 billion that the Department for Education spends on early years provision in London.
I very much agree with the comments on increasing flexibility. A lot of school nurseries offer parents three hours, five days a week. That does not fit with many people’s working patterns. It also does not use our school nursery resources very well. In London, 45% of early years places are in school nurseries, which are generally open only between 9 am and 3 pm. If those school nurseries were all open between 8 am and 6 pm, that would give 66% extra child care hours. It is not a question of building more facilities but of using our facilities better. Those nurseries could open for two five-hour sessions a day, offering multiple hours.
Forgive me, but I have to keep an eye on the time to make sure that I cover all the points that hon. Members have raised. I wanted to say specifically to the hon. Lady that the figure is even higher in Lewisham—half of all early years places there are in school nurseries. In Enfield, the figure is 42%. Think of the extra places we could provide if all those school nurseries opened for the longer hours I mentioned. It is not that the children should have full-time places; it is a question of parents being able to access places flexibly. Nurseries are entirely able to charge for the extra hours parents take, so they can open to suit the timetables of working parents.
That is why we launched the scheme with the Mayor of London and are working with different London boroughs. I would welcome the support of local MPs. Our officials have been discussing the matter with officials from Enfield and Lewisham in particular, as well as with officials from the three boroughs concerned. I hope that those discussions will help to address some of the issues. At the moment, we have fantastic resources, particularly in London, but we are not using them to full effect. That is a microcosm of the overall problem in child care and early years education: are we getting the best out of the facilities that we have?
If we look at the proportion of places that are in school nurseries, which is up 50% in some boroughs, and the fact that children’s centres provide 4% of child care, there is a much bigger issue to explore with regard to how we best use our school nurseries. In the Children and Families Act 2014, we have legislated for school nurseries to be able to take two-year-olds without having to register separately.
We probably share the same aspirations, but the Minister talks about enabling schools to do things, whereas I am interested in how she is going to make them happen. Some of the time, schools do not want to do those kinds of things, and neither the Government nor local authorities have the power to get us to the position that we all want to get to.
We are instituting a school-led system, and it is important that head teachers and other teachers buy into that. We are making things easier by removing a lot of bureaucratic hurdles for schools. It is in a school’s interest to have high-quality nursery education and child care in the school, to help children start school ready to learn, able to communicate and with the right vocabulary. We need to change the culture in education to embrace early years provision more, and move away from having rigid barriers.
We are looking at how admissions policy can affect these issues, particularly for the most deprived children, so that schools have an incentive to take children on. There is a massive opportunity in that area. Some school nurseries across the country have made those changes. They offer very affordable places for children and help their school to do better. That is why we are working with boroughs such as Lewisham and Enfield. We are producing case studies, getting the data together and encouraging schools. The right first step is to make things simpler and easier for schools. I welcome the support of hon. Members in championing this issue in various areas. We can get much better value for money from what we are doing.
I want the overall child care landscape to be understood, as there is a lot of confusion about exactly what proportion of children are in which type of place. In London, a high proportion of children are in school nurseries at age three and four. We are piloting more places for two-year-olds in schools. A high proportion of children are in private and voluntary sector nurseries. I am working with organisations such as the National Day Nurseries Association so that non-school nurseries can link better to schools, the private sector can learn from the public sector and vice versa, and there is less of a divide between them. That is how we will get positive professional practice in the early years sector—by encouraging more inter-working.
On the use of money and the example of Australia, the key point is that we need to make sure that we expand supply. I agree with Ms Buck that if we do not, but simply push more cash in, there will be inflation. That is why the Government are making it easier to expand.