Childcare Bill Second Reading Speech
Check against delivery
Madame Deputy Speaker, I rise to support this Bill at Second Reading.
On this side of the House we have a proud record on childcare and enabling women to work.
We introduced free childcare for 3 and 4 year olds.
Delivered the first, and only, childcare strategy across government.
Created Sure Start centres serving families in every community.
Expanded school nurseries and more than doubled childcare places.
We increased maternity leave from 12 weeks to 12 months, increased maternity pay and introduced paternity leave.
We introduced the right to request flexible working and gave parents help with the cost of childcare through tax credits and vouchers.
Childcare was a key part of our plans to support families and make work pay.
We welcome any investment in childcare.
I am pleased the government now seem to accept that supply side funding through free entitlements is a more effective way of helping parents with the cost of childcare, and of controlling prices, and increasing quality, as I have long argued.
But for all her trumpeting of government achievements on childcare, their record tells a different story.
Financial support for childcare for most families fell in the last Parliament. In that time childcare costs rocketed by a third – up over £1500 since 2010.
The pre-election promise of tax free childcare remains undelivered and early years childcare places have fallen by over 40,000 since 2009.
The two-year old offer, whilst a good policy, remains under subscribed.
And Sure Start centres have gone to the wall in many areas. Even the Prime Minister disagrees with his own government’s record on Sure Start.
I welcome the u-turn on tax credits from the Chancellor. However, cuts to tax credits to date have hit families hard.
So, the story of the last Parliament by this government is one of reducing support for working families, childcare costs going up and the gender pay gap remaining stuck for the first time in fifteen years.
Today’s claims of significant resource for childcare belie the reality for parents. Families were promised tax free childcare now, its going to be another two years behind schedule, and the three and four year old entitlement which is also due in Autumn 2017 still have funding question marks. So any parent at the last election with a two, three or four year old would have expected to receive additional support with childcare after the election. Yet none of these families will now receive a penny as their children will have passed the age of eligibility.
Competing aims of childcare policy
Childcare is vital to our future success for two key reasons. Firstly, for growing our economy through enabling parents to work and to work more hours; secondly, to close the developmental gap pre-school - critical to educational achievement throughout a child’s life.
Importance of childcare: to the economy
High quality flexible childcare is critical for the economy.
We’ve made great strides in childcare in the last 20 years but important policy challenges remain.
Our maternal employment rates, particularly for mothers with children aged one to four years old, are poor when compared with other OECD countries.
Over a third of mothers who want to work are unable to do so because of high childcare costs. Two thirds of mothers would like to work more hours but are unable to do so because of unaffordable childcare bills. This is particularly true for second earners as the Resolution Foundation and IPPR have illustrated.
Many mothers still face a pay and status penalty in the labour market for having children. Whilst the pay gap is small for younger women once you hit 40 the pay gap can be stark.
Increasingly work is becoming the only option for both parents as pressures on family budgets have increased. Single earner households are now more likely to be in poverty according to the Joseph Rowntree Foundation.
So to boost our economy and give families the chance of a decent job and income childcare investment is essential.
Importance to social mobility
High quality childcare is vital too to tackling the disadvantage that exists. We know that many of the most disadvantaged five year olds start school 18 months behind their peers. Good quality childcare can close this gap and give children a firm foundation for school and later life.
However, it is important to note that sometimes these two aims of economic output and early education require different policy solutions but are too often conflated. And sometimes seeking to improve one element can come at the expense of the other.
Which is why supply side support – like extra free hours – is a good way to deliver both.
Tax free childcare – although still some way to being delivered – is designed to put cash in parents’ pockets and does not contain levers to deliver quality or control prices.
Whilst the two year old offer aims to reduce inequalities rather than an economic driver.
The extension of the 15 hour offer to 30 hours should be about delivering both objectives. But this requires quality and funding.
Challenges of Expansion
As I have said we support this Bill.
However, there are a number of challenges with the government’s plans and it is only right that we scrutinise them.
Firstly, this childcare policy needs to be considered in the context of the totality of childcare support, which is complex, and, as I have said, we have seen the overall support fall for families whilst costs have gone up.
Secondly, any measures, such as this, should be robustly analysed for their impact on the market in which they operate, including impact on price, places and quality.
On these tests many questions still remain.
Put simply, high quality, affordable childcare is not cheap and attempts by government to cut corners will ultimately fail.
At the heart of this Bill is a serious funding gap and today’s announcements only go some way to answer these.
The Other Place voted to amend the Bill on three separate occasions, mainly on procedural grounds, because the Bill lacked substance and clarity about funding.
When Ministers first announced the free offer they said it would cost £350 million. This figure was pie in the sky, by their own recent admission, more recently revising this figure to £640 million.
However the Institute for Public Policy Research has identified a £1 billion funding gap in the Government’s plans, even on the basis of the current hourly rate. We welcome today’s announcement which on the face of it shows the government understands that there is a funding shortfall. However, we will have to interrogate this further.
The switching of money from reducing those who are entitled to the extra support to provide extra funds for the funding of the three and four year old offer, is a switch spend not new money and still leaves a funding shortfall.
Families where one parent works between 8 and 15 hours a week who are often amongst some of the poorest families will be rightly very disappointed that they are no longer eligible for this extra support. She’s right to reduce the entitlement at the top end of the salary scale to £100,000 per parent, something we’ve strongly argued for, but can she clarify how this funding will be allocated?
Supply of places
Madame Deputy Speaker, the danger in the government’s failure to adequately fund the free offer could have far reaching implications on the childcare market.
House of Commons Library analysis shows that there are over 44,000 fewer early years childcare places today than there were in 2009. In addition, six in ten local authorities tell us they don’t have adequate supply of childcare for local parents. There is a downward trend in childcare places which should raise concern.
Private and voluntary providers make up the vast majority of childcare places in England. If there is not adequate resource for these nurseries they will simply not offer the 30 hours which will lead to a reduction in choice for parents.
I welcome the increase in the hourly rate but questions still remain about how many new places will be provided. And without an increase in supply costs will continue to rise for parents.
High Quality Childcare
Parents will be very concerned that the quality of childcare could also be damaged by the failure of the Government to adequately support their proposals. There is a wealth of evidence, from the Education Select Committee and from Ofsted that clearly identifies the strong links between ‘outstanding’ provision and the best-qualified staff. Poor childcare is worse than no childcare, as the Select Committee reported, and can be detrimental to a child’s development.
I am very concerned that unless the Government has the answers on adequate funding the result will be a diminution in quality provision.
Can she give a commitment today that beneath these proposals and those as outlined in today’s autumn statement there are no plans to reduce quality, to increase ratios or to lower requirements for those who can offer the free entitlement.
Insufficient funds and poor delivery could have the opposite effect the government wants and lead to fewer places, poorer quality and higher costs for parents.
The Government has ample time to address these concerns before their policy is due to introduced in the autumn 2017. We want to work with Ministers to ensure their plans are credible and affordable and meet the tests that have been set out.
Part of the problem here is that the government has no clear strategy for childcare. I hope she will reflect on this and come back to this House in due course with an overarching childcare strategy.
We will continue to support the progression of this Bill through Parliament but it is the Secretary of States responsibility to satisfy this House and the Other Place and indeed parents that this plan for childcare is deliverable and sustainable.
To make this policy work, she must set out her funding plans and reassure us through the passage of this Bill.
There are other questions that also remain unanswered such as who will be liable to prove parents are working and working sufficient hours and questions of how disabled children will be supported as part of this Bill.
I want this policy to work. I want it to be a success and I want it to have meaning for parents and to ensure children are supported to achieve a great start.
I look forward to working with her on this and I recommend that we support this Bill tonight.