I congratulate the hon. Member for Walthamstow (Stella Creasy), who is a friend, on the new arrival. The importance of this issue in the eyes of our constituents, mine included, is reflected in the fact that almost 113,000 people signed this e-petition, which—as has already been set out—calls for
“an independent review of childcare funding and affordability”.
The public, I think, feel we could do more to create a sustainable future for the early years sector, which I represent here today as chair of the all-party parliamentary group on childcare and early education, which has been mentioned. We in that group have spoken for some time about what I would describe as a market failure in this sector, and the need for a meaningful review of it, so it is good that we are having this debate.
Prior to the summer, I had the pleasure of speaking in another debate on this issue, in Westminster Hall in its other incarnation—these debates come around often—and in the months since, things have moved on. The Chancellor has now announced his comprehensive spending review alongside his Budget on 27 October, and it was very useful to speak to him last week—I was in that meeting too, along with my right hon. Friend the Member for Chipping Barnet (Theresa Villiers)—about many of the issues we are debating this afternoon. I must stress from the outset, as I did to the Chancellor, that this is not all about money. For me, it is about getting back to brass tacks to make our early years funding system work for the children of this country, and for the families who rely on it and the economy that relies on those families. It is about ensuring that our hard-working early years educators—I declare my interest: I am married to one—are rewarded. Most importantly, it is about putting our early years sector on a sustainable footing so that this debate will not keep coming around again and again.
I am here as chair of the all-party parliamentary group, but I am also a Government MP, and I am very proud of the landmark commitment that we as a party made through the 30-hours entitlement. However, I have to say that through my work chairing the group, it
has become clear to me that systemic reforms are needed to make this flagship policy work better. Data from the National Day Nurseries Association, which is one of the sponsors of our group, show that in 2019-20, three quarters of councils underspent their early years funding by £62 million. Meanwhile, there is a funding shortfall of almost £3,000 per child per year for every 30-hours place. My hope is that Government will agree to use the forthcoming spending review to fund an early years catch-up premium and address this shortfall, including facing down the local authorities on that underspend. Merely by overhauling the system and tackling the existing underspend, we could properly fund many of those 30-hours places for children right across the country.
That is just one example of how reviewing the funding system would ensure that the existing funding follows the child and is best used. For me, the two issues are intrinsically linked: we cannot fund our early years sector without holding a fundamental review of the funding system, and we cannot simply wait for a review of that system to report without some sort of bridging measures and the long-term certainty that my right hon. Friend the Member for Chipping Barnet spoke about. Between April 2020 and March 2021, there was a 35% increase in nursery closures, just at the time when parents who are key workers needed them most. That is a grave concern for us. The nurseries that are struggling and closing tend to have a higher proportion of Government-funded children. Therefore, the poorer families suffer more from the shortfall between the funding and delivery costs. That causes the lag that is causing the closures.
The future of the sector is in peril, and with it the benefits that it brings to children, their families and the economy. It is not just about the bottom line for providers, but rather the future and development of our children, who are then ready to go on to reception and their primary and secondary education.