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.
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