Child Care (London)

Joan Ruddock Excerpts

Wednesday 19th March 2014 Westminster Hall

[Heidi Alexander (Lewisham East) (Lab)]

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. 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.”

[Dame Joan Ruddock (Lewisham, Deptford) (Lab)]

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.

[Heidi Alexander]

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.

[Dame Joan Ruddock]

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?

[Heidi Alexander]

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.

--- Later in debate ---

[Nick de Bois]

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.

[Dame Joan Ruddock]

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.

[Nick de Bois]

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.

[Dame Joan Ruddock]

The hon. Gentleman is generous in giving way again—

[Nick de Bois]

Save some time for the Minister.

[Dame Joan Ruddock]

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.

[Nick de Bois]

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 the right hon. Member for Lewisham, Deptford (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.