Early Years Providers: Government Support

Lisa Smart Excerpts

Wednesday 9th July 2025 Westminster Hall

[Lisa Smart (Hazel Grove) (LD)]

It is a pleasure to have you in the Chair, Mr Pritchard. I commend the hon. Member for Sherwood Forest (Michelle Welsh) on securing the debate and on her speech, much of which I really agreed with. High-quality early years education is the foundation of young people’s learning and makes an enormous difference to how they settle into primary school and to the rest of their time in formal education settings. There is so much evidence of the role of the first 1,000 days in the lives of all children.

I recently had a great time when I visited Brown Bear nursery and pre-school at Great Moor in my constituency. As well as having a really fun session creating art with some of the little learners, I spent time talking with the nursery’s highly experienced director, Wendy, about the impact of the ongoing challenges faced by nurseries across the UK. Staffing costs make up 70% of the nursery’s outgoings, and the increase in employer national insurance contributions has led to substantial staffing cost increases—and that is before taking into account the changes to business rates. Wendy described the cumulative impact as absolutely crippling. As a Liberal Democrat, I of course supported the calls for the Government to exempt early years education and care providers from the rise in employer national insurance contributions, the result of which has been, as expected, even more strain on nurseries like Brown Bear that are already under enormous pressure.

In 2019, Wendy helped to set up a network for private providers in Stockport, which has since been going from strength to strength. The Stockport private providers network now includes 63 day nurseries, 22 pre-schools, 220 childminders and eight independent nurseries. The early years sector is primarily led by women, and it is worth us all reflecting on the way our society looks at women-led sectors, whether that is early years, care or even the multibillion-pound hair and beauty industry. It is important that we look at how we value those sectors.

[Cameron Thomas (Tewkesbury) (LD)]

I wholeheartedly agree with my hon. Friend. Does she have any thoughts on how we could attract more men to the industry?

[Lisa Smart]

I am grateful to my hon. Friend for that important intervention. We spend a lot of time talking about the gender balance in various industries. My hon. Friend spent time in the armed forces, and I know that the armed forces think long and hard about how they recruit and retain women in particular. Men are often really under-represented in early years education, in care settings, and so on, and they would have so much to add, particularly for those children who do not have many male role models at home or in their families. I look forward to the Minister commenting on that hugely important point, because he is the one in Government and will, I am sure, have all the answers.

Anybody who has had to spend time caring for multiple toddlers will know the skill, diligence, energy and resilience needed to do the job well. It is right that we expect high standards from our early years providers. High-quality early years education is crucial for ensuring that children from any background can go on to achieve their potential. However, many nurseries across Stockport and, indeed, across the country will find it difficult to improve or even maintain their good and outstanding ratings as their finances continue to be squeezed.

[Sarah Dyke]

I think my hon. Friend is coming to an important point that I want to make, too. I recently met Acorn childcare in Somerton, another brilliant women-led nursery in my constituency. Staff there have told me over and over again that they are really struggling with the unsustainable costs and the funding model that is being implemented, plus the free entitlement that they now have to deal with. The spiralling costs are becoming uncontrollable. Does my hon. Friend agree that we must review the rates paid to providers to ensure that they cover the actual costs of delivering good-quality childcare?

[Lisa Smart]

I completely agree that the funding model for early years and nurseries must be sustainable. We do not want to see the business model becoming no longer viable, so that these wonderful providers that give children the best start in life can no longer continue to exist.

There have been Government announcements on the provider agreement, and announcements about how any shortfall in funding can be met by only voluntary contributions. There have also been announcements about staffing ratios. My view—the hon. Member for Sherwood Forest laid out this point really well—is that such announcements do very little to support the quality of provision or staff retention.

For context, private providers across Stockport have told me that since 1999 they have experienced a 250% increase in wages, which is a good thing, but that is in comparison to a funding increase of only 83%. Those two things do not add up. Early years settings are having to deal with the increasingly complex situations that many children face at home, whether that is their special educational needs and disabilities or different situations. The hon. Member for Sherwood Forest was absolutely right to take about far too many children living in poverty, which clearly has a knock-on impact on all education and early years settings. It is important that we restate our request that the Government look at the two-child benefit cap when they make decisions about future planning.

I am approaching my 20th year as a primary school governor, and I am acutely aware of the shared challenges and issues facing children and educators across all settings. If we want to see our young people thrive, the Government must commit to a sustainable funding model for early years care. They must also recognise the true cost of providing high-quality childcare, and not add more pressures to young parents already struggling with the cost of living. I ask the Government to recognise the increasing financial burden on parents, and to understand that proper funding for early years education is really an investment in our children’s and our society’s future.

[Mark Pritchard (in the Chair)]

I call the Chair of the Education Select Committee.