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Daycare Trust Annual Childcare Lecture

This is a timely moment for the Daycare Trust's annual childcare lecture.

Early years provision in general and childcare in particular are now at a critical point. Strong foundations have been laid. The question now is whether the government will have the ambition and the commitment to make the necessary investment to increase capacity, develop the workforce and provide the genuine choice that parents want between staying at home or returning to work.

Discussions on the 2004 Spending Review are well advanced. The outcome to be announced this summer outlining the spending programmes for the three years running from April 2005.

As part of the process the Treasury has established a Childcare Review. Its terms of reference are to consider:

1. whether the long-term projection for childcare and early years education is sufficient to meet the government's aims for employment and educational attainment;
2. whether the expansion is proceeding quickly enough;
3. and whether there are areas where more remains to be done.

So it can be seen that childcare is one of those areas receiving detailed consideration by the government.

I want to use this lecture to make the case for childcare to be treated as a political priority by the government and that it should form one of the major dividing lines between Labour and the other political parties.

In particular I want to address the debate about targeting resources as opposed to universal provision.

Labour's Record

Since being elected in 1997 Labour has made a real difference. The number of childcare places will have been doubled to 1.6 million this year. With a further ¼ million places by 2006.

In 1997 we had the confusion and closures caused by the nursery voucher scheme. Now there's a place for every 4 year old and by April this year there will be a place for every 3 year old.

The Sure Start programme has been established. Over 520 projects now in operation covering nearly 400,000 children at a cost of £216 million.

As a result of tax and benefit changes 500,000 children will have been lifted out of poverty and the measures announced in December's P.B.R. will benefit a further ½ million. Meeting the government's target of taking a million children out of poverty by March 2005.

The P.B.R. also announced the creation of 1,000 children's centres within five years. These centres will provide a range of family support services including childcare.

So it can be seen that much has been done.

However, it is vital that the measures already put in place or announced are regarded as the foundations on which a universal system of childcare can be constructed.

Why a Priority?

Childcare should be a priority for Labour because it is one of the most tangible ways in which those traditional Labour goals of social justice and opportunity for all can be made real.

It is a means by which some of those deep seated problems - inequality, poverty and lack of social mobility can be tackled.

The availability of childcare places mustn't be a lottery with the winners decided by postcode. Public provision of childcare needs to be universal. This would require the government to move beyond its present highly targeted approach.

A commitment to universal provision would demonstrate that Labour is in touch with the needs and aspirations of hard pressed parents who are juggling with the responsibility of being a good parent and the task of holding down a job.

The increased costs involved in such an approach cannot be ignored and will involve some tough decisions.

Whilst places should be free to those on low incomes it would be reasonable to expect a contribution towards costs from those that can afford it.

I have no doubt that most parents would support the provision of extra places in the public sector on the basis of income related financial contributions in order to have a place available and avoid the often prohibitively expensive private sector.

Work carried out by the Daycare Trust shows the extent to which childcare provision remains a postcode lottery.

‘Facing the Childcare Challenge' published by the Trust last November outlined the experiences, views and opinions of parents. They told of the barriers and difficulties they have in finding childcare that meets their needs and that they can afford and that without childcare their hopes and dreams of a better future for themselves and their children had been put on hold.

In 1998 the National Childcare Strategy was based on the firm belief that high quality childcare would help to educate and socialise young children and make it easier for parents – especially mothers – to combine bringing up their child with paid employment.

The main programme to achieve this has been Sure Start. Initially its aims were to intervene in the lives of poor children and to improve parenting. In recent times as the labour market has expanded the focus has shifted on lifting families out of poverty by getting mothers back to work.

Sure Start programmes are based on the 20% most deprived wards in the country. This highly targeted approach has its difficulties. Within the target wards by 2006 only around half the children living in poverty will be provided for.

There is also the problem of ward boundaries themselves. Nearly half of the children in poverty don't live in the 20% most deprived areas. So equally disadvantaged families who just happen to live the wrong side of the chosen ward boundary can only look on with envy as others on the right side of the road qualify for high quality support which is available free of charge.

The reality is that the great bulk of lower and middle income families continue to juggle childcare through a combination of informal provision and the private sector.

Of course Sure Start is not the only support given by the government in this area.

• Over 1,350 projects accounting for over 50,000 new places are currently provided through Neighbourhood Nurseries.
• As mentioned earlier the P.B.R. announced the establishment of 1,000 children's centres within five years.
• There has been a large increase in out of school clubs from 3,500 in 1997 to over 8,000.

The 2002 Spending Review introduced a new out of school childcare programme. 95,000 new places will be created through this new programme by 2006, of which 40,000 will be in areas of disadvantage.

• Substantial assistance of around £1million a day is being made available as a contribution towards childcare costs through the Childcare element of the Working Tax Credit.
• In addition the P.B.R. extended subsidies for employer funded childcare.

Nevertheless the figures show that public sector provision is still patchy. The effect of targeting has meant that some areas have little provision within the public sector. As a result private nurseries are now the fastest growing small business sector in Britain. They have increased by over a third since 2001 to around 10,000.

But the problem for most families is the expense. The average cost of a nursery place for a child under 2 in England is £6,500 a year. In the south east it is over £8,000 a year.

With private provision either too expensive or insufficiently trusted and with limited public sector provision, parents face a real dilemma – to rely on the informal sector – with the child being passed like a relay baton between parents, grandparents, other family and friends or a reluctant acceptance that they have no choice but to give up work and stay at home with their child.

They resent this and understandably so.

Giving people a real choice has to be at the heart of Labour's reform programme. At the beginning of the 21st century there is a new redistribution agenda that Labour needs to address if it is to respond to the needs and aspirations of the British people.

This new agenda is about the redistribution of power, opportunity and choice so that they are no longer the preserve of the elite few but are available to all.

So as we extend choice in education and health we must also do so for parents so that they can decide whether to stay at home or go into work.

Parents shouldn't feel pressurised by the government one way or the other. The government's job is not to dictate but to provide support and take down the barriers that stand in the way of parents making their own choices.

So as the government considers its priorities for this spending round and as ideas are being put forward for Labour's next manifesto there are, I believe, three important steps that need to be taken if we are to make choice a practical reality.

First, there needs to be a significant increase in the present level of statutory maternity pay. It presently stands at £100 a week. To me an increase to £150 a week at an additional annual cost to the Treasury of just under £300 million would be appropriate.

Second, government support should be extended to cover home-based childcare. At present government subsidies are restricted to nurseries, childminders and after-school clubs.

By widening the definition to clearly cover home-based childcarers, would bring in nannies and informal childcare. It would be a recognition that this is sometimes the only form of childcare suitable for people working irregular hours.

Thirdly, there needs to be universal childcare provision. The aim must be to have high quality, accessible and affordable childcare for every child who needs it and parents who want it. Places would be free to those on a low income with a financial contribution from those that can afford it.

Whilst we broaden out our approach it is important that we don't lose sight of the success that the Sure Start programme has been.

It needs to be consolidated and further developed so that all young people have the best possible start in life.

A clear picture is emerging of the state of our country in the first few years of the 21st century. It is one in which the majority of the population are better off than they have ever been.

But there is a hard-core of 5-10% of the population who have no qualifications; face long periods of unemployment; will exist on persistently low incomes and will suffer from poor health.

They will live in neighbourhoods that are crime ridden and suffer from anti-social behaviour. They lack access to good value shops, have under-performing schools and inadequate health provision.

An environment in which disadvantage reinforces itself across generations. Where underachievement leads to a spiral of decline.

So what should the government do?

Some would say do nothing – that people should look after themselves.

Some would say that this is not a political priority. The most disadvantaged 5-10% are unlikely to even register to vote, never mind being engaged enough to make the effort to get along to the polling station to cast their vote.

But Labour has to be concerned and to act. We should support people on the basis of their worth and not due to accident of birth. All should have the chance to bridge the gap between what they are and what they have in themselves to become.

Action would also benefit the hard-working majority. The most disadvantaged 5-10% are a burden on the health service, make demands on the welfare benefits system, make no positive contribution to the economy and from their ranks come those who are most likely to be involved in criminal activity and general anti-social behaviour.

Government action needs to be strong and effective. A register should be established of those children at risk of a life-time of underachievement, poverty and dependency on others.

Identification should take place while the mother is pregnant so that a programme of support and assistance can be put in place from the day the child is born.

Such a programme would include parenting skills; the importance of diet; promotion of the health and welfare of the newly born baby and how to stimulate the child's mental capacity.

In return we should expect parents to give a commitment to actively and positively engage in the process of bringing up their child and the programme provided.

Indeed there should be a debate as to whether the payment of welfare benefits should be dependent on such a commitment being given. This would fit with the government's desire to match rights with responsibilities.

Workforce

The workforce in early years and school-age childcare services is clearly of crucial importance. Yet for too long it has been largely ignored and has suffered from lack of investment and a clear career structure.

The childcare workforce has grown by 21% between 1998 and 2001 so that in 2001 the sector employed around 275,000 people, mainly women.

The government estimates that in order to meet the increased demand the workforce will need to grow by about 8% a year each year to 2006.

This is a major challenge but also an opportunity.

There has been little new thinking and no major reforms to produce a workforce that can respond positively to the new demands being made.

As we review childcare provision the workforce needs to be at the heart of our thinking.

We need to have a debate about the measures that are needed to recruit and retain staff in the sector and how it can be linked with other parts of provision for young people and of caring services.

Conclusion

Good quality childcare and effective early years provision is the new frontier for the welfare state.

It is the means by which we can tackle poverty, improve social mobility and extend opportunities. That is why it should be a top priority for a progressive political programme.