§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]
2.31 pm§ Ms Karen Buck (Regent's Park and Kensington, North):I am grateful for the opportunity to raise issues of grave local concern that have wider ramifications for child care strategy, particularly in London.
The importance of the early years agenda to the social and educational development of children, especially children from the most disadvantaged backgrounds, does not need to be restated. More can be lost or gained by tackling the impact of disadvantage between the ages of two and five than at virtually any other stage in life. Important, too, is the contribution that quality affordable child care can make to enable parents to enter the workplace.
Progress made under the auspices of the national child care strategy is to be warmly applauded. A great deal has been achieved in recent years, especially for three and four-year-olds, and in the overall expansion of after-school and holiday provision across the country. However, in the time available, I would like to focus on two closely related sets of concerns regarding early years services in London, and, in particular, in my two home boroughs of Kensington and Chelsea and Westminster.
The decisions now being taken by those councils—they are not isolated examples, because I understand that the London borough of Southwark is set on the same path—undermine the central objectives of the child care strategy. The situation is slightly complicated by the fact that elements of the child care strategy that are entirely sound in principle and work effectively in some parts of the country are less effective in London because of the combined impact of exceptionally high costs and complex demographics.
To take the most important illustration, if the child care tax credit reached a wider group of parents and was as capable of meeting the same proportion of costs in a mainstream community nursery in my constituency as it is in another equally deprived but cheaper part of the country, the situation could be different. That would not make right what I believe to be ill-judged and isolationist decisions by the councils, but there would be the potential—currently lacking—for ensuring that properly planned child care expansion works better than it is doing.
For the record, the sets of decisions that have led to where we are now are as follows. They are the proposed closure of two nursery schools—Maxilla and Ainsworth—by Kensington and Chelsea council; the withdrawal of Kensington and Chelsea council's subsidy to three community nurseries—Maxilla, Colville and Swinbrook; and reduced funding by Westminster city council to its pre-school learning alliance, its contracted play provider, Westminster Play Association, and a number of other grant-funded early-years projects. However, I am happy to say that, last night, Westminster council agreed to some offsetting additional funding to help with some of the cuts.
The package of cuts put forward by Kensington and Chelsea council two years after the deeply unpopular closure of the Ladbroke day nursery is virtually a 1129 masterclass in how not to model an early years policy or a strategy for working with the community. That is odd, given that the council was given the highest performance rating only a few weeks ago.
The package cuts across the model for integrated services set out in recently published guidance on new children's centres. The Maxilla nursery centre, which combines a nursery school and centre for the under-threes and provides extended care, is the prototype for the children's centres that the Government rightly want to develop across the most deprived wards. It offers nursery care and education under one roof and looks after new babies to five-year-olds, until the children enter school. The centre is complemented by drop-in and crèche facilities for parents. It also has the capacity to provide baby care, to which Kensington and Chelsea council has taken particular exception, and offers extended year and extended day provision, which is especially valuable for working parents. It takes a particular type of perversity to wreck the Maxilla integrated nursery centre when Government guidance on the promotion of children's centres is being issued, yet that is exactly what Kensington and Chelsea council is doing.
Alongside the proposed destruction of the Maxilla centre, the council intends to close a second nursery school, the Ainsworth. That is also a popular maintained school with scope for further development to offer extended day and extended year facilities as and when resources allow, but it is being sacrificed to save money. That decision also seems to run counter to the Government's preference for retaining maintained nursery schools, and I hope that the Minister clarifies that when she replies.
The removal of subsidy from three community nurseries—Maxilla, Swinbrook and Colville—will have two immediate effects and could cause longer-term destabilisation. Parents not currently attached to the labour market will be priced out of child care services in those nurseries, so polarising the general nursery user profile between relatively high-earning parents and those who are entitled to free places by virtue of social services need criteria. However, many parents are in the middle. Those who are attempting to rebuild their lives—perhaps after experiencing homelessness or other trauma, or because they are refugees engaged in study to convert the qualifications from their homeland for use in the United Kingdom—will lose out. Indeed, the removal of subsidy will even affect them while they are looking for a job to pay their child care fees.
Those parents who are working and entitled to the tax credit could face a shortfall not of the permissible amount—the 30 per cent. contribution anticipated by the rules—but of at least double what they receive from the credit. The child care tax credit assumes a maximum contribution of about £40 a week for one child, but the unsubsidised cost of a community nursery place is likely to exceed £200 a week, requiring a parental contribution of more than £100 a week, which is increasingly the case for nursery provision across inner London in particular. The incentive to join or remain in the labour market for lower-income working parents is not immediately obvious, yet we know from research carried out by the Department for Work and Pensions that there is a particular problem in London in respect of lone parents 1130 who work and that affordable child care and exceptionally high housing costs lie at the heart of the problem.
Before dealing with the wider implications of what is happening in North Kensington, I want to draw the Minister's attention to the fact that councillors for the majority Conservative group have explicitly and publicly stated that they want alternative sources of Government funding made available to the community nurseries to replace the subsidy that they are withdrawing. They expect the nurseries, all of which are sited in wards that are among the 20 per cent. most deprived in the country, to make up the shortfall from sources such as sure start, the neighbourhood nurseries initiative or even the new children's centre funding, while the council enjoys the benefit of retaining the subsidy.
Parents are understandably bewildered and upset. They see the new Government-funded programmes that are investing in their neighbourhoods offset by cuts in council grant. The nursery closures and cuts in existing provision take place alongside the opening of new neighbourhood nursery facilities. Those are welcome and excellent initiatives, but they, too, may run into similar funding difficulties when their revenue component tapers out, leaving them with unsubsidised charges that are likely to exceed hugely what can be offset by the child care tax credit.
I deliberately did not tie this debate to provision in Kensington and Westminster because, although the decisions on those local issues deserve to be challenged, some wider implications need to be addressed to close loopholes in the child care strategy. Before I close my remarks, therefore, I shall run through a few questions, some of which I hope the Minister will be able to respond to now and others, which are more detailed, that she could answer later.
In his covering letter informing me of the proposal to withdraw subsidy from three nurseries, Councillor Lightfoot, the executive member for social services in Kensington, stated:
You will be aware that the decision in relation to the community nurseries reflects the emphasis of government policy, which is on providing funding for childcare direct to parents via the tax credit rather than to local authorities.That raises several questions. Was it ever the Government's intention to see local authority investment in child care reduced as parents draw on the child care tax credit?How are we to address the problem of child care where the cost significantly exceeds the maximum allowable claim under the tax credit, as it does, especially in inner London? What can be done to tackle the exceptionally low take-up of the child care tax credit, again especially in inner London, where only 2 per cent. of parents who receive child benefit are receiving it? Is it appreciated that, in any event, a flat-rate subsidy effectively discriminates against areas of higher cost, which is only partly offset by higher wages?
Is the Minister satisfied with the way in which local councils have funded children's information services, run by their early years partnerships but funded via an element in the local authority grant settlement? Those partnerships are likely to be at the forefront of take-up campaigns on the tax credit. Is the Minister satisfied that 1131 all that funding is being handed over, because that has certainly not been the case in the London borough of Westminster? Will she do what she can to make sure that local authorities are at the forefront of take-up campaigns on the child tax credit and its child care component?
Is the Minister aware of the exceptionally high capital costs that affect nurseries in London, feeding through into the much higher charges levied on parents? The capital allocation for the neighbourhood nurseries initiative did not recognise the cost of building in central London, and many sources of capital were already committed when the initiative was announced. If councils do not give sufficient priority to child care, it is exceptionally hard to make it sustainable. Without additional capital, Westminster's neighbourhood nurseries initiative could easily collapse. What provision can be made to assist with London's exceptional capital costs?
The questions that I have raised on capital and revenue costs need to be seen not only in the context of what is happening in Kensington but in light of the Daycare Trust's latest child care costs survey, which found that the typical cost of a nursery place in London is already £149 a week, which is £17 above the maximum set for the tax credit. What guidance are the Government giving to ensure that existing services are not lost to the community, and in particular, are not closed as a result of cuts in discretionary expenditure by local authorities? Is it acceptable for a local authority to seek directly to replace its own funding with Government funding linked to tackling disadvantage? Does the Minister believe that it makes sense for a local authority to close two popular nursery schools, as in Kensington, while overseeing the building of a new nursery under the neighbourhood nurseries initiative within walking distance?
Is the Minister aware of the susceptibility of discretionary early years services, such as play and playgroup provision, to cuts imposed by local authorities, and if so, what can be done to protect them? In Westminster, the recent grants round saw a 25 per cent. reduction in funding for the pre-school learning alliance, which has already led to many parents withdrawing their children. Within a few weeks, 72 parents have lost places as playgroups have closed and the effect of fee increases has bitten. Before the fees for after-school play services were negotiated down by parental and political pressure, they threatened to jump to around £400 a year, which for an unemployed family is an unrealistic charge.
Does the Minister accept that there is a problem with funding services for under-fives, holidays and after school that are provided to unwaged families, especially in disadvantaged areas? A modest charge for such services is not unreasonable, especially for working parents, and even more so when such charges can be offset by income from the tax credit for lower earners, but surely there is a real risk that the children whom we most want to benefit may be priced out when their parents only get by on income support or a comparable income. Obviously, there is scope for some funding to be put into services in sure start areas, but that does not always seem to work in practice. In any event, as we 1132 know, many low-income and unemployed parents live just outside the wards that fall into the category of 20 per cent. most deprived, but are themselves families in need. The ability to offset funding problems with sure start resources therefore does not exist.
Kensington and Chelsea council intends to proceed, as I have said, with plans to close two nursery schools and replace them with nursery classes. Research confirms that nursery schools provide higher quality and better outcomes than nursery classes, which is of great importance to parents and communities in areas of deprivation and social stress. Can the Minister clarify the Government's position on closure proposals for maintained nursery schools, especially in areas of deprivation?
The national child care strategy has brought both resources and a proper focus to the vital early years, which is important both for the sake of the children and in underpinning an employment strategy for parents. The national child care strategy is being seriously undermined in parts of London such as Kensington by blinkered policy making. Moreover, there is an urgent need to accept the impact of London's needs and costs on service provision. The range of child care services for people not currently in work is being squeezed hard, and that will hit our neediest children hardest. The working families tax credit is not reaching enough working parents on lower incomes, and may have a structural weakness that prevents it from doing so in high-cost areas. Child care costs, particularly in inner London, are so high that the child care tax credit is not plugging the gap.
I hope that the Government will help me and above all local parents to stop Kensington and Chelsea council destroying its excellent child care facilities. I also hope that we can find solutions to some of the wider problems facing us in our attempts to deliver top-class child care to our children.
§ The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle)I congratulate my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) both on obtaining this debate and on the clear way in which she has set out the issues. She asked me rather a lot of questions, so I apologise if I do not deal with them all this afternoon. However, I shall of course attempt to deal with them in correspondence after the debate.
My hon. Friend is well known in the House for the sharpness and assiduity with which she looks after the interests of her constituents. The children and parents of Regent's Park and Kensington, North have been well served by the way in which she has raised the issue of the national child care strategy in London. Unfortunately, they have not been well served by the plans for child care drawn up by Kensington and Chelsea council and Westminster council, to which she has drawn attention—quite the opposite, in fact. I am appalled by what Kensington and Chelsea council proposes to do. My hon. Friend set it out, but it bears repeating—it proposes to close two maintained nursery schools, Maxilla and Ainsworth. As my hon. Friend made clear, Maxilla nursery centre provides the kind of integrated service that the Government want to encourage and that 1133 parents in the area wish to have. It offers a wide range of services, including nursery provision, education and drop-in crèche facilities, and has the capacity to provide baby care and wraparound care. My noble Friend Baroness Ashton, who has ministerial responsibility for sure start, intends to visit it soon.
To close such a facility and replace it with nursery classes in schools will entail the loss of a range of services as well as integrated wraparound provision, which the national child care strategy sets out to encourage. Parents in the area rightly perceive the change as a cut in service levels. I am afraid that Kensington and Chelsea has form when it comes to the closure of maintained nursery provision because, as my hon. Friend mentioned, it closed Ladbroke day nursery two years ago. The Government recognise that maintained nurseries generally offer high-quality early education from experienced and able staff, and often have unrealised potential for providing more, so we do not want them to close. We are currently consulting on the revision of the existing regulations and guidance on school organisation plans as well as statutory proposals, about which my hon. Friend asked. The new guidance, which we intend to come into force by 1 June this year, emphasises the fact that nursery schools generally offer high quality provision and that
closure proposals should not generally be approved".That is a presumption against the closure of such schools. Once the guidance is implemented, any local authority considering the closure of a maintained nursery school would have to be satisfied that closure was in the best interests of local children and families, and would need to consider factors such as the impact on the community caused by the loss of any such facility, and alternatives to closure. It does not seem to me from the correspondence that I have seen, which my hon. Friend has kindly provided to me, and from the information that she has given this afternoon, that Kensington and Chelsea has any good reason to close this provision. If it does, I would be happy to have it pointed out to me.I also deplore the fact that the council plan to remove subsidy from three community nurseries Maxilla, Swinbrook and Colville. I take the opportunity to make it clear to my hon. Friend that the council has not contacted the sure start unit or any Minister to discuss any of the plans to close or remove subsidy from those nurseries.
The fact that the council argues that nurseries should be able to make up their shortfall from sources such as sure start, the neighbourhood nurseries initiative or children's centres flies in the face of the aim of the national child care strategy and goes directly against the undertaking that statutory authorities, including local authorities, give when they receive sure start funding. That undertaking must be agreed to before sure start local programmes are approved. The statutory agencies that are responsible within the catchment areas are required, among other things, to give a commitment to sure start principles. These principles include a commitment that money will be used to provide additional services. So they undertake to maintain existing spending on services for children under four to ensure that sure start funds are not used to replace funding which is then withdrawn. That appears to be—it is certainly what my hon. Friend is suggesting—what is happening in this instance.
1134 Kensington and Chelsea has two sure start programmes, and it has signed up to the principles. My hon. Friend and her constituents may well want to ask it whether or not it thinks that it is honouring the commitment.
It seems that the arguments that are being used to justify these plans overtly admit that the council is in deliberate and flagrant breach of the promises which it made. If that is the case, that is reprehensible, and I hope that the council will reconsider its approach.
My hon. Friend made reference to a plan by Westminster council to reduce funding to its pre-school learning alliance. She asked me for the Government's view. She is of the view that it would result in the closure of playgroups and provide less money for holiday and after-school play services. These are the sort of services that are very valuable to parents when they are looking for child care. I emphasise that Westminster council is in receipt of sure start moneys in respect of three local programmes. It, too, has undertaken not to siphon money off but to use the resources to provide additional services. I fail to see how it can argue that it is meeting this commitment in view of what my hon. Friend has said, though I was pleased to hear her say that her representations and those of others may be leading to the council reconsidering its position. She mentioned that some offsetting moneys were being provided. I am glad to hear that.
The national child care strategy is there to ensure that every parent can access affordable, good quality child care. We know that this can help to tackle child poverty by enabling parents to choose work as the best route out of poverty. It can improve health, reduce crime and improve children's achievement levels at school. The child care review, which was conducted last year, found that children, parents and communities particularly gain when child care, early education, health and family support are offered together. There are significant payoffs in offering these services to disadvantaged young children.
The review concluded that there was a strong case for the Government to invest in new, good quality child care. Existing services should be expanded and should place more emphasis on health and family support. New investment in child care services needed to be backed by strengthening the role of local authorities in ensuring delivery.
So in the 2002 spending review, the Government committed themselves to just such an investment—doubling the money available for child care by 2005–06. Children's centres, which join up education, care, family support and health, will provide a better service for children, parents and communities. They will reach at least 650,000 children in the 20 per cent. most disadvantage wards in England by 2006. That is the aim.
The idea that the Government are somehow switching their resources to tax credits is nonsense. We are investing resources of £1.5 billion by 2005–06 direct to the providers of such provision, and that included local authorities. This should mean that there will be an additional 250,000 new child care places by March 2006, on top of the earlier target of creating new places for 1.6 million children by March 2004. We shall increase that through measures such as targeting assistance to a wide range of providers in disadvantaged areas, and a greater 1135 use of schools as bases for wider and family services, including child care. To the extent that local providers remove provision that is already in place, it is more difficult to achieve these goals.
The Government are not only interested in more places, however. We know that we need better places, too. Quality is important. That is why we introduced the new national framework of quality standards for child care, regulated by Ofsted. We shall continue to work with Ofsted to improve the quality of child care, so that parents can work, learn and study, confident in the knowledge that their children are in a safe and stimulating environment. We also know that child care needs to be more affordable. Some £370 million is available per year through the working families tax credit to help parents with child care costs. The new tax credits that come into effect next month will improve on the current system in a number of ways.
My hon. Friend asked me some specific questions and I shall try to deal with some of them in the remaining time available. She quoted from a letter to her from Mr. Lightfoot, who is the cabinet member for social services and health in the Royal Borough of Kensington and Chelsea. He stated in that letter that
the direction of travel of Government policy on subsidy to child care is for this to be channelled directly to parents either in the form of vouchers or tax credits rather than through local authorities".That is a travesty of our policy. We are providing funding through tax credits, yes, but we are also increasing funding to local authorities.My hon. Friend asked whether it was the Government's intention that local authorities' investment in child care should decrease as parents draw upon the child care tax credit. The short answer is no. Any local authority that uses that as an excuse to withdraw funding does not understand our policy. The child care element in the working families tax credit is a carefully targeted means of support. It does not cover all parents who use child care, and it was never intended to do so.
So, although the Government provide financial assistance to some parents to meet the costs of child care, and also offer pump-priming and sustainability funding to some providers, local authority investment is still central to providing child care services more generally. It is wrong of the council to represent such a position as Mr. Lightfoot does in his letter.
The new tax credits being introduced next month represent the latest step in the Government's strategy to reduce child poverty. The child care element of the new working tax credit will build on the child care tax credit, providing support for working parents using eligible child care. The child care element retains many of the characteristics of the child care tax credit, but improves on it by being more flexible when a family's circumstances change, and by it being paid direct to the person in the household who is mainly responsible for child care.
By extending the range of eligible child care to include approved or registered home child carers in the parents' own home, the new arrangements will be particularly 1136 beneficial to families with disabled children, and parents who work shifts when conventional forms of child care may not be available. The Government are currently considering how to extend this arrangement so that more working parents can benefit from Government support for this highly flexible form of child care. Given the difficulties that many central London boroughs are having with child minder provision, linked to housing costs, supporting the availability and affordability of child care in the parents' own home may be particularly beneficial.
I know that my hon. Friend is concerned about levels of take-up of the child care tax credit. I can assure her that, since the introduction of the working families tax credit in 1999, the Government have been committed to maximising awareness of tax credits, and ensuring that all those who are eligible can make a claim. The child care tax credit has consistently been publicised by us as a key component of the working families tax credit. There has been a considerable amount of publicity for the new credits that begin next month, including a campaign with four distinct phases that began last September. This publicity campaign is backed up by a dedicated telephone help line and guidance on the Inland Revenue website. There is also a series of information leaflets, including one dedicated to the child care element of the working tax credit, aimed at parents and child care providers. So far, the response to the awareness campaign has been very encouraging.
Publicising the availability of the child care tax credit is not the job just of the Inland Revenue. As my hon. Friend made clear in her remarks, it is also the job of other statutory agencies such as local authorities. They, too, should play their part in encouraging take-up, and should not be withdrawing subsidies from nursery provision in circumstances where take-up of the child care tax credit is low.
My hon. Friend also has concerns about the extent to which the national child care strategy is concerned with helping parents who are not in work and not seeking work. As I have indicated, the Government want accessible, affordable and good-quality child care to be available to all parents who want it. We are putting in unprecedented resources to help us to get to that position, but we recognise that there have been problems with the availability of child care. There are shortages in most child care markets, and they are particularly acute in deprived areas, where providers often struggle to be financially viable. That means that we have to prioritise where resources go and we have targets to ensure that we do so, but inevitably, we must attach the highest priority to ensuring that accessible and affordable child care exists for those who work.
I know that my hon. Friend asked me more questions to which I need to reply. Given the time remaining, I fear that I shall have to undertake to write to her outwith this debate in order to satisfy her with regard to some of those points, but I hope that the remarks that I have been able to fit into the time available have at least answered some of her questions.
§ Question put and agreed to.
§ Adjourned accordingly at Three o'clock.