Paul Goodman MP: Levelling the childcare playing field

Paul Goodman MP is Shadow Minister for Childcare and MP for Wycombe.

We've just completed a major childcare consultation exercise with children's organisations, voluntary groups and charities.  The Conservative Women's Organisation has already undertaken its own survey of party opinion.  It's too early for a full policy response, since Iain Duncan-Smith's Social Justice Policy Group will be publishing its own proposals during the summer.  But this doesn't mean that the party is painting on a blank canvas: David Cameron, George Osborne and David Willetts have all made major speeches on childcare during the last year, and mapped out the strategic direction in which we're travelling.  I want to sum up where we are after roughly 15 months of David’s leadership.

Like schools and hospitals, childcare – like other aspects of policy for families - is a front-rank issue for voters.  At its heart are two vital aspects: the needs of parents (who more often that not have no option but to juggle work and family life in today’s 24/7 world) and outcomes for children.

We had four major strategic options open to us 15 months ago.  We could have signalled that we want simply to continue Labour’s childcare approach, with its heavy emphasis on state provision and tilt towards getting the mothers of young children into the labour market.  We could have done the opposite - and gone for a free market solution to help workplace parents only, or gone to the opposite extreme and offered support only to parents – usually mothers – who stay at home until their children are adults.

David has rightly spurned these three options, and gone for the fourth: backing childcare choice. As he said in his first major speech on childcare: “instead of imposing a choice on mothers, we should support the choices that mothers make for themselves”.  So where’s childcare choice lacking in Britain today?  Information that I’ve obtained from Ministers through Parliamentary questions helps to show the answer.

Whether you measure day care providers, day care places, or school places, the gap’s been narrowing between the number of openings and closures.  I concede that this isn’t true of childminders – but only because, on the latest figures, there are more closures than openings.  Occupancy rates have also fallen – from 1.6 in 2001 to 1.5 in 2003 and 1.4 in 2005 per full day care setting place.  So what’s going on?

The consensus of the organisations that we consulted is clear – namely, that the way in which Gordon Brown has expanded state-led provision is tilting the childcare playing field against PVI (private, voluntary and independent) providers.  Brown aims to build 3100 Children’s Centres by 2010.  He also wants to offer 15 hours of free education to all three and four year olds for 38 weeks a year by 2010.

The vast majority of childcare organisations we consulted support Children’s Centres and free hours in principle.  So do we.  We’ve no intention whatsoever of trying to roll the childcare clock back to 1997.  But Brown’s outdated, outmoded, Stalinist approach to childcare isn’t ours – and it threatens to damage the prospects of a generation of children.  He gave the game away when addressing his party’s conference in 2004, describing his childcare programme as “the next stage of extending opportunity in our universal welfare state.”

This is a man who clearly believes that universal state provision is the only way forwards.  The childcare results of this control-freak approach are now evident.  PVI providers are up in arms about the Government’s ban on top-up fees, itself a knock-on consequence of the free hours.  They claim that the Government and local authorities aren’t funding the free hours properly, and that the combination of inadequate funding and the ban could force them to close, or go fully private.  Local authorities blame the Government for loading them under the Children Act with new responsibilities, no new money, heavy-handed guidelines and a stress on formal learning at the expense of play.  Ministers loftily declare that it’s up to local authorities and childcare providers to sort their problems out, while studiously refusing to answer questions about how many closures are taking place in the PVI sectors.  Private providers in particular are claiming that the Children’s Centre provision is competing for their places – and that they can’t survive on occupancy rates this low.

This tale of Labour failure helps to show where childcare choice is lacking in Britain today.  So how will the coming Conservative Government provide more childcare choice?  As I say, it’s too early for a full policy response.  Nor have I space to set out all the policy challenges: resolving the conflict of interest created by local authorities acting as service commissioners and providers, raising the quality of the childcare workforce, reforming SureStart, getting special help to families with disabled children, more active support for fathers.  But two main conclusions emerge.

First, on the demand side, we need support for parents that helps to maximise choice.  Michael Forsyth’s Tax Reform Commission has floated the possibility of balancing transferable tax allowances for parents who stay at home with tax breaks for childcare for those in the labour market.  There’s also a case for making tax credits available to grandparents.

Second, on the supply side, we need a level playing field for childcare – to encourage yet more PVI providers to come on to the market, so that the state-led provision of Children’s Centres is properly balanced: we want the PVI providers to remain the main formal providers, as now.  Responses to our consultation are a reminder that PVI providers pay VAT, while schools don’t; that they pay rates, while schools don’t, and that they pay inspection costs, while schools don’t.  We’re looking closely at these disparities – as we are at the contestability and transparency of local authority contracting.

ConservativeHome readers will have read warnings of the nationalisation of childcare under Brown’s regime.  The Parliamentary answers that I’ve had from Ministers reveal that there’s a clear danger of this.  But there’s another scenario.  Brown is scaling back the growth in  public spending in a desperate attempt to solve the problems he’s created – bloated borrowing, higher taxes, wasteful spending.  His successor as Chancellor will find the Treasury larder bare.

So Brown could be taking us to boom and bust in childcare – eventually inviting PVI providers back into the market, as the initial funding for Children’s Centres runs out and the top-up fees impasse intensifies, having first driven those providers out of the market, when he mishandled Children’s Centre expansion and the free hours’ introduction.  It’s obviously impossible for providers to offer a service if they’ve closed, and such an outcome would be the logical consequence of Brown’s clunking incompetence, refusal to listen to advice, meglomaniac secrecy, delusions of omnipotence, and certainty that he’s never wrong.  The next Conservative Government will be charged with restoring predictability and certainty to the childcare market, while levelling the childcare playing field, boosting choice for parents, and – most important of all - raising the life chances of children.