Sharon's response as Shadow Minister in the Estimates Day Debate on Children's Centres

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Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): I thank the Chair of the Education Committee for securing this timely debate. We served together on the Children, Schools and Families Committee in the previous Parliament and he is already making a name for himself. Although I am very grateful to him for securing the debate, I doubt that the Minister will be quite so grateful given the opportunity it has created for colleagues to air their experiences of the impact on the front line of the decisions that she and the Secretary of State have taken about funding and the removal of ring-fencing.

The debate is timely for several reasons, but primarily because many local authorities are taking decisions that they do not particularly want to take on the future of children's centres. That is especially true of Liverpool. Contrary to some of the disgraceful comments that have been made in the past week and even in this debate, those decisions are not politically motivated. Liverpool is having to take them because of the terrible settlement it has received, which is one of the worst in the country even though it is the most deprived local authority in the country.

The debate is also timely because it fortuitously follows a seminar on Sure Start that was hosted in Parliament this morning by my right hon. Friend the Member for Leigh (Andy Burnham), as well as the 4Children conference at which the Minister of State and my right hon. Friend the Member for Birkenhead (Mr Field), who is not in his place, also spoke. I understand that she thanked them this morning for their constructive criticism, so I hope that she will take my remarks in the same spirit.

If the Minister had been able to come to the seminar, I am sure she would have found it very useful. We heard from a number of parents and others involved in children's centres about what services mean to them and their communities and about the impact that budget cuts could have and are having. We heard from everyone, including some of the Minister's colleagues, whom we were pleased came along. We heard, as we have heard in this debate, about the difference that good children's centres can make to the lives of children and parents. We heard from Willie Wilson, whose children attend the Pen Green centre in Corby. He told us how being involved in its Sunday dads group had helped him to overcome his mental health issues and how much his children enjoy using the centre. He said:

"Everything good in my life in the last five years has been down to Pen Green Children's Centre".

Those sentiments were echoed by a young mum who told us how her local centre had helped her and others to get over post-natal depression. Pen Green is facing big cuts to its funding and might have to cut services. I understand that the Minister's colleague, the hon. Member for Corby (Ms Bagshawe), has said that that will happen over her dead body. I do not know whether the Minister just caught that but I think the Secretary of State did and I hope that they will talk to the hon. Lady about that, as such comments are not necessary.

The panel at the seminar agreed with something that the Minister will have heard at her engagement this morning: the ring fence to Sure Start funding is key to the stability of the service on the front line. It also agreed that it is no good keeping centres open if they are not providing a good quality service.

We learn, as we have today from Hammersmith and Fulham, the Prime Minister's favourite council, that centres that are apparently being kept open will have to survive on a budget of £19,000 a year. No doubt the Minister will agree that that will not go far. It is hardly enough to pay for a caretaker, let alone the running costs and a work force. If we want good results from centres, they need the funding and the stability of funding to employ qualified staff and provide quality services. Cuts and the removal of ring-fencing will not help.

The Minister has been conspicuous by her absence from the past two meetings of the all-party Sure Start group, although we were pleased that the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton) was present. The hon. Lady recently got round to replying to a letter sent from the group in December, to which I referred earlier. Given the Minister's absence from the meeting as she was ill, I was surprised to receive, during the meeting, a Google alert informing me that she had published a local media release that very afternoon criticising her local Labour council in Brent for closing or downgrading

"10 out of 20 children's centres".

Apart from that not being strictly true-I have checked-I thought it was a bit rich that the hon. Lady should be criticising her local council, which is having to deal with a real-terms cut to its budget for early intervention of almost £10 million over three years, or 18%, according to figures that I have from the Library. That is a cut that she handed to the council, and a decision that she made. She even had the sense of humour in that press release to portray that as a rather good deal. I doubt whether many of her constituents will see it that way, even if Brent council manages to protect the majority of front-line services.

We keep hearing the refrain that there is enough money in the early intervention grant to maintain the children's centre network. We heard it from the Prime Minister earlier, and a couple of weeks ago he even said that funding for that grant is going up. Both those statements are misleading to the public. The early intervention grant might be increasing by a small amount between 2011-12 and 2012-13, but from the baseline-the budget that councils originally had for services that will now be provided by that fund-there is a significant cut. The EIG covers more than 20 other funding streams, as well as children's centres, and according to the Department's publications it is being cut by a total of almost £1.4 billion over three years in cash terms. In real terms, Commons Library research shows that that will be more like 18%, with the worst-hit areas seeing cumulative cuts of more than 22%.

Funding for children's centres is not ring-fenced within the early intervention grant, which itself is not ring-fenced from the rest of the local authority's budget, so there is nothing to stop that money being used to fund things entirely separate from what it is supposed to be for. There is therefore no way in which the Minister can realistically tell us today that she is protecting Sure Start. She will call it localism, no doubt, but I call it naiveté in the extreme. Why be a Minister if all she can do is cross her fingers and hope for the best?

I am sure that very few local authorities want to cut budgets for children's centres or other early intervention schemes, but given the scale of the cuts to their budgets across the board many of them will have no choice. If not children's centres, do they cut breaks for disabled children, programmes to combat teen pregnancy, family intervention or targeted mental health in schools, all of which save money in the long term, which is the purpose of early intervention projects? We all know the old adage about a stitch in time saving nine. In short, cutting early intervention funding is ill thought out and will create long-term problems for the sake of short-term savings.

Mr Graham Stuart: I am grateful to the hon. Lady, all the more so after her kind words. It is early days and, as I said in my remarks, I hope we do not see the dismantling of a service that is still embryonic. It is not about buildings or budgets, but about outcomes. How does she think we can best ensure that it delivers the outcomes we want? Would she support a movement to payment by results, for instance?

Mrs Hodgson: I would support a return to the ring fence, if not for the whole early intervention grant, then specifically for the Sure Start element within it. [ Interruption. ] The hon. Gentleman wanted my opinion and I have given it. The proposals are also contrary to the considered views of the Select Committee, which he now chairs, of my right hon. Friend the Member for Birkenhead and of my hon. Friend the Member for Nottingham North (Mr Allen).

The Minister of State seems to be continually distracted and keeps missing important points I am making. She has already had to ask the Secretary of State about my comment on the hon. Member for Corby, and I would not like her to miss anything else I say.

As I said, my right hon. Friend the Member for Birkenhead and my hon. Friend the Member for Nottingham North, whose opinions the Minister actively sought, have both championed the prioritisation of early intervention schemes such as children's centres.

Michael Gove: The hon. Lady says that she would ring-fence funding for Sure Start but has not made it clear that she would increase the early intervention grant. The right hon. Member for Morley and Outwood (Ed Balls) has recently proposed a tax cut by not going ahead with the VAT increase on fuel. If she would ring-fence Sure Start and cut taxes on fuel at the same time, where would the money come from to support the other important services that she was generous enough to list earlier?

Mrs Hodgson: As I am sure the Secretary of State is aware, I am not shadow Chancellor; my right hon. Friend the Member for Morley and Outwood (Ed Balls) is. I will not be tempted to go outside my remit- [ Interruption. ] All I have said is that I would ring-fence the Sure Start element within the early intervention budget, as the leader of the Opposition said today. We have heard the Secretary of State say so many times that he has given councils enough money to maintain their current network of children's centres-that comes from a direct quote-so if they have enough money within the early intervention grant why should we be afraid to ring-fence the Sure Start element in it? It is not a spending commitment.

Michael Gove: The hon. Lady was kind enough to mention earlier that by her own calculation ring-fencing Sure Start within the current early intervention grant envelope would mean that other services would have to go. How will she protect those other services? Will she raise taxes, cut spending elsewhere or, as she said earlier, simply cross her fingers and hope for the best?

Mrs Hodgson: It is Ministers who are crossing their fingers and hoping for the best, not me. By making that comment, the Secretary of State has admitted that the early intervention grant is not big enough for the sum of its parts and that all 22 funding streams that feed into it cannot all be met. He has made that admission on the Floor of the House, and I am sure that my Opposition colleagues are grateful for it.

Bill Esterson: Surely the point is more about what the Government should be advising local councils to do. Will the Government now come clean and give guidance to local councils on which services they should protect in the early intervention grant and the other restricted Government grants that go to local government, or will they continue to say that it is nothing to do with them and down to local councils?

Mrs Hodgson: That is a key point, and I am sure that the Minister will refer to it in her closing remarks.

The Minister has said on several occasions that she wants children's centres to be paid by results. That does not necessarily seem a bad thing, until it is considered that, nine times out of 10, improving results will need up-front funds, or at least guaranteed budgets. I completely accept that we need to ensure the best value for taxpayers' money and that outcomes are what matter, but if payment by results means holding significant chunks of money back from budgets, centres will have to concentrate more on managing their funding, which detracts from the quality of service they can provide with reduced funds.

I hope that the Minister will be able to tell us something about payment by results. In the letter to the hon. Member for Mid Dorset and North Poole (Annette Brooke), which I referred to earlier, the Minister said that she would do so in early 2011. Now, when I look at a calendar, I see that it is definitely early 2011. It is actually March 2011, so I look forward to hearing about payment by results.

The Minister will no doubt tell us that that funding is targeted at those who need it most, but Library research shows the opposite. The brunt of the cuts to the early intervention grants seem to be borne by local authorities with the greatest number of children living in poverty, as my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) just said with regard to Liverpool city council. Local authorities such as Knowsley, Sefton, Wirral and Sunderland, which covers my constituency, are all in the top 10 for cumulative cuts, while authorities such as Cambridgeshire, Richmond upon Thames and Hampshire-all sounding leafy and suburban-are among those that come off best. Can the Minister explain the difference between her words and actions?

There is so much more that I would like to say, but I want to hear from the Minister. To echo the former chief executive of the Daycare Trust, in speaking to the Select Committee, Sure Start

"has been not just a step in the right direction but thousands of steps".

Every closure, every child whose provision deteriorates, every parent who misses out on the help to improve their parenting, and every early years professional forced to abandon the sector because the jobs have disappeared represents another step backwards from the creation of a society where every child has the best possible start in life.

I should like to believe that the Minister and her colleagues think the same, but in so many other areas the warm words that we heard before the election, from the Prime Minister, the Deputy Prime Minister and others, and since have not matched the actions of this Tory-led Government. Promises to protect Sure Start have been broken-plain and simple broken promises. Cash-starved councils are being forced to make unpalatable decisions that look set to deprive many thousands of families of the services that they value highly and, in many cases, rely upon, because of a decision that the Minister and her colleagues have made.

The Lord Commissioner of Her Majesty's Treasury (James Duddridge): Two minutes over.

Mrs Hodgson: I did give way a number of times to Government Front Benchers.

Not only that, but many areas with the greatest need are seeing the biggest cuts. The rhetoric does not match the reality, so the Minister needs to make a decision: she should either be honest about her failure to protect children's centres or take action to make good her words.