Sharon Hodgson MP

Working hard for Washington and Sunderland West.

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National Day Nurseries Association conference 20.06.13

Sharon delivered a speech to the National Day Nurseries Assocation Annual Conference in Peterborough.



Thank you very much,

It’s a pleasure to join you this afternoon.

I hope you’ve had a less hectic day than I have so far. 

I’ve gone from a TV recording, talking about the international tax regime and how to prevent tax evasion at 8.30am to listening to Her Majesty’s Chief Inspector’s speech this morning, and then a dash to the train to join you in time for this speech.

You’ll be pleased to hear one of Wilshaw’s key recommendation is on Early Years and key stage 1 and there is a whole chapter in his report dedicated to it.

While you might have had a less hectic morning, I can see that you’ve certainly had a busy one, with lots of interesting speakers.

And you’ve had the Minister as well.

***Government record***

Now, this Government talk a good game on childcare.

But what’s the reality?

Costs continue to rise above inflation. 

According to the Family and Childcare Trust figures, early years prices are up by nearly 19% since 2010.

And availability is falling. 

The latest Ofsted figures show a loss of 5,000 places over the last 6 months, and there are 900 fewer nurseries and 1,500 fewer childminders since the election. 

I worry that these have been particularly focussed in the poorest areas where childcare businesses are the least sustainable. 

We certainly know that there are at least 250 fewer Children’s Centres providing full daycare, out of 800 in 2010, according to the DfE. 

And government support to parents has been cut, with some parents losing up to £1,500 in childcare tax credits.

It’s a triple whammy which is forcing parents – and particularly women – out of work.

Those three factors inevitably feed into and exacerbate each other.

Rising costs and less support means children withdrawn from nurseries because parents can’t afford it… 

…which makes businesses less sustainable… 

…forcing providers to either increase costs again, shed staff and therefore places, or close altogether.

And that’s just the side of it that parents see and feel in their pocket.

Just as concerning for me is the drastic cuts to support for settings with quality improvement.

We’ve seen 40% cuts to funding from local authorities to providers for things like training, and employing graduate leaders.

But it’s not the council’s fault. 

Their funding from Government – which used to be a ringfenced budget for sure start, early years and other childcare – is now 40% lower. 

But actually there isn’t really a fund at all – it was first put in an unringfenced early intervention grant, and now it’s just an accounting line in the general fund to local authorities.

And we wonder why there’s chaos!

It’s the worst kind of smoke and mirrors – every time you rename a funding stream, you lop 20% off it – but if you listen to Michael Gove you’d think parents and providers had never had it so good.

We all know the reality.

And reading reports this week of the Department for Education looking to cut their non-schools budget by £2bn in next week’s Spending Review, I’m worried that reality is about to get even more stark. 

***Government future plans***

If there’s one thing the events of the last few months have shown us, it’s that this Government has no credible plan to solve this childcare crisis that they’ve created.

The plans they do have, I think most people in this room know, are not the answer.

Increasing ratios was obviously the issue that got the most cut-through, and got people the most exercised.

It’s not hard to see why – it was fundamentally a question of quality and safety.

I don’t think anyone has ever seen the early years sector, parents and academics so united in their aim to nip that particular brainstorm in the bud.

What’s so shocking is that it ever got as far as it did. 

I have a general rule of thumb that I work by when it comes to policy development.

When everyone is telling you something is a bad idea… 

…including those people – such as private nursery providers – who you think could actually benefit from it…

…including the experts that you have actually paid to advise you on it, and many others besides…

…and including tens of thousands of members of the public signing petitions… 

…then there’s a pretty good chance that it’s a bad idea (regardless of what they do in France).

On behalf of all the parents, grandparents and early years workers who have campaigned against those changes, I’d just like to congratulate and thank the NDNA, and you as its members, for the pressure that you exerted, which has contributed to this victory for common sense that we have had in the last couple of weeks.

Make no mistake – Nick Clegg wouldn’t have arrived at the decision he did without that pressure.

But even after his intervention, there was still 6 days of worries because the Department hadn’t confirmed it.

We had people pointing journalists towards the absolutely crazy figures that the DfE had put out, saying that Clegg was depriving parents of a 25% cut in their childcare bills. Madness!

We feared that the difficulty in finding places for disadvantaged two year olds would mean that certain Ministers may yet drive it through.

With just three months before it’s due to come in, our Freedom of Information survey shows that only 60% of councils have the capacity to provide these places.

The temptation to snap your figures and increase capacity by 50% overnight – theoretically, at least – must have therefore been great.

So when the Minister finally slipped out the confirmation in her speech last Tuesday, I was delighted.

That battle may now be over, but there are more on the horizon.

The Government’s response to their Childcare Commission consultation hasn’t even been published yet.

But it looks increasingly like the architecture that supports childcare providers is going to be ripped up.

Local authorities have already had nearly half of their funding stripped away, so it’s perhaps unsurprising that it looks like the duties that they have to perform with that funding are being removed as well.

We know there are problems in some areas accessing the free entitlement funding.

We hear of councils requiring reams and reams of paperwork, or not paying the rates that providers need – as your report today highlights.

But there’re also a lot of great local authorities which justify the funding they get directly and retain, by providing the kind of ongoing and tailored support to providers that I fear would be beyond the capability of Ofsted.

Deciding who gets the funding is a good lever that local authorities can use to drive up quality, yet the Government want to give it automatically to settings which, according to Ofsted, ‘require improvement’, even if the local authority have concerns about it.

Actually, they even want to give it to new providers before any kind of inspection from Ofsted or the local authority.

And that’s obviously in addition to stripping local authorities of their duty to secure information, advice and training for childcare providers. 

Providers may well get a few pence more per hour for a free entitlement place, but will they be able to afford to buy in the kind of training and support – including SEN support – that they’ve previously had?

So there’s a choice there – you either maintain CPD programmes and buy in support, by increasing prices or taking the hit on the bottom. 

Or, you lose it, and risk quality falling away.

I’ve heard it said that providers should work together on an informal basis to bring each other on.

But let’s be honest.

With the best will in the world, businesses don’t help out their competitors, especially if doing that means that a member of your staff isn’t doing the job that they’re actually paid for, and which brings in revenue.

In the childminding sector, it seems apparent that the Government have settled on their vision of what will replace local authorities. 

Childminder agencies are causing a lot of upset and confusion – although some see them as an opportunity.

Childminders see them being railroaded through against their wishes – borrowing from a failed Dutch experiment which saw costs rise and quality fall drastically.

And they’re certainly right to say they’re being railroaded – the legislation was crowbarred into the Children and Families Bill without any consultation.

Parents are understandably worried and confused about the lack of individual inspections for agency childminders, and this certainly does have the potential to create a two-tier system.

But essentially, the inspections issue aside (although that’s obviously quite a big aside), agencies just replace services which good councils do now.

The difference being that now, presumably, they’ll have to hand over a proportion of their fees for those services – which can only mean higher costs to parents.

So whether or not you agree with agencies, at least we know that that’s how the Government see childminders getting support.

What we don’t know is what will be the equivalent for group settings – but it seems pretty obvious to me that it can’t be Ofsted.

***Reasons to be cheerful***

But it’s not all doom and gloom.

What I don’t think has been said enough over the last few months is that – actually – we have some brilliant childcare practice in England. 

We should be proud of that and be celebrating it. 

I’m sure you’ll be doing that here – and certainly at the awards ceremony tonight!

I’ve never seen a chaotic nursery, where children run around aimlessly – and I’ve been to a lot more nurseries than the Minister… England, anyway. She’ll beat me on France, granted. 

One of the best I’ve visited was the excellent Ducklings Day Nursery in Barnard Castle, run by Neil Butler, who I know is an active NDNA member, as well as being one of the relatively few number of male Early Years Professionals.

To be honest, I’ve rarely seen a toddler who hasn’t known exactly what their current aim is, and how they intend to achieve it!

What I’ve seen in the settings I’ve been to around the country are children able and encouraged to express themselves, to explore, to get wet or dirty, to try new things and develop their imaginations, and to build their communication and relationship skills, but with staff guiding that – tracking and encouraging development of skills.

What I’ve seen is staff who are highly motivated to build up their own qualifications and understanding of how best to support early learning and development, so that they can provide the best possible start for the children in their care.

And what I’ve seen is countless delighted parents, who love their childcare setting and their key worker because they can see how great a time their child has had, and they know that their child is getting something there that they can’t get at home.

Sometimes that’s a lot, sometimes it’s a little, but it’s always something.

Report after report puts paid to the myth that nurseries are damaging to children. 

Another one just last week from the Campaign for Social Science restated that.  

Parents can, and in the most part do, have a high level of confidence in their childcare provider, and that’s thanks to all of your hard work.

Of course there are issues to address and improvements to make.

And of course we don’t have excellent practice in enough settings. 

We won’t have excellent practice in enough settings until we have excellent practice in every setting.

We do need to carry on the improvements that we made to workforce qualifications, and I think this is something that the workforce would welcome.

But by and large we are in a good place compared to many other comparable countries, in spite of what you will read and hear elsewhere, and so a better approach to childcare reform is to build on that quality, not to undermine it.

***Labour’s plan***

So what would Labour do?

We need to look at two things.

Firstly, we need to look at what goes on here- in this country.

That means looking at what works well that should be built upon… 

…what works well in some areas and needs to be spread across the board…

…what doesn’t work well but could be improved… 

…and what needs to be dropped.

As I’ve said, I think the standard of practice in many settings is excellent, and we clearly need to work to ensure that more settings reach that standard, rather than diluting things like ratios which contribute to that high quality.

The local authority role works well in terms of quality improvement and sustainability in some areas but not others, and that needs to be worked on – but throwing the baby out with the bathwater is not the solution.

And clearly the funding system is on the borderline – it’s not working well at the moment, but can it be redeemed, or do we need to start again – no doubt creating a fair amount of chaos in doing so?

Your Business Performance Survey highlights the problem – 82% of settings say they don’t get enough for 3 and 4 year olds, and 41% for two year olds. 

Your report also makes some interesting recommendations to remedy this, including streamlining funding, and they will certainly be looked at in detail.

Then, when we’ve done that, we need to look abroad.

Not to cherry pick failed ideas from other countries just to fit our own ideology.

And certainly not to copy the kind of practice that Neil Leitch from the Pre School Learning Alliance saw in France.

Countries like Denmark have got far more to teach us. 

Countries where high quality and affordable early education isn’t just made a political priority when the PM’s polling tells him women don’t like him, but where it’s an ongoing and central national economic priority.

There are 10% more women in work in Denmark than in the UK.

Matching that would mean a million more British women in work, potentially bringing in over £4.5 billion in extra taxes every year.

And that’s not an abstract number – a report from the Women’s Business Council  a couple of weeks ago estimated nearly two and a half million more women want to work, and more than a million want to boost their hours.

So we need to understand how Denmark achieves that.

Of course, the availability of jobs that pay a meaningful wage can’t be overlooked, and that will be our number one priority in 2015.

But in terms of childcare, they achieve it by making sure that funding to providers is on a steady footing.

If we fail to learn these lessons, then initiatives such as Tax-Free Childcare, which I’m sure you’ve heard a lot about this morning, will just mean pouring more money into leaky buckets.

If hourly costs continue to rise, then the benefit of that £1,200 will be wiped out very quickly.

In fact, costs only have to rise 20% for that to be the case, and according to the Family and Childcare Trust’s surveys they’ve risen by almost that much since the election. 

So a more sustainable approach is needed, which means more sustainable businesses for PVI providers, allowing them to both keep costs down, but also invest in quality improvement, staff development and good facilities.

I think we also need to look at the role of employers in all of this – after all, they benefit greatly from affordable childcare, if only in terms of retaining experienced staff instead of losing them because they can’t afford to work.

We have many more family-friendly workplaces these days. 

Flexible working and maternity leave have improved. 

But also we have some employers providing on-site nurseries, or helping their employees – particularly those who work atypical hours – find childcare.

I want to see how we can develop that culture, and we are having those conversations at the moment with employers. 


And of course, we know that we need to arrive at our solutions by working with and listening to providers, not by ignoring them and doing the exact opposite of what they have advised us.  

Because ultimately, it is providers, and it is professionals, who we will rely upon to help us meet the objectives that we set, and deliver our offer to parents in 2015.

That’s the only way it can work.

Our Childcare Commission process isn’t a 44 day consultation over the summer holidays, after which we’ll say we’re going to do something that nobody asked for.

It’s an ongoing conversation – with parents, primarily, of course – but also with you, and with other providers, and with local authorities. 

I thank Purnima and her team for the engagement that they have had so far with that process, which I’m sure they’ll continue to do. 

We might not agree on everything, and given the financial situation we’re likely to be in in 2015, we’re unlikely to be able to throw lots of new money at old problems. 

And nor should we, until we’ve patched up those leaky buckets, or perhaps got some new, better ones! 

But we will ask for your opinion, we will listen to it, and we will base our new offer on it.

I might be here speaking to you today, but I’m actually more interested in learning from you.

You are already giving countless children a better future – helping put in place the foundations which will influence the adults they become and the course of their lives and ultimately their children’s lives.

And you’re already supporting countless families to find and stay in work.

I want to work together with you to give the best possible early education to more and more children, and help more and more parents to work to give them and their children a good standard of living and a better future.

That’s what we mean by a One Nation childcare system, and that’s what – with your help – we will create.

Thank you very much.

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