The coalition still isn't rising to the challenge on affordable childcare

The changes announced today by Liz Truss are unlikely to significantly reduce costs, boost quality or widen access to early years provision.

You might have missed it, but today Liz Truss published the latest instalment in the government’s early years reform plans. More Affordable Childcare is the culmination of the government’s commission on childcare. The looming summer holidays might be a delight for kids, but many working parents will be put under huge pressure by the childcare costs that go with it. The need to bring down the price is urgent.

This year, for the first time, the average cost of holiday childcare per child per week has now topped the hundred pound mark. Childcare inflation marches on, far above salary increases, squeezing family budgets. With the average couple spending over a quarter of their net income on care, England is one of the most expensive countries for parents needing childcare.

The government hasn't gone far enough to meet the challenge. Today’s publication, following a year long commission on the early years, doesn’t really provide any new approaches to reform. Most of the changes announced are unlikely to substantially reduce costs, boost quality or widen access to early years provision.

The best news from today’s publication is extending the free entitlement for 2 year olds from the most deprived 20 to 40 per cent. This is good news, but old news – restating what was already pledged by the government. Nevertheless, this is an important step forwards, and should have a positive impact for families. Another good measure is increasing funding for out-of-hours care in schools clubs. But this, in essence, is bringing back a weakened version of Labour’s Extended Schools funding, which was previously scrapped by the coalition.

The other announcements tinker at the margins. Cutting red tape is unlikely to lead to parents seeing real savings in their childcare bills. And new IPPR research shows that introducing childminder agencies could lead to costs actually increasing for parents (as well as potentially undermining quality).

Another bad move is leaving Ofsted as the sole arbiter of quality, and giving settings the automatic right to deliver the free entitlement if they receive a 'good' or 'outstanding' score. The Daycare Trust recently crunched the numbers and demonstrated that Ofsted isn’t always a reliable judge of quality. Particularly in the case of the under-3s, Ofsted scores failed to reflect which settings were best for children’s development. While high quality childcare is good for children, low quality can actually be detrimental.

There needs to be some new, bold thinking. There’s agreement that getting high quality early years care is important and yields dividends for children, parents and society. But both More Great Childcare and More Affordable Childcare fail to rise to the scale of the challenge.

On cost, the government should look seriously at supply-side funding. There are warnings from other countries, that investing in demand-side funding can lead to spiralling inflation and a system that costs more for everyone.

On quality, the government needs to go further. Our polling, and public responses to reform proposals, show there’s real appetite in the sector for driving up quality and status. We believe there should be a minimum requirement of having or working towards a relevant level 3 qualifications for all professionals delivering the Early Years Foundation Stage. The government should also bring back the successful Graduate Leader Fund to keep driving highly qualified staff. More graduates means more centres are able to look after more three and four year olds at any one time. This could cut costs for parents, without being detrimental to children’s development.

David Cameron and Nick Clegg sit together as they visit the Wandsworth Day Nursery in London on March 19, 2013. Photograph: Getty Images.
Chuka Umunna speaks at the launch of Labour's education manifesto during the general election. Photograph: Getty Images.
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After so badly misjudging the leadership contest, how will the Blairites handle Corbyn?

The left-winger's opponents are divided between conciliation and aggression. 

When Labour lost the general election in May, the party’s modernisers sensed an opportunity. Ed Miliband, one of the most left-wing members of the shadow cabinet, had been unambiguously rejected and the Tories had achieved their first majority in 23 years. More than any other section of the party, the Blairites could claim to have foreseen such an outcome. Surely the pendulum would swing their way?

Yet now, as Labour’s leadership contest reaches its denouement, those on the right are asking themselves how they misjudged the landscape so badly. Their chosen candidate, Liz Kendall, is expected to finish a poor fourth and the party is poised to elect Jeremy Corbyn, the most left-wing leader in its 115-year history. For a faction that never ceases to underline the importance of winning elections, it will be a humbling result.

Though the crash has been sudden, the Blairites have long been in decline. Gordon Brown won the leadership unchallenged and senior figures such as John Reid, James Purnell and Alan Milburn chose to depart from the stage rather than fight on. In 2010, David Miliband, the front-runner in the leadership election, lost to his brother after stubbornly refusing to distance himself from the Iraq war and alienating undecided MPs with his imperiousness.

When the younger Miliband lost, the modernisers moved fast – too fast. “They’re behaving like family members taking jewellery off a corpse,” a rival campaign source told me on 9 May. Many Labour supporters agreed. The rush of op-eds and media interviews antagonised a membership that wanted to grieve in peace. The modernising contenders – Chuka Umunna, Liz Kendall, Mary Creagh, Tristram Hunt – gave the impression that the Blairites wanted to drown out all other voices. “It was a huge mistake for so many players from that wing of the party to be put into the field,” a shadow cabinet minister told me. “In 1994, forces from the soft left to the modernising right united around Tony Blair. The lesson is never again can we have multiple candidates.”

While conducting their post-mortem, the Blairites are grappling with the question of how to handle Corbyn. For some, the answer is simple. “There shouldn’t be an accommodation with Corbyn,” John McTernan, Blair’s former director of political operations, told me. “Corbyn is a disaster and he should be allowed to be his own disaster.” But most now adopt a more conciliatory tone. John Woodcock, the chair of Progress, told me: “If he wins, he will be the democratically elected leader and I don’t think there will be any serious attempt to actually depose him or to make it impossible for him to lead.”

Umunna, who earlier rebuked his party for “behaving like a petulant child”, has emphasised that MPs “must accept the result of our contest when it comes and support our new leader in developing an agenda that can return Labour to office”. The shadow business secretary even suggests that he would be prepared to discuss serving in Corbyn’s shadow cabinet if he changed his stances on issues such as nuclear disarmament, Nato, the EU and taxation. Were Umunna, a former leadership contender, to adopt a policy of aggression, he would risk being blamed should Corbyn fail.

Suggestions that the new parliamentary group Labour for the Common Good represents “the resistance” are therefore derided by those close to it. The organisation, which was launched by Umunna and Hunt before Corbyn’s surge, is aimed instead at ensuring the intellectual renewal that modernisers acknowledge has been absent since 2007. It will also try to unite the party’s disparate mainstream factions: the Blairites, the Brownites, the soft left, the old right and Blue Labour. The ascent of Corbyn, who has the declared support of just 15 MPs (6.5 per cent of the party), has persuaded many that they cannot afford the narcissism of small differences. “We need to start working together and not knocking lumps out of each other,” Woodcock says. There will be no defections, no SDP Mk II. “Jeremy’s supporters really underestimate how Labour to the core the modernisers are,” Pat McFadden, the shadow Europe minister, told me.

Although they will not change their party, the Blairites are also not prepared to change their views. “Those of us on this side of Labour are always accused of being willing to sell out for power,” a senior moderniser told me. “Well, we do have political principles and they’re not up for bartering.” He continued: “Jeremy Corbyn is not a moderate . . .
He’s an unreconstructed Bennite who regards the British army as morally equivalent to the IRA. I’m not working with that.”

Most MPs believe that Corbyn will fail but they are divided on when. McFadden has predicted that the left-winger “may even get a poll bounce in the short term, because he’s new and thinking differently”. A member of the shadow cabinet suggested that Labour could eventually fall to as low as 15 per cent in the polls and lose hundreds of councillors.

The challenge for the Blairites is to reboot themselves in time to appear to be an attractive alternative if and when Corbyn falters. Some draw hope from the performance of Tessa Jowell, who they still believe will win the London mayoral selection. “I’ve spoken to people who are voting enthusiastically both for Jeremy and for Tessa,” Wes Streeting, the newly elected MP for Ilford North, said. “They have both run very optimistic, hopeful, positive campaigns.”

But if Corbyn falls, it does not follow that the modernisers will rise. “The question is: how do we stop it happening again if he does go?” a senior frontbencher said. “He’s got no interest or incentive to change the voting method. We could lose nurse and end up with something worse.” If the road back to power is long for Labour, it is longest of all for the Blairites. 

George Eaton is political editor of the New Statesman.

This article first appeared in the 03 September 2015 issue of the New Statesman, Pope of the masses