Cameron’s childcare crunch is hitting family finances and the economy

Parents are struggling to cope with a triple whammy of rising nursery costs, plummeting childcare places and cuts to support. Labour is offering an alternative.

As a working mum myself, I know the impact of the cost of childcare on family budgets. New figures by the Labour Party released today underline the childcare crunch facing families. Already hit by a cost of living crisis of David Cameron’s making, mums and dads are struggling to cope with a triple whammy of rising nursery costs, plummeting childcare places and cuts to support through tax credits.

Under this government, parents have been hit by a nursery price hike of 30% since 2010 – five times faster than pay. The average bill for a part-time nursery place has rocketed to £107 per week, with parents working part-time on average wages having to work from Monday until Thursday before they pay their weekly childcare costs.

A crisis in childcare places is fuelling this rise in prices under Cameron and Clegg. Figures from Ofsted show that there are 35,000 fewer places since 2009. Many childcare providers are small businesses buffeted by the poor economic situation. David Cameron’s broken promises to back Sure Start meant that in many areas this vital service for children and families is withering away. There are 578 fewer children’s centres since May 2010, the equivalent of the loss of three centres a week.

The government are not just failing families on the childcare crunch; they’re failing the economy too. Fewer women with children in the UK work than in many of our leading competitor countries and a recent survey by Asda Mumdex found that 70% of stay at home mums said they would be worse off in the current climate if they worked because of the cost of childcare. The childcare crunch is trapping women at home who want to work and stifling their economic potential.

Labour is on the side of working parents. Today, Ed Miliband has reiterated our pledge to introduce a legal guarantee of access to wraparound care from 8am to 6pm at primary schools. By 2010, 99% of schools were providing access to before and after school childcare but David Cameron abandoned Labour’s extended schools programme and many parents face a logistical nightmare.

We will also extend free childcare for three and four year olds from 15 to 25 hours per week for working parents. The value of this extra childcare support is over £1,500 per child per year. The next Labour government will increase the bank levy rate to raise an extra £800m in order to meet the cost of this extra support for families.

The government has done nothing in this Parliament to help families with childcare costs. Labour’s bold new measures are a sign of intent. They will tackle the childcare crunch and make a difference for mums and dads.

David Cameron and Nick Clegg sit together as they visit the Wandsworth Day Nursery in London on March 19, 2013. Photograph: Getty Images.

Lucy Powell is MP for Manchester Central and Shadow Secretary of State for Education. 

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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