Labour leadership hopeful Yvette Cooper on the campaign trail. Photo: Getty Images
Show Hide image

Queen's Speech: lots of promises, but challenges ahead on childcare

Childcare is an sound investment: fund it now and we’ll see the benefits for years to come, in terms of rising levels of maternal employment with additional tax revenues, falling child poverty and improved child development outcomes. The rationale is simple; delivering the policy less so.

 

Yesterday’s Queen’s speech was not shy of commitments. Among them was doubling the free hours of childcare offered to parents of three and four year olds from 15 hours to 30 hours a week, from 2017. I doubt there will be much political argument over this particular announcement. Cross-party consensus is evidence of a shift in the policy debate. The Conservatives went further on childcare than Labour at the election, but now Yvette Cooper ha sannounced she would extend the free hours to two year olds if she wins the leadership contest. So we can truly say that childcare is no longer a yes or no policy debate -  the question now is not so much whether to improve the offer for families, but how to do so. 

Three things make this a big challenge. Firstly, it is an expansion of a system that is already struggling to meet demand. Most areas are currently under capacity for 15 hours, let alone 30, and it will be a considerable challenge for the childcaresector to increase its capacity. The sector will need sufficient funding for the hours it provides, and some providers would need up-front investment to expand their provision. The former is yet to be decided and latter is not on the table. 

Secondly, it is currently underfunded and cross-subsidised by top-up fees paid by parents. Part of the under-supply may be because the rates paid to providers are simply too low. The Government have committed to consulting with the sector on the appropriate rates. These need to increase to meet provider costs if this expansion is to succeed without a drop in quality and drastic market distortions.

This leads us on to the third challenge: funding this expansion without hurting other parts of the education system. At £350m, it is likely that the cost of this proposal has been significantly underestimated, even without taking into account the need to pay higher rates to providers. If this sum isn’t enough, funds will have to be found elsewhere. The last spending review ring-fenced schools but no other areas within education. This leads to difficult questions about where the money will come from in a zero sum game.

Back in 2013, Liz Truss, then childcare minister, proposed an increase in ratios of children to staff - allowing more children to be looked after by each nursery worker or child minder - but dropped the proposals after a resounding disapproval from the sector. It is possible that the new Government could try a similar move to keep costs down for this extended offer, but this would mean sacrificing the quality of childcare in order to provide the new offer. This in turn would reduce the chances of parents taking it up, increase the gap between state and private provision, and have particularly damaging impacts on the poorest children. 

This funding question is urgent in light of the forthcoming expansion, but even more so given that even if delivered this commitment will leave significant childcare needs unmet. Yvette Cooper is right - we should also go further by providing childcare support for two year olds. Rather than seeing childcare as a subsidy to parents, government’s focus should be on building institutions in communities that can support families. Growing childcare provision by direct funding ensures that nurseries can build a role as centres of community engagement and action, and offer wider support for families that need it.

There are other measures that should also come hand-in-hand if we want to boost maternal employment, such as protecting and extending parental leave, improving access to good quality flexible work and removing financial disincentives for second earners under the Universal Credit. The Government shouldn’t be anxious about adequately funding measures to support mothers to work. It pays dividends

Childcare is an sound investment: fund it now and we’ll see the benefits for years to come, in terms of rising levels of maternal employment with additional tax revenues, falling child poverty and improved child development outcomes. The rationale is simple; delivering the policy less so. With the PM making this a priority and the Childcare bill set to make it law, the childcare ministers are returning to a new set of challenges. Now they need to deliver. 

Giselle Cory is Senior Research Fellow at IPPR.

Giselle Cory is senior research and policy analyst at IPPR.

Getty
Show Hide image

Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

0800 7318496