Speech

Parents eligible for more than £8,000 in childcare support

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Childcare and Education Minister Sam Gyimah urges parents to check the support available for families to help with the cost of childcare.

Sam Gyimah

Thank you John [Bingham] for that very kind introduction - it’s a great pleasure to be here, kicking off what sounds like a really exciting day.

As a parent to a 6-month-old son myself, I’d love to stay and hear your speakers’ thoughts on innovation in the childcare sector but as I’m sure many of you will know so well yourselves, juggling work and family life can make for some very busy weeks!

And sometimes it can seem like these weeks are getting ever-more hectic. There are always more demands on our time - there’s always more to get done in the same number of hours.

And no wonder. There’s been a seismic shift in the way the family unit works over recent decades. There are 14.4 million women in work today - up 60% since the early 1970s. Around two-thirds of mothers in the UK now work.

And that means that dual-income couples are now the norm.

No-one could deny that this is a good thing for our economy, for the future of our country.

But it does mean there have been some pretty big changes in the way we care for our children.

With both parents working, and perhaps less able to rely on family and friends for support than in the past, I know that some families have found it a real challenge to get the right childcare provision for their children.

And believe me, as a new father, I’m coming to realise myself just how important that provision is!

Because with ever-increasing evidence about the impact early education can have on the rest of your child’s time at school, childcare is about much more than somewhere to leave your child where they’ll be safe and happy. It’s also about their development, and their future.

I’m speaking here to an audience of practitioners and providers, but I have no doubt that many of you will have your own children. So you’ll know exactly what parents are looking for when they consider you as their childcare option.

They’re looking for a safe and experienced pair of hands.

They’re looking for a provider that offers hours that work for them.

They’re looking for good value - childcare costs shouldn’t be a barrier to a parent returning to work, if that’s what’s best for their family.

So, I believe, there are 2 big questions here. What is the government doing to help hard-working parents, and how are we making sure that childcare provides the best value for money?

What money is the government providing to back up this plan?

This government is spending £5 billion - rising to £6 billion - a year on childcare over the course of this Parliament.

But our commitment doesn’t end there. We’re putting in even more money: almost another £1.5 billion to make sure that the families that need it most benefit from the government’s help to support their children.

These numbers are huge. And they prove that the childcare sector is - quite rightly - seeing a place in the forefront of the political arena that it hasn’t always benefitted from in the past.

What does our plan mean for parents and families?

But I know that for parents, it doesn’t matter that the government is pumping billions into the sector.

What matters are the childcare bills at the beginning of the month - what matters is the amount of money they have left over after paying for the essentials to enjoy life with their family.

That’s why I’m delighted to be able to say that, after years of ever-rising prices, the costs of childcare in England have stabilised for the first time in over a decade.

And there’s more support than ever before for parents.

The entitlement to free childcare for 3- and 4-year-olds has increased from 12-and-a-half hours a week to 15.

With government help, those families also eligible for funded childcare for their 2-year-olds save around £2,300 by getting the first 15 hours a week free, too.

And parents on working tax credits can also claim back against additional hours, saving them up to an additional £6,370 a year.

Of course, more and more people are choosing different forms of employment - not everyone works 9 to 5 for the same employer anymore. Plenty of parents choose to work independently, or to set up their own small business. That’s why we’re extending tax-free childcare to parents who are self-employed, or whose employers don’t offer employer-supported childcare.

So all of this means that there’s now near-universal provision for 3- and 4-year-olds. And, if parents decide working more hours is right for them, the government is putting in more money to make sure that working remains a viable option.

But what does this actually mean for an average family in England today? A working couple with one 3-year-old, earning a middle income, could be facing bills of £8,000 a year for childcare if they didn’t receive any help from the government.

I don’t know about you, but many parents in this situation would have to think very carefully about the possibility of them both going back to work, only for a huge chunk of their paycheques to disappear on childcare costs.

But, thanks to this government’s reforms, that same working family is currently entitled to 570 free hours of early education, covering almost a third of the 2,000 hours they would otherwise need to fund to work full time for the year.

And, when tax-free childcare is introduced in autumn 2015, the government will pay for a further 20% of childcare costs per child, capped at £2,000 a year, and benefiting 2 million families with children up to 12 years of age.

All of this means that the government is funding 43% of this family’s yearly childcare costs.

They’re almost 3-and-a-half grand better off with our support.

That’s a sizeable chunk towards a house deposit - it’s a new car, or it’s simply an extra few hundred pounds a month towards enjoying life.

For a working couple with one 3-year-old on a low income, support through working tax credits means the government is currently funding 79% of their childcare costs - that’s over £6,000 a year.

To those families who want to get on and work but worry that it doesn’t make financial sense for them, that’s a huge help. It’s a saving of over £500 every single month.

And, of course, the above figures would also apply to single parents working full-time.

But it won’t help families if we don’t get the message out there.

That’s why today marks the start of a major campaign by the Department for Education to do just that. By reaching out through Facebook, Twitter and family information services across the country, we’ll be showing parents exactly what government support for childcare means for them - the cash value of the hours their 2-, 3- and 4-year-olds get for free.

Setting the sector a challenge

So I know that some would say we’re not doing enough to help. Some would say we need to throw even more money at the sector, offer even more free hours to parents.

But I think we can all agree that £5 billion is a pretty substantial sum. And that at the moment we’re all having to work hard to make our money go further. So that’s where you, the providers, come in.

You’ll all have heard the naysayers - the ones who say week in, week out, that the sector is in crisis. That it’s crumbling under the pressure.

But I know that’s just not true. You’re already rising to the challenge of the massive social shift I mentioned earlier.

And put simply, the sector is thriving. There are more registered places in full-day care settings, more places in the most deprived areas.

And there aren’t many countries in which over 90% of 3- and 4-year-olds are enrolled in early education!

But I know it hasn’t always been easy so far. Many of you have told me that you’re having problems with funding, particularly around rates for free entitlement.

And lots of parents have told me that they’re still worrying about high costs, when all they should be worrying about is making the best choice for their child. It seems to me that the question isn’t about how much money we have, but how we use it. How we make it work for parents and providers.

For our part, we’re working hard to make the current system simpler and maximising the amount of money that actually reaches the front line.

We’ve protected the amount of funding local authorities receive for 2-, 3- and 4-year-olds in their area for the next financial year.

And we’ve recently published a benchmarking tool, allowing providers to see how early years funding works in their area; how much of this money their councils keep, and how much makes its way to providers, schools and - ultimately - children.

But I think that innovation has to be led by those that know the sector best. I urge all of you to ask yourselves, honestly, if there’s anything you could be doing differently, more innovatively, to make the funding you get go further.

We’re doing all we can to encourage enterprise and imagination - encouraging local authorities to be more flexible through our revised statutory guidance, issued a couple of months ago.

Already I know there are some superb examples of innovation across the country. A new nursery in Waltham Forest has found accommodation in previously run-down and unused community buildings. And they’re making extra money by letting out this space in the evenings and weekends to other local groups.

Parklands Day Nursery in Kirkby used a grant from their local authority to redesign their building space to create 24 new places for 2-year-olds.

But I want to see you go further.

I want parents across the country to make the right choices for their families without having to worry that the cost or availability of childcare provision in their area might be a problem.

I want you to consider offering wrap-around provision and holiday care - stepping up, with the support of your councils, to offer care for 50 or 51 weeks of the year, rather than just in term times.

I want you to work together with schools to offer parents joined-up support that will make their lives that bit easier.

Or perhaps, like we so often see in the private sector, coming up with new models that increase profits, but also work around parents’ changing lives, delivering real value for money. Like The Baby Drop, in Clapham, that allows parents to leave children for a short period of time, on a flexible basis, while they go to the gym, pop into the office or go food shopping.

In a nutshell, I want you to use the billions of pounds in the system to innovate, break new ground, do things differently. And offer parents care for their children that is affordable. Convenient. And above all, of a really high quality.

And I’ve got confidence that you can. Because when I look around the room today, I see a group of people - small business owners, entrepreneurs, people who are passionate about giving children the best possible start in life - all of whom have the skills and experience to think radically and raise the bar.

As I said in my speech to the Nursery World Conference just a couple of weeks ago, we all have a moral mission to get this right. And if government and the sector can work together, if we can use the money we have to provide pioneering new provision for children, if we can continue to save working families thousands of pounds every single year, then I know we can do it.

Thank you for everything that you do. Enjoy the rest of your day.

Published 25 November 2014