Home > General Politics > Urgent: Anti-Progress volunteer(s) needed

Urgent: Anti-Progress volunteer(s) needed

This is my call for a London-based volunteer or two to attend this Progress meeting at 7.30pm [Edit: sorry, 6pm] tomorrow (Tuesday) 30th October in Westminster.

The meeting’s called Real choices for Labour: What would we give up to pay for universal childcare? and that pretty well tells you what the problem is.

The meeting will take as a given the idea that, if we are to achieve universal childcare (a good thing in itself), we’ll have to cut other stuff from the broad welfare budget.  This is wrong at several levels. 

First, even if the £6-7bn per annum needed to achieve universal care (actually I calculate it at less but let’s not quibble about that here) needed to be found from somewhere in government expenditure, that somewhere doesn’t have to be from welfare.  It could, just for example, come from Defence – you know, big rockets and stuff.   To suggest that child benefit etc. will have to be cut – as will be suggested tomorrow – is illogical even in terms of Ed Balls’ own commitment to a ‘zero-budgeting’ exercise.

Second, the meeting will seek to reaffirm the notion that it is now Labour policy NOT to deficit spend.  This needs to be challenged, especially in this area where we know that spending will lead directly not just to better early years development, but to economic growth.

Overall, the Left needs to challenge, at every opportunity, the idea that all policy will be costed within the austerity framework imposed by the Tories.  It’s not enough to be grumpy about it in the direction of Ed Miliband at big rallies; we need to stand up and be counted in meetings like this, where the policy decisions are ‘firmed up’, such that as we proceed towards 2015 those policies are increasingly presented as givens.

So who can make it? I won’t be there, as I can’t get down from Lancashire, but as an aid to people who can I am copying and pasting below my submission to Labour’s Childcare Commission (written as an email to Sharon Hodgson MP); this covers both some technicalities which will be covered tomorrow by the IPPR speaker (I had a small hand in their Double Dutch report), but also sets out in some more detail how Progress’s line – set out in the meeting title – must be contested (as well as offering a compromise solution).   Please see below.

My submission to Labour Childcare Commission

Dear Sharon

I am writing to you in respect of the Labour party childcare commission. I am a Labour party member/activist, previously labour leader on West Lancs Borough Council till my retirement from elected local government, and – more pertinently – a very hands-on Director of a childcare social enterprise in Lancashire (www.bickerstaffelodge.org). Oh, I also wrote that post at Though Cowards Flinch you retweeted, for which thanks.

I am sorry I was unable to attend the EIG fringe meeting that you spoke at at conference, but I did catch both Graeme Allen and Stephen Twigg’s views, so picked up a general sense of emerging policy around childcare, and how it might differ from the Conservative approach which – if Liz Truss’s recent ‘research’ is anything to go by, will NOT be helpful. On that basis, I wanted to make a few comments.

For completeness, I’m copying in Graeme Cooke at IPPR, whom I know you have met on this subject, and whom I met yesterday; Graeme will be publishing what amounts to a rubbishing of Truss’s ‘findings’ (though he is too polite to call it that) in a couple of weeks, and I’ve had the opportunity to make a few comments on the draft, which also includes so,e views on how childcare policy might be taken forward (by an incoming Labour government).  As an experienced practitioner, I agree with a great deal of what Graeme says in his report, and urge that it be considered a key document in your policy review.

My own comments, based on what I’ve heard this week at the Labour fringe, are as follows:

‘Red tape’

The emergent Truss idea (likely to emerge as policy soon) that the childcare industry is being stifled by ‘red tape’, and childcare will suddenly become affordable,  is nonsense.

There is a fairly general agreement amongst providers of all sizes – and this was expressed at the fringe event chaired by Graeme Allen – that firm regulation is still needed, including around adult: child ratios, not least because this is the main barrier to a race to the bottom in terms of quality, with the more unscrupulous providers, motivated by their Private Equity shareholders financial returns, leading the way on slashing prices, but slashing staffing and safety quicker.

There is one specific area of Ofsted ratio regulation, however, that does bear review, and this is also picked up very well in the forthcoming IPPR report. This is the difficulty providers have with the ‘bumps’ in the ratios, where different age groups need different adult: child ratios. This quite often leads to difficult decisions for providers over whether to provide extra staff in one age group where that extra demand takes you ‘over the limit’ for your current staffing, but not sufficiently to make it viable in its own terms, at least until other demand follows. This can lead to situations where parents do not get the hours they want and would pay, and nor do providers – a lose/lose situation. The obvious remedy is to smooth the bumps by having a common ratio for all ages, but backed by rigour in the quality assurance processes.

In general though, I would urge that the ‘red tape’ removal calls be discounted; some regulation is needed and welcomed by the industry, and while improvements are always welcome, it is not a major impediment to what we do.

OECD comparisons

The Truss report makes great play of OECD country comparisons, claiming that they show the UK offering poor value for money and thus backing her claim that slashing red tape expenditure will do the trick. This is mostly rubbish, and the IPPR does a good job demolishing it, but it is important to note that it is not just Truss who uses OECD data for dubious ends. Almost any report you care to mention on childcare in Europe provides the caveat that, because childcare means different things in different places etc., meaningful comparisons cannot be made, before going on to make just such comparisons…..

In particular, goes the claims, Finland/Denmark must be doing something remarkable (or the UK something very wrong) because they offer such high quality care at such reasonable cost while coming only a little above the UK in terms of value for money/unit cost etc.. This is doubtful, to say the least. The more prosaic reality, were it to be researched properly, would probably reveal that unit costs are as low as they are in Denmark/Finland because a lot of what counts to costs in the UK are quietly picked up by the state in those countries, and don’t appears as costs in the OECD data. Thus, while the UK nursery business pays a significant % of its overall expenditure out on property costs – both mortgages/rental and running costs, the % for same in Denmark/Finland are almost certainly much smaller.

Scale and location

One of the big issues affecting quality is the economies of scale needed to make childcare provision viable. It is pretty well-established that none of the larger providers will even look at taking on/creating provision in a setting below 50 places and at 50 places you’re talking of a total number of registered children well in excess of 100 for most providers. These settings are often being quality controlled by one or two staff with the necessary level of experience/quals in pre-foundation and foundation stage child development, and it is difficult to see how these staff can spread themselves this thin and still keep a wholly child-centered service intact (in terms of real quality as opposed to child file tick boxing). We wouldn’t expect a primary school teacher to oversee the meeting of individual development needs for 100+ children, even with the assistance of TAs, but that is effectively what is happening ion nurseries, with the issue only becoming more acute in the wake of reduced Ofsted requirements for level 3 coverage in settings.

The answer to the problem, I suggest – and I think this is central to what Labour should be doing with its proposed childcare reforms – must be around the support of smaller, more local nurseries. Put simply, a nursery where all children are properly known by the senior quality manager is likely to deliver higher quality care & education than a bigger one where such resources are stretched.

There is of course one other key reason for Labour to develop its childcare policies in a way which supports the financial sustainability of smaller settings. This is simply that large settings, of the type needed to achieve financial viability at the moment, won’t happened in small towns, villages, or distant edge-of-town estates, because there is not enough demand for that scale. I often feel that Labour’s previous childcare/Children Centre policy was overly city-centric, and it will be good if our new policies can be more open to the needs of where lots of millions of non-city people live. As rough guide to this, if nursery settings need, in order to survive to have more registrations than the number of children who progress onto the local primary school(s), then the supply side support policy is wrong.

Paying for it

While, I think Graeme’s IPPR report is great, and provides an excellent platform for an innovative Labour childcare policy, there is one area where I disagree fundamentally (in a friendly way). Graeme frames the whole report with his ‘In the Black Labour’ assumption that development of childcare can only happen if it is cost neutral to the public purse overall. I think this is not only wrong, but dangerous to the overall project, and it was very worrying to hear Stephen Twigg reflecting this thinking at conference, where he said Labour’s childcare policy “might not cost any more money” (indeed this could be read as even more restrictive than Graeme’s ‘it must come from other savings line’.

I certainly accept that transferring money from the tax credit system into more direct service provision might be more effective for provider cashflow and consequent sustainability, and there may be savings from reduced complexity in the tax system (though I think there’s a valid argument that any such savings should be redirected within HMRC so as to collect more tax!). There are other possible redirections of money to be made as well not mentioned in Graeme’s report but discussed with him e.g. phasing out Childcare Information Services, which are less useful in a Google age, and pushing that money into the development of local nursery trade associations concerned with quality devt etc..

But in the end, such savings and redirections will only scratch the surface. If Labour really is to commit itself to both increased provision and increased quality of provision (as it did in the late lamented 10 year childcare strategy in 2005, and as Prof Nutbrown now urges in the report ignored by Truss et al), then it is going to cost additional money. There is simply no evading that fact. Conversely, continuing to pretend that a paradigm shift in childcare and early years development can be achieved within current budgets is dishonest, and because it is dishonest, electorally disadvantageous.

My maths (which I won’t bore you with at the moment) is that in order to do what we need to do re: both coverage and quality of affordable childcare (let’s say 6 hours a day free for 46 week of the year with graduate level skills/employment moving towards 50% in five years), we need to find in the region of an extra £4-5bn a year. That’s a lot in itself though of course it remains tiny in the context of overall expenditure given its overall importance.

So how will the extra money be found? I’m a sensible post-Keynesian who enjoys the benefit of Modern Monetary Theory insight, and so I understand better than IPPR appear to that the best way to invest is through deficit spending. That would, well, just work.

Nevertheless, I appreciate that this is politically difficult, because Labour, with a little help from In the Black Labour, has boxed itself into a ‘fiscal credibility’ corner of its own making, and will be forced to ‘say where the money is coming from’ as the election approaches. Stupid to have done it, especially when Labour will be outflanked from the ‘economic left’ by a resurgent populist Tory party under a Gove/Truss combo, but it’s done now/for now.

Given this, the best way to release the investment needed may be through the financial engineering methods which have become known as social impact bonds (though they are not in fact bonds).

To create the narrative space for this, we need to talk in terms of childcare/early years as a vital ‘social infrastructure’ – as vital in its own way as the new bridges and rail lines that Osborne talks/talked of when he announce similar financial engineering plans last October, on the premise of pension fund/insurance fund buy-in (you will note that the planned £40bn investment in these schemes appears as distant as ever).

There isn’t space/time here to go into the full workings of how this act of Osborne rug-pulling might work, and further work will be needed, but surely the idea of funding long-term educational/employment outcomes from childcare/early years excellence, via Pension Fund backing and via the political consensus so lacking in Osborne’s plans (hence the lack of investment in his) must be attractive to both investor and investment recipient. Amongst Local Authority Pension Funds, for example, there is clear and increasing appetite to see its £140bn under investment used strategically, and a clear display of political will to ensure that the correct ‘dividends’ are paid back on the basis of lower welfare bills and remedial education savings, would move the debate on very quickly (see the Association of LA Pension Funds report released at conference for details of where they are now, and perhaps set up the right people to look into how the PF’s fiduciary responsibility (non)obstacle might be overcome/pushed to one side).

Conclusion

I’m pretty sure I’m teaching you to suck Grandma-eggs when I say that Labour’s childcare policy is one of the most vital bits of its post-2015 programme to get right, not just electorally but as a step forward for the country as a whole. It is not beyond the bounds of probability that within five years we can create an early years/childcare set up which matches Denmark’s, but we have to be brave in order to do so. If we don’t, and if we don’t commit to the immediate reversal/remedying of the deregulation plans that Truss will announce next month and implement within 12 months, we will have only ourselves to blame.

I have told the Tories much of what I’ve said to you, in my organisation’s response to their childcare commission. It’s here.

They will ignore it in favour of Truss’s Dutch imbecility. I hope you’ll listen.

I’m available if you want to meet, or want your officials to meet with me.

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Categories: General Politics
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  1. November 1, 2012 at 5:01 pm

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