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Willetts: Family Futures - Changing Families, Changing World

David Willetts, Shadow Secretary of State for Work and Pensions, sets out six key Conservative policies to help families with young children.

Thank you very much for the invitation to speak at this Conference today. The National Family and Parenting Institute has made a great contribution to thinking about the family and to understanding family change. There are many people in this hall today who have also made a significant personal contribution.

I am pleased to say that earlier this week Michael Howard made a change to the Shadow Cabinet which reflects the importance we place on policies relating to the family. He appointed my colleague Theresa May to a new post of Shadow Secretary of State for the Family. I am pleased that Theresa is with us today and she and I will be working closely together on family issues. We are both very keen to listen and learn from you.

We are already in touch with many of the organisations represented here. If we are not in touch already we would very much like to hear from you. You have a great contribution to make as we develop our policies. We want to listen. We want to learn.

We are especially focusing our efforts on developing policies that will help families with younger children. This is something we embark upon with humility, with care, and above all with an understanding of life as it is lived today in real families We all know that in real families there are to be found some of the deepest sources of human satisfaction. But yes, there is unhappiness and frustration too. People are under great pressure. We know that people are struggling with balancing commitments to children, to work, and of course to their partners. Sustaining a relationship, holding down a job, raising children, helping elderly parents - these are all big responsibilities and it is difficult to do it all. That is one reason why so many parents nowadays spend so much of their time feeling guilty. There is so much advice - indeed so much blame - that we are all terrified that we are getting it wrong. The last thing that families need is politicians adding to the a chorus of blame that has been heaped on Britain's families. Instead, we want to offer parents something very different - support and encouragement. They must be our watchwords.

It is now nearly twenty years since I first started thinking about family change and family policy. I freely admit that I have always been torn between two very different approaches. One approach is to focus on all the dramatic changes that are happening in the family. Women's opportunities for education and work have been transformed - though there is still more to do. Many more people cohabit. There are many more lone parents than there were. These are big changes.

But equally there are some deep things that stay pretty much the same. Most people still spend most of their lives in families headed by a married couple. The evidence is still that a healthy marriage is the best environment for bringing up children. But we mustn't be too prissy about this. I believe it was George Bernard Shaw who observed rather drily that 'morality is the trade unionism of the married'! Although we hear about the death of the family, the attitude surveys show that is far from the case. Just seven per cent agree that 'on the whole, my friends are more important to me than members of my family' with 76% disagreeing. Around 6 in 10 parents with a non-resident adult child see him or her at least once a week. And incidentally, the same survey showed 48% of people agreeing that people should always turn to their family before asking the state for help, and 29% disagreed. (Francis McGlone, Alison Park, Ceridwen Roberts, 'Kinship and Friendship: attitudes and behaviour in Britain 1986-1995). In fact I still think nothing beats the following description of English society:

'…rampant individuals, highly mobile both geographically and socially, economically "rational", market-oriented and acquisitive, ego-centred in kinship and social life."

That was from Alan Macfarlane's great account of early-mediaeval England.

Perhaps what has really happened is that we have added extra stages to the lifecycle. When we leave home it's no longer to get married but to live on your own, or cohabit. Most people do still get married but much later than in the 1960's and 1970's: in fact we are reverting to the pattern of the 1920's and 1930's. There is now a much longer period living on your own sadly after your partner dies. These are important stages of the lifecycle, to be respected in their own right. It doesn't mean that we have abandoned the ways in which we used to live.

I said earlier how my Party was committed to listening and learning from organisations represented in this room. But of course, above all, it is the views of the families themselves that matter. What they tell us is this:

· They want more affordable childcare

· They want more flexibility to balance work and family life.

· They don't want to be told - and especially not by politicians - how to run their lives.

· They don't, for example, want to be told to work when their children are young, though some wish to and others just feel they have to because they need the money.

· They don't want institutionalised care completely to displace all the informal arrangements that they are familiar with.

· They want to be free to choose, not to be supplicants for services - something that applies not just to childcare but to education and health as well.

Let me now turn to childcare in particular. Despite the fact that more public and private money is going into childcare than ever before, there is still deep dissatisfaction amongst many parents. It is partly the old problem of the gap between what politicians promise and the reality of people's lives. But that is not the whole story. Our analysis shows that there are deep problems, both with the flow of funds through to childcare, the demand side of the equation if you like, and also actually gearing up to deliver more childcare, the supply side of the equation. The flow of public money into childcare is far too complicated. And the people who provide childcare also find it difficult to increase their supply of it - because of problems ranging from the burden of regulation to the difficulties of recruiting suitable staff - that childcare is in little short of a crisis.

The statistics for support for all children under 8 but are flattered by the amount of support for children aged 5-8 on school premises. If instead one looks particularly at provision for the under 5's then the picture is much worse. Here, as the National Audit Office said in their recent report, demand far exceeds supply. As a result, the cost of a nursery place is rising much faster than inflation and now accounts for almost a quarter of the family's income. Indeed, one survey found that an average 90% of a mother's income when she went back to work was being spent on childcare. That is why many families are still deeply frustrated by what is little short of a continuing crisis in childcare. Perhaps now I can now outline some of the issues that we are focusing on as we try to tackle this problem.

Increase the Supply of Childcare

Most of the debate on childcare and families with children under 5 focuses on the demand side of the equation - how we put yet more money into the system. But unless we can increase the amount of childcare that is delivered, all that will mean is that prices continue to shoot up. So our starting point has to be how we can increase the supply of childcare. That is why we are looking at some of the obstacles that stand in the way of recruiting more quality staff or opening and extending new facilities. Here I must say I do believe we face a serious problem of excessive regulation. Of course we all understand the need to ensure decent standards. Just one case of an unsuitable person getting involved in childcare could destroy public confidence in the whole system. But there are obstacles in the way of delivering more childcare at affordable prices which we need to tackle. There is a distinctive Conservative agenda here. Are our current planning rules are serious obstacles to opening new facilities? What about VAT and the way it is levied? And are there too many regulatory bodies to deal with? I have been struck how OFSTED has done much better than many of us feared: so much so that now people are asking whether the whole process couldn't be simplified and all brought under the umbrella of OFSTED. Your advice and feedback will help us to develop a practical agenda of cutting the burden of regulation.

Simplify Funding Streams

Secondly, there are far too many different funding streams. We need to simplify them. I visited a Sure Start facility the other week and in the entrance there was one of those noticeboards with photographs of happy, smiling faces - and that wasn't the children, that was the staff working there! A great effort had been made to present it as a coherent and cohesive team. But if you asked about what was behind the posters then it was clear flow of funds to support it was like the plumbing in some Victorian country house. One person was financed out of a single regeneration budget and her funding came to an end next year. A second person was financed out of the Children's Fund but we all know that that is now in crisis. The local Social Services had chipped in. And there was some money from the Education Action Zone too. The Daycare Trust's invaluable guide lists all the possible sources of funding, calling it quite rightly, an A to Z - there is the Nursery Education Grant, Early Excellence Centres funding and Education Action Zones and Learning and Skills Council and NHS funding for new childcare places, Community Learning Chests etc. etc. In fact, the Daycare Trust identifies no fewer than 28 different funding streams for family related organisations. This is absurd. Indeed, it is worse than absurd. It means that there is an enormous division of effort as people spend all their time trying to stitch together different kind of funds, each with its own system of accountability and audit to help finance what you hope is one coherent organisation. That is why we are looking at whether there are ways in which we can simplify your funding arrangements.

Tackle the Bidding Culture

While we are still on funding there is something else that we are trying to do as well. The elaborate process of bidding for special projects is now completely out of control. There is so much bidding it is like the cacophony on the floor of a City trading room. I met someone recently who had a job that I had not come across before, a product of this extraordinary funding environment in which you all have to operate. He was a professional bid writer. His job was to write bids for funding for special projects to submit to all the different Whitehall departments and quangos that allocated funds. I asked him how he got on. He described his performance as if he were some hard-bitten gambler from Las Vegas. He said sometimes he had a good run when several of his bids would be successful in one month. Then he would have a bad patch when he was off form and his bids did not do so well. I asked him what was the special skill that he brought to help organisations submit their bids for money. He said that he spent so much of his time in meetings around Whitehall that he learnt the buzz words. He knew the right words to use for a bid to succeed. His task was to dress up what people wanted to do anyway in whatever was the language to present it as meeting the requirements of some specific funding or other.

This process has perverse effects. What it means, for example, is that there is endless support for new projects but it is very difficult to get support for existing projects. This is contributing to one of the big problems in the sector, the sheer rate of turnover. For example, 20% of After School Clubs fold after three years. I have in my constituency of Havant some of the most deprived wards in the South East of England. We have for quite a while a variety of schemes aimed at helping families with young children. Precisely because we have got the worst problems and have been trying to tackle them these schemes are not new. It is easier to get money for the most prosperous parts of Hampshire which haven't had schemes before than it is to sustain funding in the parts of Hampshire that need it most.

Do you know the worst feature of all of these arrangements? We are trying to help families who themselves often have turbulent, if not chaotic lives. All the evidence is that what children need above all as they grow up is security and continuity. That is surely what the framework of public policy and public financing should provide. But instead, we have created a system of funding that is a sort of ghastly caricature of the very turbulence that blights these children's lives. So let me offer you a possible Conservative slogan - not very snappy or sexy I am afraid - but here goes: "reliable core funding so that decent projects can carry on doing a good job."

A Fair Deal for Familes in the Middle

We are also looking at how funding can be distributed more fairly. Sure Start centres do of course tend to be located in the poorest parts of the country. That is perfectly understandable, though there are lots of poor people who don't live in poor areas. We will protect Sure Start. Private sector provision can be very expensive and only affluent families can afford the bills for a private nursery. But what that means is that you have got the poorest 20% of families helped by Sure Start and the most affluent 20% able to pay for full private provision, but it is all the families in the middle that are really losing out. We are looking at ways in which we can particularly encourage the spread of childcare that is affordable and can help families in the middle, and where possible, re-focus it by introducing more targeted support for parents of young children who are alienated and disruptive when they first appear at school. This is because our support for such parents (at first in pilot projects) will be funded out of, and as part of, Sure Start.

Help for Childminders

One attractive and obvious support for these families in the middle is childminders. There were 360,000 childminder places in 1997. That declined precipitately to 305,000 by 2001 so I am pleased that that decline has now been arrested with the number up to 317,000 by last year. But we need to look at ways in which childminding can expand further. One idea that has been put to us is that we should do something to tackle the rule that at the moment a childminder cannot claim the Childcare Tax Credit in respect of their own children. So if you have got two neighbours, they are financed for caring for each others' children but not for their own. One possibility would be to look at ways in which a childminder could claim the Child Tax Credit for bringing up their own children though this would have to have a condition that they had a certain number of other children in their care.

Reforming Tax Credits

That leads me into the whole vexed question of the tax credits. I understand that Gordon Brown has introduced all these tax credits with the best of intentions. He is sincere when he says he wants to tackle child poverty. But he does not exactly make things easy either for himself or for our families in the way in which he does it. In the past five years he has:

· abolished Family Credit

· introduced the Working Families' Tax Credit

· introduced the Disabled Person's Tax Credit

· introduced a Childcare Tax Credit

· introduced an Employment Credit

· abolished the Married Couple's Allowance

· introduced the Children's Tax Credit

· introduced a baby tax credit

· abolished the Working Families' Tax Credit

· abolished the Disabled Person's Tax Credit

· abolished the Children's Tax Credit

· abolished the baby tax credit

· introduced the Child Tax Credit

· abolished the Employment Credit

· introduced the Working Tax Credit.

So since 1999 the Government will have introduced five new tax credits for families, scrapped four of them and then introduced two new ones.

After all this change I don't think families could bear it if we said we were going to tear up the whole system and start again. We understand that people are desperate for some stability. But we are looking at ways in which some of the worst anomalies can be tackled.

I understand that Gordon Brown has taken families through all this from the highest possible motive. He wants to make work pay; he wants to boost the living standards of the poorest families; he wants to help low paid families with their childcare costs. These are all admirable objectives. But he hasn't half made heavy weather of implementing them. And trying to use the Inland Revenue has made life even more complicated. The Inland Revenue is designed to suck money out of us. Instead it has suddenly been told to blow money at us. No wonder the mechanism has suffered such judders and clanking as he has tried to change it from suck to blow. And it is families that are on the receiving end of all this. One adviser estimates that when it comes to helping a lone parent calculate whether he or she is better off out of work or in work, taking account of the Income Support, Housing Benefit, Council Tax Benefit, the Child Tax Credit and Children's Tax Credit, not to mention tax and National Insurance, then the whole process takes between two and three hours.

We have recently seen a big increase in Childcare Tax Credit and I am very keen to hear from you how it is working. Are the funds getting to you reliably - one of the main problems with the Childcare Tax Credit in the past? Is there a serious problem of fraud? The Tax Credit is supposed to cover childcare costs but not early years education. Is this a distinction that you can make in practice, especially when we are all so keen to see some educational element in childcare if at all possible? Are there better ways in which this money can be used to help families with their costs?

There are other problems with the tax credits as well. They are biased against one earner couples and appear to be constructed on the assumption that parents with young children ought to be going out to work. So they favour two earner couples and working lone parents over one earner couples. They also favour institutionalised and formal arrangements over informal childcare that many parents would prefer. We need to tackle this bias, to have a system that matches more comfortably and more easily that real families make. This is something else that we are keen to try to tackle.

Behind all that, perhaps the most ambitious aim of all was set out in what Michael Howard was saying only on Tuesday. He was talking about the importance of choice and empowering the users of public services. Surely the best possible way of helping families with children is surely to treat them as adults able to take big decisions about the healthcare or education of their children. That will be at the heart of our agenda.

CONCLUSION

I hope what I have set out today gives you some useful indicators of my Party's approach to the theme of this Conference - 'Changing Families in a Changing World.' In particular I have tried to set out six key themes to our policies.

· First, we want to remove the obstacles to supplying more childcare. This is why parents struggle to find suitable childcare for their children and are all too often shocked by its cost.

· Secondly, we want to simplify the 26 different funding streams going to childcare providers so that they are freed from the complexity of accounting and auditing to so many different bodies.

· Thirdly, we want to reverse the spread of the bidding culture so that there is more reliable core funding for decent projects.

· Fourth, we want to tackle the polarisation that is now taking place, with Sure Start for the poorest families, expensive private provision for the richest families, and much less for the many families who are in the middle.

· Fifth, we are concerned about the fall in the number of childminders since 1997 and are looking at ways in which we can encourage more people to take this on.

· Sixth, we will not abolish the Tax Credits but we are looking at ways in which they can be reformed and improved, including the Childcare Tax Credit.

There is still a lot of work to be done to develop these policies further but we are making progress, and with your advice and assistance I am sure that we can get it right.

Many thanks.

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