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Mrs. Maria Miller (Basingstoke) (Con): Before I contribute to this important debate, I wish to bring to the attention of the House that a long-standing member of the Public Accounts Committee, my hon. Friend the Member for South Norfolk (Mr. Bacon), has an important engagement on Saturday: to marry his fiancée Victoria. I would like to wish him every happiness.

The role of the PAC in holding the Government to account and recommending improvements to public services is truly unique and the ability of the Committee to put a spotlight on critical and topical issues is vital in the parliamentary process. We have heard a good deal about that today, but I wish to take it a bit further.

In many ways, I urge the Government to view the PAC as their own in-house management consultancy, something for which many outside organisations pay vast sums of money. Perhaps the Government already view the Committee in that way, which is why, as with management consultancies, many of the points that the Committee makes are not listened to as carefully as they should be.

My hon. Friend the Member for Gainsborough (Mr. Leigh) has said that over 90 per cent. of the recommendations made by the Committee are accepted. I would like to look at some of those that need to be put into action. My hon. Friend has said that the Committee does not take issue with the Government as to whether increases in expenditure are right; rather its remit is concerned with ensuring that massive increases in public expenditure actually count and are translated into a clear improvement in front-line services. We have heard as much today.

A number of the reports produced by the PAC undertake that task, and none more so than the report on early years and child care published in June 2004. In that report, the PAC considered in detail the Government's child care policies and strategy at that time. Government expenditure on child care is set to increase by 24 per cent. in the next three years, as the Secretary of State reminded us only too recently in the debate on the Childcare Bill. Over the past eight years, Government expenditure on child care has been £17 billion. The report highlighted that the Government need to tackle the problem of the long-term viability of the expansion of child care provision that they have funded. Significant increases in investment are planned into the future, and the Committee rightly concluded that it is vital to ensure that that money is spent effectively.
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Provision of child care plays an important part in both the social and economic future of our country. Affordable and flexible child care is one of the most important concerns for many families. It is only right that the Government should consider how more families can use good-value, good-quality child care. Two thirds of women who have children are in work, and half of all women who have children under the age of five are in work. The trend is for more mothers to be in work. We need robust policies on that, and it is of paramount importance to ensure that our child care strategy is viable in the long term.

The evidence taken by the PAC in its report highlighted that for every two new child care places opened in the past four years, one child care place has closed. In particular, closures of child minding places have increased significantly. When only 10 per cent. of the work force works from 9 to 5, however, child minding can often be the only source of child care that meets parents' needs. The Equal Opportunities Commission gave evidence to the PAC that highlighted stark uncertainties in the future for many of the new child care organisations operating in many parts of the country. It cited that 25 per cent. of all out-of-school clubs are making a loss, spiralling to two out of every three in more disadvantaged areas. That is not sustainable in the long term. That causes me concern, and from reading the report, it clearly concerns the PAC, too. The Committee also reviewed the National Audit Office report on child care, which shows that half the organisations that I have been talking about have made no plans to identify new funding streams for when their time-limited funding streams come to an end. That must be a cause of real concern.

While the Government have agreed with the PAC's findings and conclusion that more needs to be done to help to ensure the long-term viability of our child care, they have not done as much as they might to take those critical findings into account in practice. The Committee took important and informative evidence from the Sure Start unit and the Department for Education and Skills, which clearly stated that to be viable in the long term, child care organisations needed to operate at 80 per cent. occupancy rates—80 per cent. of all places filled with children. That would give them an opportunity to break even, and provide a sustainable future for our child care providers. I know from visiting child care providers in my constituency that that is a fair figure. In each year since the Committee's report was issued, however, the average occupancy rates for child care providers have fallen. That makes it increasingly difficult for providers to break even and to continue to offer those critical services in our communities.

Reports commissioned by Laing and Buisson show clearly that in January 2004 average occupancy rates in nurseries in the UK were 85 per cent. In January 2005, that had slipped to 83 per cent., and most recently, the same organisation found that in October 2005 the average occupancy rate in our nurseries had slipped below the magic figure of 80 per cent. to 76 per cent. As I have said, that level is cited by Sure Start as being below that which creates financial viability for those organisations.
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It is to be welcomed that child care in the UK has expanded. When I had to go into the marketplace after having my first child, I had enormous problems in accessing affordable child care. That problem continues to concern me and many of my constituents. However, we must look at the reality of the situation. The sector remains in a very difficult position. There is much uncertainty. Why are more of the new places not being taken up? Is it that they are not the places that people want? Is it the high cost? The cost of child care provision in this country remains among the highest in Europe. Much of the Government's strategy does not take into account the importance of informal, family-based child care, which makes up a large percentage of existing child care provision in the UK. Perhaps more needs to be done to examine that and to unpick why we are in a position that causes concern.

One thing that working families need is certainty about their child care support. I am sure that many hon. Members will know from first hand experience that that is vital. Whatever system is put forward, it has to have at its heart the ability to sustain provision in the long term. I endorse that conclusion in the PAC report. It is not desirable for parents or families to be uncertain about the future provision of child care. Whether it is a child minder, nursery or after-school club, parents need to be able to plan their lives and those of their children in the knowledge that it is good-quality child care provision.

My hon. Friend the Member for Gainsborough (Mr. Leigh) observed that the PAC's work is to ensure that massive increases in public expenditure actually count. In the child care sector, it is clear from the Committee's review of the facts, which was apolitical, as the Committee stressed, that the Government need to do more to review the action that is being taken. There are exciting plans under the Childcare Bill for children centres in every community. It is an enormous investment. There is a strong argument for some caution because quite large and fundamental concerns remain about the long-term viability of the Government's approach. When the market is still struggling to accommodate the Government's approach to funding, it is time for caution. Working better with existing child care providers has to be at the heart of our child care strategy. We need every pound invested to work hard to provide long-term solutions that count and give parents the certainty that I have talked about. The evidence in the PAC report suggests that a sizeable proportion of the provision is hanging on by its fingernails.

The Government need not just to listen and to accept the Committee's reports, as we heard earlier, but to do something about those findings and about the concerns that have been raised. The Childcare Bill is proceeding through the parliamentary process. Many of the points that I have made today were raised by other hon. Friends in debates. It is an important issue. A key element of the Bill is the new duty on local authorities to take steps to provide sufficient child care provision. That is an expansion of their responsibility in the sector at a particularly difficult time. Can we continue to allow one child care place to be lost for every two created? Existing providers must be able to plan for the future and the long-term financial success of their organisations. The continuing fall in occupancy rates perhaps hints that we
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have not got to the root of the problem of child care provision in terms of cost and the role of other family arrangements.

Some of those shortcomings could be helped by local government playing more of a role in determining child care. I acknowledge that. After all, it is much better placed to understand its communities. However, to reiterate the PAC's point about sustainability of provision, how sustainable is the role of local government in child care, given the fact that the Government will not provide any additional funding for that new and pivotal duty?

I applaud the work of the PAC in holding the Government to account and applaud the PAC's objective of ensuring that public expenditure counts. However, I call on the Government to do more than just accept the Committee's work and to take this opportunity to use the expertise of this group of people to improve all our services for the good of our community.

6.30 pm

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