Disappointment as Scottish Budget fails to address funding system inequalities
The Scottish Government unveiled its pre-election budget with barely a mention for its Early Learning and Childcare 1140 hour policy.
Following enquiries from NDNA Scotland, the Scottish Government has confirmed an additional £11million each year from 2026-27 to support local authorities to set sustainable rates that enable staff delivering funded ELC in PVI sector to continue to be paid at least the Real Living Wage. This amount is on top of the £9.5 million funding uplift announced last year.
The sustainable rate would need to be increased significantly so providers can continue to pay their staff the Real Living Wage which rises by almost 7% from April to £13.45 an hour, along with other rising costs such as food and energy bills.
Finance Secretary Shona Robison included the following in her 2026-27 Budget Report:
“We continue to fund flexible and affordable childcare through our Early Adopter Communities, and our commitment to supporting the real Living Wage in private and voluntary sector ELC and children’s social care services.
“Our childcare provision will continue to support families both in and out of work. The 2026–27 Budget safeguards 1,140 hours of funded childcare for all three and four year olds and provides targeted support for eligible two year olds, ensuring help reaches those who need it most.
“The Budget honours the commitments made to support the local government pay deals (and) provides additional funding for the Real Living Wage in commissioned services across social care and childcare.”
Full details of the Budget are published here.
Tim McLachlan, Chief Executive of NDNA Scotland, said: “Fairness must be a cornerstone of the Scottish Government’s funded ELC policy. It was disappointing that once again, there were no announcements in the Budget that immediately address our concerns about underfunding and access to early learning and childcare.
“Sustainable rates must keep pace with rising costs to enable providers to pay staff the Real Living Wage, as well as cope with inflation-busting bills for consumables like food and energy.
“The Real Living Wage will rise by almost 7% from April to £13.45 an hour, so we will expect local authorities across Scotland to increase their rate to providers by at least this amount. This is the only way to ensure nurseries are not making a loss and can remain open to offer the places children and families need.
“The funded ELC policy in Scotland has given a lot of much-needed support to children. However, it doesn’t always work for families and providers. Parents in some local authorities also have their choices reduced by policies that limit new nurseries and funding for children from outside the local authority area. Alongside underfunding, these challenges in the current system should be addressed before any expanded promises are made to families.
“NDNA has been calling on the Scottish Government to ensure its policies are implemented fairly across all local authority areas and types of provider and to invest sufficiently to make sure the policy works for families, children and providers.”
In the debate following the budget announcement, Scottish Greens leader Gillian McKay expressed disappointment that the “postcode lottery of ELC was not being addressed”. Her party had called for an end to the policy of waiting until the term after a child’s third birthday before they can take up their funded place.
NDNA Scotland has previously responded to this call to say that the policy must be implemented fairly and in a way that works for families and providers, with sufficient investment so providers are not short changed.
Shona Robinson responded to Gillian McKay’s question, stating that they were not able to implement the Greens’ suggestion due to cost implications. The Government needed to undertake a wider review of delivery models to ensure there is more flexibility within the policy and to extract better value from their investment. This is a longer term issue for parliament to consider, she added.
NDNA has been advocating for a review of delivery models on behalf of members, so this is something we would welcome. We would want to see this translate into action as soon as possible to start addressing some of the issues with the policy delivery.
The Scottish Government ELC team has also confirmed that publication of the findings of the recent Sustainable Rate Review ELC Costs Survey by Diffley Partnership, and the resulting Sustainable Rates Guidance for 2026-27 will be published in early 2026.
You can watch the Budget event here.
- Scotland
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