Local Authority admit that ELC funding model isn’t fair on PVI providers

The Education, Children and Young People Committee met this week to discuss the funding for Early Learning and Childcare as part of their pre-budget scrutiny into the Early Learning and Childcare 1140 hours policy.

The most recent session, held on 25 October, took evidence from representatives from three local authorities on funding for early learning and childcare.

MSP’s asked questions about flexibility, capacity, sustainable funding rates, funding models, pay gaps between local authority and PVI staff and also other workforce issues such as recruitment and retention:

Willie Rennie, Member of the Scottish Parliament North East Fife, asked the council representatives: “if it is fair that PVI nurseries get paid so much less in wages than LA staff”. In response, one council officer agreed that this in fact “it wasn’t fair.”

Questions were also asked about additional funding for children with additional support needs and the conflict which arises from the local authority being both funder and competitor.

In response to council comments about market forces driving business Stephen Kerr MSP for Central Scotland said that it is not a fair market as Local Authorities are funders and competitors.

Bob Doris MSP for Glasgow Maryhill and Springburn asked if the councils are committed to reducing the pay gap between Local Authority and PVI, to which councils argued it is not all about money, it is also about the support given.

A Local Authority finance officer said that for equity the funding model will need to change. A point which NDNA have been repeatedly suggested.

Asked if a voucher system for parents would make a fairer funding model, council officers replied that Funding Follows the Child already offers this. Sue Webber MSP for Lothian disagreed with the statement, claiming that in her area “parents didn’t always have flexibility and choice”.

Jonathan Broadbery, NDNA’s Director of Policy and Communications, said: “Once again MSPs have heard evidence about the very real challenges in delivering the funded childcare policy and the unfairness in the system for partner providers like nurseries and childminders.

“Sustainable funding rates need to allow providers to recognise and reward their staff above the living wage as they are currently unable to compete with the salaries being offered in council run nurseries or other sectors.

“The clearest way of ensuring that funding truly follows the child would be a single online childcare account that would put choice firmly in the hands of parents. That would ensure all children are equally supported in this crucial stage of their development while simplifying the system for providers and local government.”

Evidence from this session will be taken alongside the evidence received in the previous two sessions to inform the pre-budget scrutiny.

NDNA previously gave evidence to the committee in May 2022, alongside other organisations including Early Years Scotland, Scottish Childminding Association. With the Scottish Government ELC Directorate giving evidence in a separate session.

Watch the complete session here.

  • Scotland

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