Many Scottish nurseries suffering real terms cut in ELC funding rates despite increased costs

Almost one in five Scottish local authorities will not be increasing their hourly early learning and childcare funding rates for three to five-year-old’s once the 1140 hours policy is mandatory from August.

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NDNA Scotland put out an FOI to all Scottish local authorities asking what they will be paying childcare providers for the 1140 hour places which must be in place from the autumn term. The National Standard will also be mandatory which means that providers must pay practitioners delivering the 1140 hour places the Living Wage.

Nine out of 32 councils have confirmed to National Day Nurseries Association (NDNA) Scotland that their hourly rates to providers will stay the same as the previous year, despite increased costs to keep nurseries Covid-safe and significant rises in minimum wages. For providers in these areas, this is a real terms reduction of their hourly rate.

Of the 32 local authorities:

  • 7 reported making no change to their hourly rate for either age group
  • 2 reported making no change to their three to five-year-old funding but Glasgow City Council has increased the two-year-old rate by 18% from £5.40 to £6.40
  • South Lanarkshire Council did not increase their three to five-year-old rate and are only funding two year olds in PVI nurseries this year
  • 1 local authority (Falkirk) has still to confirm their rates
  • The lowest rate for three to five year olds was in Perth and Kinross at £5.05
  • Moray Council pays £6.30 for three to five year olds which doesn’t include the meal allowance
  • The largest increase for three to five year olds was West Lothian up by 36% from £5 to £6.80 but this is due to the meal allowance being included in their hourly rate
  • Edinburgh reported the smallest increase for both twos and three to five year olds up by 2.07% from £5.31 to £5.42
  • The largest increase for two year olds was Shetland up by 55.67% from £4.68 to £7.13
  • Two further local authorities, the City of Aberdeen and Argyll & Bute, had only increased by 3% or less – (the City of Aberdeen by 2.63% £5.45 for three to five year old’s and Argyll & Bute 3% £5.47 for three to five and £6.18 for twos).

Many Scottish nurseries suffering real terms cut in ELC funding rates despite increased costs

NDNA Scotland funding rates 2019-20

2021 – No Local Authority (L/A) has indicated a decrease however the following information shows:

  • Orkney Islands – confirmed they have no PP nurseries.
  • South Lanarkshire – hourly rate inc. £0.50 per hour meal allowance
  • Stirling – do not offer places for two year olds in PVI nurseries
  • Falkirk – is the only L/A as yet (29/06/21) that hasn’t declared their hourly rate(s).

Since 2018, the Living Wage – which will be mandatory for settings delivering 1140 hours to children – has increased by 5% from £9 to £9.50. The National Living Wage – now for anyone over 23 years of age – has increased by 11% since 2018 from £7.83 to £8.72. Nurseries will still be paying this rate to practitioners who aren’t delivering the funded hours.

Nine local authorities have not changed their rate since we asked the question in March 2019. Some local authorities include the meal allowance in their rate, others do not.

Purnima Tanuku OBE, Chief Executive of NDNA Scotland, said: “It beggars belief that, despite every assurance made to the nursery sector, there is still almost a fifth of councils offering the same money as they did two years ago.

“Scottish Government promised that all local authorities would offer nurseries a sustainable rate with yearly uplifts to account for rising costs.

“This clearly is not being done in nine council areas and some local authorities such as Edinburgh are just not increasing their rates sufficiently to allow providers to be sustainable. Providers must also be able to invest in their quality of provision and many of the quoted rates do not allow for that.

“We also have a confusing picture when it comes to paying for children’s meals. Some local authorities give an additional meal allowance, whereas others include it in their base rate.

“Having access to high quality early learning and childcare is the biggest factor in reducing the inequality gap and ensuring children reach their potential. The hourly rates must reflect this.”

  • Scotland
  • childcare
  • Early Learning
  • Government underfunding
  • local authorities
  • Scotland
  • Scottish Government

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