Most Scottish childcare providers getting raw deal from councils

The vast majority of local authorities are paying private providers a smaller proportion of their Early Learning and Childcare (ELC) budgets for the hours of funded ELC they are delivering.

Across Scotland, councils source an average of 28.3% of their funded hours from partner providers like private and voluntary nurseries or childminders. By contrast councils only allocated 22.8% of their ELC spending to this delivery. In total, 23 councils (79% of those we could analyse) are paying their private partner providers proportionally lower than the number of hours they are delivering.

The data and differential allocations was revealed through an investigation by National Day Nurseries Association Scotland which made Freedom of Information requests to all local authorities to ascertain what proportion of their total ELC hours was delivered by private, voluntary and independent providers (PVI).

The same request also asked what proportion of their ELC budget they paid to PVI providers.

The average gap between what was delivered and what was paid to providers across Scotland was 5.5%, but 13 of the 32 councils had a significant gap of over 5%. Renfrewshire reported the largest gap of 21.2%, followed by Glasgow City Council with a 15% difference and Moray with 14%. Seven councils had a gap of 10% or more between what they procured and the budget they allocated for this.

Purnima Tanuku OBE, Chief Executive of National Day Nurseries Association (NDNA) Scotland said: “Funded early learning and childcare is a key plank of the Scottish Government’s strategy for reducing poverty and improving children’s outcomes. The 1140 policy was supposed to ensure that funding follows the child but council data is showing that’s still not the case.

“Everyone knows that the costs of running a home and a business are still going up but childcare settings are seeing their funding squeezed. The rates they receive from councils are not keeping pace with their costs and the allocation of funding doesn’t always reflect the amount of hours being delivered by partner nurseries.

“The impact of this is huge. If private and voluntary run nurseries are not funded at a rate that allows them to pay their staff a competitive wage, they will continue to lose them to the public sector or they will leave to work in sectors like retail or hospitality.

“This risks undermining the Scottish Government’s offer and its principle of parental choice. For many working families, private and voluntary nurseries offer the flexibility that they need, opening for longer hours and all year round. Partner providers need councils to be paying genuinely sustainable rates to deliver 1140 hours, especially as the two-year-old offer is being extended.”

Four councils were paying providers more than the proportion of hours they delivered and one council had an even split between the two. Three councils did not fully answer both questions and it was not possible to analyse another one’s response.

NDNA Scotland put out their findings into funding rates across Scottish local authorities in August, discovering that only three local authorities had increased their hourly funding rate sufficiently to cover rising staffing costs. The Scottish Government published its Financial Sustainability Health Check of the Childcare Sector in Scotland in the summer, stating that providers costs were going up by 14% this year.

The investigation into proportion of delivered hours against proportion of budget discovered:

  • 23 councils have partner providers delivering a higher proportion of hours than ELC budget
  • Four councils are paying more as a proportion of ELC budget than hours provided by partners
  • Scottish Borders has equal proportions
  • The average gap where the council is paying more budget than hours is 2.20%
  • The average gap where the council is getting more hours than budget is 7.13%
  • 13 councils have a significantly higher gap (+5%)
  • Three councils Clackmannanshire, Fife and Midlothian did not fully answer both questions
  • It was not possible to analyse Comhairle Nan Eilean Siar’s response
  • Scotland

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