Nurseries in 12 Scottish council areas don’t know their funding rate  

Nurseries across Scotland were promised an uplift in Early Learning and Childcare funding from the beginning of April and yet those in 38% of council areas still don’t know what they will receive.

According to analysis by National Day Nurseries Association (NDNA) Scotland which looked into data they had requested via the Freedom of Information Act (FOI) request, 12 local authorities out of 31 who responded had still not decided what the April funding rate will be. Shetland has not yet responded to the FOI request.

From April 2024, Early Learning and Childcare providers should be paying their staff at least £12 an hour. This pledge was made in September by then First Minister Humza Yousaf MSP with the Scottish Government committing £16 million to ensure this was fully funded. However, the announcement was then overtaken by the Real Living Wage increasing to £12 per hour. Providers must commit to pay at least the Real Living Wage under the National Standard for funded ELC, making it a legal requirement.

A total of sixteen local authorities reported giving providers at least a 7.6% uplift. This has been calculated by Scottish Government as the minimum requirement to support providers to be able to pay their staff the £12 pledge. The increases range from 7.6% in 11 council areas to 12.6% for two-year old places in Falkirk and an 11.1% increase for three and four year-old rates in Highlands. 

Two councils – Edinburgh and Moray – are paying providers a much lower increase, 4.8% and 4.2% respectively. Both have said they will look at whether they can increase this to 7.6% later this year. Shetland has not responded to date. Orkney has given a rate but don’t have any private partner providers.

Where providers have not had their rates confirmed or are receiving increases below the 7.6% increase this is putting additional financial pressures on them where they meet their legal duties but the sustainable rates they receive are below their cost increases.

Purnima Tanuku OBE, Chief Executive of National Day Nurseries Association (NDNA) said: “The Scottish Government announced that local authorities needed to give providers an uplift of at least 7.6% in their funding rates so they can pay their staff the new Real Living Wage. Yet when we looked into what was happening in each local authority area, we discovered a postcode lottery with nurseries in a third of council areas still unsure of what they will be paid.

“Nurseries and other ELC providers are legally bound to pay their staff the Real Living Wage and therefore councils must honour this commitment by increasing the rate they pay them to deliver funded places. Any council not doing this risks undermining the National Standard and puts settings at risk.

“Some local authorities, particularly the five councils who have increased the rate above the recommended 7.6%, are making positive decisions to support settings which will be a big help to their sustainability.

“The two councils who are giving a less than 5% increase to their providers need to urgently look at these decisions. Nurseries began paying their staff £12 per hour from April. This money must be backdated but also needs to reach providers now otherwise they will suffer serious cash flow problems.

“It’s vital that councils don’t treat this uplift as a ‘one-off’ payment but make sure rates increase regularly in line with minimum wages and other rising costs.”

NDNA and MSPs on the Scottish Parliament’s Education, Children and Young People’s Committee have been highlighting the pay gap between the private and voluntary sector and the rates paid in local authority settings. While welcome, the pledge to pay staff £12 does not fully close the gap.

The analysis of funding rate uplifts found the following:

  • Average increase for two-year-olds was 8%
  • Average increase for three to five-year-olds was 7.8%
  • Range of increases were from 4.2% to 12.6%
  • Out of 32 LAs, 16 have increased their uplift by 7.6% or more.
  • 2 have confirmed their uplift will be below the 7.6%.
  • 12 are yet to decide (or confirm) what their uplift will be.
  • Shetland is currently outstanding. 
  • Orkney confirmed they don’t have any Partner Providers

Download the summary spreadsheet with the analysis on here

  • Scotland

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