Private and voluntary nurseries expected to deliver more for less

Scottish private and independent nurseries are delivering almost a third of the country’s funded childcare places but councils are only allocating about a fifth of their budgets to pay for this.

National Day Nurseries Association (NDNA) Scotland put out a Freedom of Information (FOI) request to all Scottish local authorities asking what percentage of funded early learning and childcare (ELC) places for two, three and four-year-olds from August 21 to March 22 were delivered by “partner providers”. These include private and voluntary sector nurseries, playgroups and childminders.

Councils were then asked what proportion of their total ELC budget was used to procure these places.

On average councils reported that almost a third (30.2%) of their ELC delivery was through partner providers, rather than via council maintained nurseries, based on those who responded. However, they only spent an average of just over a fifth (21.5%) of their ELC budgets on these partner places. The average gap between the proportion of delivery and the allocation of budget was 8.1%.

But in some areas, the difference was significantly higher with East Lothian reporting a 16.5% gap, South Lanarkshire a difference of 15.4% and Moray 14.2%.

Purnima Tanuku OBE, Chief Executive of NDNA Scotland, said: “The data that councils have provided backs up what we have been saying since the childcare offer was expanded – funding does not fully follow the child. And for most settings, the ‘sustainable rates’ being paid do not cover the full costs of high quality early learning and childcare.

“Providers are being short changed and children are missing out where councils are dedicating a significantly lower proportion of their budget than the number of hours being delivered.

“The impact of this is that private and voluntary nurseries cannot compete with the salaries available to staff in council-run nurseries which is putting the sector under real pressure. With three in ten places for Scottish children relying on partner providers, councils should be supporting these settings, not undermining their funding.

“It isn’t right that children receive different levels of funding depending on where parents choose to send them. We need to see urgent changes if this policy is to be truly provider neutral, offer real parental choice and have funding follow each child.

“Introducing NDNA’s Childcare Passport, an online account for parents to pay whichever registered childcare setting they choose directly, would address a lot of these challenges.”

More than nine in ten local authorities responding (91.3%) admitted that the proportion of funded childcare places in partner settings was higher than the share of the budget used to pay for them. You can download the full table of responses below

Only two local authorities, Aberdeenshire (+1.6%) and East Renfrewshire (+3.2%) reported a positive gap, where they were allocating higher proportions of budget to partner providers than the percentage of hours being delivered.

Last summer, nine out of 32 councils confirmed to NDNA Scotland that their hourly rates to providers stayed the same as the previous year, despite significant increases in costs to partner providers such as rising inflation and minimum and living wage increases.

NDNA Scotland sent out the following Freedom of Information requests to all local authorities:

Q1) What percentage of 1140 hours delivery was through partner providers (excluding local authority settings) from Aug ’21-Mar ’22?

Q2)  What percentage of ELC budget (including 600/1140 hours) was used to fund partner providers (excluding local authority settings) from Aug ’21 – Mar ’22?

For the report, 23 out of 32 local authorities gave comparable responses.

ELC Funding FOI Request LA Table

Read about how local authorities must develop sustainable rates for providers.

Funding follows the Child and National Standard for ELC Providers: interim guidance – update

  • Scotland
  • ELC
  • funding
  • Funding follows the Child
  • local authority

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