Nurseries in Scotland provide around 60% of all the childcare in Scotland. This is fairly evenly split between the Local Authority and non-Local Authority sectors – 52% to 48% respectively.
Non-Local Authority settings – typically private, voluntary, and independent (PVI) nurseries, and childminders – provide the majority of care for those children under 4 years old (it’s around 55%), and a large majority of nursery care (87%) for children under 3. Close to all PVI nurseries are open all year round, compared to around a quarter of Local Authority nurseries.
Early years learning and childcare has never been properly funded – that was the case under the old system of 600 hours and it’s still the case now.
But, under the old system, PVI nurseries and childminders could charge a little extra for each additional hour of childcare out with the 600 hours. That little extra meant the low funding of the 600 hours could be managed – basically, the additional hours helped subsidise the 600 hours.
1,140 hours of funded childcare works out to just under 23 hours a week for a child in nursery for 50 weeks a year, and 30 hours a week for a child who is in nursery for term time only (38 weeks a year).
That means there’s fewer hours in a week for PVI nurseries and childminders to charge parents that little bit extra to make up for the low rate of funding.
That’s why many parents are seeing such a high jump in their wrap-around care fees. Nurseries are just having to make up the shortfall in funding from Government and Local Authorities.
That isn’t fair on parents, on their children, or on the nurseries.
Local Authorities (also known as Councils) appear to be giving more money to their own nurseries than they are to the private, voluntary, or independent (PVI) nurseries, or childminders, in their area. In technical terms, Local Authorities seem to be funding a higher rate per child per hour to their own nurseries than they are to their partner providers. You can ask us for more details on how this is calculated.
It’s also possible that Local Authorities are simply holding money back from the nursery system and using it for other things. We know of one Council which has been using the money meant for the day to day running of nurseries and childminders to fix budget blowouts as they build new nurseries. Based on 2021/22 funding rates, only 3 of the 32 Councils in Scotland look like they’re paying as much to the PVI nurseries in their area as they were to their own nurseries.
Currently, the Scottish Government funds each Local Authority an amount of money for all of the 1,140 hours of early years learning and childcare (ELC) which will be provided in their area. Local Authorities enter into contracts with nurseries in the private, voluntary, and independent sector, as well as childminders – what are called partner providers.
Local Authorities then choose an hourly rate they’ll pay those partner providers to deliver the 1,140 hours for each eligible child in their setting. The Scottish Government sets guidelines for Local Authorities to follow to work out how much to pay partner providers – but these are guidelines only. Ultimately, it’s up to each Local Authority to work out how much they’ll pay.
That’s right. Local Authorities have been put in a tough dilemma – they have to fund their own nurseries, as well as work out how much to pay to their partner providers. It’s just logical that a Council will make sure their own nurseries are properly funded, their staff are suitably paid, and the nursery facilities are kept in good shape, and then pay whatever is remaining to the partner providers. They shouldn’t be put in the position of being a provider themselves as well as a funder of partner providers.
Absolutely. Unlike homes, nurseries don’t have a price cap on energy prices – they’re paying full rates. And nursery owners are all mindful that their staff deserve decent wages – after all, it’s those staff who are providing the care for the children – so nurseries are always trying to pay not just minimum wage, but the real living wage. PVI nurseries do get funding to provide meals for the children, but this also hasn’t kept pace with the cost of providing the meals.
A Scottish Parliamentary Committee recently noted that PVI nurseries also generally face higher costs than Local Authority nurseries, because the private sector needs to pay for services that Council nurseries often get for free – cleaners, janitors, HR services, administration, legal advice, maintenance, rent…the list goes on.
It’s pretty simple – the Scottish Government should set a standard hourly rate for the 1,140 hours. Parents should then be able to nominate which provider will receive the funding for their child. The funding passes direct to that provider.
This system could be more tailored to the circumstances of the child as well – children from lower socio-economic areas can receive more funding, as can children in rural and remote areas. These are some of the factors that go into how much each Local Authority receives from the Government in the first place, so this new system would be much easier.
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