Scotland: Nurseries and childminders face stagnant funding rates, FOI reveals

This is despite increased costs to keep settings Covid safe and rises in minimum wage, leaving many settings suffering real terms cuts.

Under the policy all staff in settings delivering the 1,140 hours must be paid the Living Wage, set at £9.50 per hour.

National Day Nurseries Association (NDNA) Scotland put out the Freedom of Information (FOI) request to all Scottish local authorities, asking what they would be paying childcare providers to deliver the extended entitlement from August (autumn term).

It has raised concerns over the sustainability of settings in areas where funding rates will remain the same, or are only marginally increasing.

The move from 600 to 1,140 hours of funded childcare, for three- to- five-year-olds and eligible two-year-olds, was delayed by a year in Scotland due to the Coronavirus pandemic. Originally the policy, which entitles children taking up a place to a free meal, was due to be rolled out across the country by August 2020.

Findings

Nine out of 32 councils confirmed to NDNA Scotland that their hourly rates to providers will stay the same as the previous year. For providers in these areas, this is a real terms reduction of their hourly rate.

A total of 11 councils revealed they are increasing both their two-year-old and three- to- five-year-old funding rates to deliver the 1,140 hour places. However, NDNA Scotland has said that in some of these areas the funding rise isn’t enough.

The largest increase for three- to- five-year-olds is in West Lothian - up from £5 to £6.80 per hour - but this is due to due to the meal allowance being included in the rate.

Some local authorities include the meal allowance in their rate, others do not.

Perth & Kinross is only increasing its three- to- five-year-old rate, while in Glasgow City, providers will see a rise to their two-year-old funding just for the extended entitlement.

Edinburgh reported the smallest increase for both age groups, from £5.31 to £5.42

Comments

Purnima Tanuku, chief executive of NDNA Scotland, said, ‘It beggars belief that, despite every assurance made to the nursery sector, there are 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.’

Scottish Liberal Democrat education spokesperson Beatrice Wishart MSP said, 'We have consistently sought to hold the Scottish Government's feet to the fire and ensure that the ambition behind the 1,140 hours policy is delivered.

'However these figures show local authorities are in a real bind. While some have committed to real terms increases to support nurseries to deliver, others are effectively imposing cuts.

'Throughout this process my party has argued that the support for parents and children must offer flexibility and choice. That goal will never be achieved if nurseries close their doors because they can’t secure funding.'

A Scottish Government spokesperson said, 'The Scottish Government and COSLA have a multi-year funding agreement that enables local authorities to pay sustainable rates to childcare providers in the private, third and childminding sectors to deliver early learning and childcare. This should reflect the cost of delivery and enable the payment of the real Living Wage to childcare workers delivering early learning and childcare.

'We are currently progressing a Financial Sustainability Health Check of the sector and gathering evidence of the impact of Covid-19 on the sustainability of all types of childcare providers. We will set out the findings this summer which will help inform decisions regarding any potential further support needed including any changes to the guidance on setting sustainable rates.'