Scottish sector warns of funding gap

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The early years sector has warned that expanding the free entitlement in Scotland from 600 to 1,140 hours per year by 2020 will only work with adequate funding and resources.


First minister Nicola Sturgeon wants to introduce online childcare accounts, a plan supported by the NDNA

The early years sector has warned that expanding the free entitlement in Scotland from 600 to 1,140 hours per year by 2020 will only work with adequate funding and resources.

Responding to the Scottish Government’s consultation on the proposal, organisations and campaigners argued that for the expanded entitlement to be successful, funding, availability and the number of places will need to be increased.

The consultation – ‘A Blueprint for 2020: The Expansion of Early Learning and Childcare in Scotland’, sought views on funding models and the phasing in of provision. A Scottish Government response to the findings will be published in the spring.

Pilots of the 1,140 annual funded hours for three- and four-year-olds and vulnerable two-year-olds are currently under way in selected settings.

Within its response, the National Day Nurseries Association (NDNA) said nurseries will only be able to afford to deliver the extended hours if they are paid a ‘fair’ hourly rate, while Early Years Scotland (EYS) warned that if the 1,1,40 hours are funded at the current rate, many settings will be forced to close.

The NDNA’s own nursery survey last year showed that settings in Scotland had to cope with a ‘staggering’ shortfall in funding for the current free 600 annual hours. According to the survey findings, the average hourly rate paid per child was £3.56 in 2016, leaving settings with a shortfall of £1,128 per child per year.

The association said increasing funding would also mean more private and third-sector settings being able to deliver the free hours, increasing accessibility and flexibility – an area which is covered in the consultation.

At present, the majority of funded hours are only available at council-run settings, many of which offer just sessional care and are open term-time only. Private and third-sector nurseries can only deliver funded places if they are contracted by their local authority to do so.

Because of this, campaign group Fair Funding for Our Kids (FFFOK) says a large number of children are unable to take up the free hours. As such, it wants allocation ofplaces to be led by parental need and for local authorities to stop capping funded places at private and third-sector settings.


The consultation looks at a range of different funding models to best support the extended free provision, including funding that ‘follows the child’.

At the moment, funding for delivery of the current 600 free hours is included within the general revenue grant provided to local authorities. Local authorities then decide how best to allocate the funding to meet their statutory duties. They can offer funded places at their own settings or contract providers in the private and third sectors, referred to as ‘partner providers’.

Another proposal is to introduce online childcare accounts where parents and carers receive the funding, which they can spend at a provider of their choice. The idea is backed by the NDNA and the think-tank Reform Scotland.

Purnima Tanuku, chief executive of the NDNA, said, ‘We wholeheartedly support the proposal for new online childcare accounts as announced by First Minister Nicola Sturgeon in October, which NDNA originally suggested to the Scottish Commission for Childcare Reform. This would result in twin benefits of parents being able to pay their childcarer directly and, in turn, childcare providers receiving all the funding without any burdensome administration.’

A financial review carried out by the Scottish Government suggests that some local authorities have not spent the full amount of funding allocated to them on early years places. For this reason, FFFOK wants the funding to be ring-fenced.

However, the Convention of Scottish Local Authorities (COSLA), which represents 28 councils, says that introducing online accounts could further ‘skew’ where resources will be needed and would offer little capacity for forward planning of provision.


The consultation also considers how to make working in the sector more attractive, including paying Scotland’s voluntary Living Wage (which is more than the UK’s statutory National Living Wage).

While respondents backed the pay proposal, they reiterated that doing so would require additional funding for settings. COSLA warned that without a commitment to increase funding, local authorities may struggle to find sufficient providers that can deliver the 1,140 hours as well as pay staff Scotland’s Living Wage.

Other suggestions to make working in early years more attractive include getting schools and colleges to positively promote the sector through career guidance, and ensuring a range of opportunities for promotion and development are available.

Voice the union recommends a national and conditions framework for early years workers, which it says would help improve the perception of careers within the sector within society,

The consultation also asks whether the extended entitlement should be phased in. The NDNA proposes starting with 800 hours, while FFFOK says the Scottish Government needs to better deliver the current entitlement before extending it.

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