The National Day Nurseries (NDNA) has raised concern that PVI settings won’t be able to offer places with this rate of funding as partner providers will be required to pay staff the Scottish Living wage, set at £9 per hour, from next year, as well as provide children with a free hot meal.
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Around a third of councils responded to the FOI, disclosing their hourly rates for the funded places for three- and four-year-olds for 2019-2020. The 1,140 hours will be rolled out across the whole country by August 2020.
The majority revealed they are setting a rate of £5.31, including rural areas such as Argyll and Bute. Urban areas such as Glasgow are paying slightly more with a proposed rate of £5.41. Three councils are planning to pay providers lower than this rate to offer the current 600 hours of Early Learning and Childcare.
East Ayrshire is giving the highest rate at £5.50, while the Shetland Islands will pay the lowest £4.58 per hour, per child.
As per the responses, the average rate being paid by Scottish local authorities is £5.26 so far.
Some councils that responded have yet to set their rate for the next financial year.
NDNA’s chief executive Purnima Tanuku said, ‘The rates we have been given so far are still insufficient for providers to be able to offer high-quality early learning and childcare.'
She suggested that rates reflect findings of a financial review conducted in 2016, which suggested £5.31 would be a fair national rate. The review was based on costings from three years ago on delivering 600 hours of funded childcare.
Ms Tanuku said, ‘Since 2016, all operational costs have increased, especially minimum wages which have gone up by 20 per cent for the over 25s since 2015.’
‘In delivering almost double the amount of funded hours, partner nurseries will have much less access to other income to off-set any underfunding.
She added, ‘Our members are telling us that those involved in phasing in the 1,140 hours will not be able to pay the Scottish Living Wage, which continues to rise, on these suggested funding rates.
‘If they can’t afford to offer funded places, this will reduce parental choice which is at the heart of this childcare policy.’
Ms Tanuku said they are meeting with ministers and member this week to discuss these concerns and whether there will be a separate pot of funding to cover meals.
Scottish Government response
However, the Scottish Government claimed that the information shows a significant increase in hourly funding rates.
Minister for children and young people Maree Todd said, ‘This information shows a significant increase in hourly funding rates for private and third sector providers delivering the early learning and childcare (ELC) entitlement across Scotland.
‘Through our significant investment in ELC expansion, we have already seen a number of local authorities increase rates paid to nurseries to over £5.00 per hour, which in some parts of Scotland reflects a more than 50 per cent increase on current rates. We expect more authorities to confirm increases to rates as they introduce the increase in funded hours between now and August 2020.
‘We are working with local authorities and providers to deliver the increase in funded hours, providing support through the 100 per cent business rates relief for day nurseries and have established the ELC Partnership Forum, which the NDNA is a member of.’