Education and Skills Committee

Meeting date: Wednesday, December 9, 2020

Official Report 569KB pdf

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Funded Childcare

Agenda item 4 is an evidence session on funded childcare. We are joined by Maree Todd, Minister for Children and Young People, and from the Scottish Government Alison Cumming, interim director for early learning and childcare, and Simon Mair, head of delivery assurance.

Earlier this morning, the committee held a focus group with childcare providers. I place on record our thanks to those who attended to help inform this evidence session. I also thank all those parents and carers who took part in our online engagement on funded childcare. Their contributions are included in the papers for the meeting.

I invite the minister to make a brief opening statement.

We want Scotland to be the best place in the world to grow up in. We know that high-quality early learning and childcare has the power to enable that and to transform lives.

Back in March, in partnership with local government, I took the difficult decision to pause the programme of expanding childcare to 1,140 hours a year in order to allow local authorities to focus on our immediate response to the coronavirus pandemic. That decision recognised that key elements of the expansion programme could not proceed in the face of a global pandemic: construction activity ceased almost completely for four months, and training provision and recruitment activity could no longer take place face to face.

Nevertheless, throughout the Covid-19 pandemic, local authorities and early learning and childcare providers have continued working hard to progress the expansion and to ensure that as many families as possible can benefit from increased hours of funded ELC ahead of the statutory implementation date. Work continued to secure the required workforce and capital programmes were rephased when construction activity resumed after lockdown.

As a result, 14 councils are already delivering the expanded 1,140 hours offer in full, with all other councils offering more than the statutory entitlement of 600 hours to some or all families. Our most recent data, collected in August, found that more than 80 per cent of children in funded ELC were receiving more than 600 hours of funded ELC and that 61 per cent of those—more than 56,000 children—were already receiving 1,140 hours. Even more children will now be benefiting from expanded hours.

When the extent of the impact of the pandemic became clear—with the closure of the whole sector, other than providers and settings who were providing critical childcare—I could not have dreamed that, in December, we would be this far on with delivery. Local authority colleagues and other delivery partners have shown tremendous commitment to deliver the expanded entitlement to many more families since March.

As we look ahead to 2021, we will continue our focus on realising the transformational benefits of the expansion, including improved educational and developmental outcomes for children, enhanced family wellbeing and greater employment and training opportunities for parents and carers.

We are firmly committed to the roll-out of the transformational ELC expansion programme. We know that it will bring benefits to our children and families and we will continue to work with local government and providers to deliver on that as quickly as possible.

Last Friday, on 4 December, the ELC programme joint delivery board met to consider the evidence that has been gathered on readiness to deliver the expansion, including the advice of an independent review. Having carefully considered that evidence, the board has recommended a new 1,140 hours delivery date of August 2021. That recommendation is being carefully considered by the Scottish ministers and Convention of Scottish Local Authorities leaders. Once a final decision has been taken, which I expect will be in the coming days, I will confirm to Parliament the new planned implementation date. It is my intention to bring forward the associated legislation before the end of this parliamentary session.

I am happy to respond to any specific questions that the committee has.

Thank you, minister. We will move to questions. Members should type R in the chat box if they have a question.

On previous occasions when the minister has met the committee, we have discussed the group of pupils who will not be able to benefit from 1,140 hours of funded ELC: those who defer primary 1 entry. Some time ago, you agreed that you would bring forward legislation to change that position and give them the same entitlement as every other young person. I am delighted to see that you did that earlier this week. However, it is disappointing that the implementation date of 2023 is in the distant future. Can you explain why it will take so long for that welcome measure to come in?

Thank you for that question. I recognise your commitment to the issue and your pursuit of a solution on behalf of the children that it affects. I also pay credit to and commend the successful Give Them Time campaign, which has worked so constructively with Opposition colleagues, cross-party colleagues and me. Within just a couple of years, it has achieved a change in legislation that means that all children will have that automatic right and entitlement to free, funded childcare.

You are correct that that right will not be in place until 2023, which reflects the timing challenges that we have. At the moment, everybody’s focus is on delivering the 1,140 hours. I am sure that we will get into the detail about it during this committee appearance, but we have concerns around the capacity to deliver 1,140 hours, so it is difficult for me to commit to deliver sooner on the entitlement for deferred children, because it adds another unknown variable in terms of requirement for capacity.

However, as I have said many times before, I expect local authorities to make decisions about additional funded ELC in a deferred year for children born between August and December who defer on the basis of an assessment of the child’s wellbeing. Local authorities should work in partnership with families and local services to assess what is in the best interests of the child. That is set out in the ELC statutory guidance that accompanied the Children and Young People (Scotland) Act 2014.

It is worth noting that there has been a significant shift in the percentage of funded deferral applications that are granted. Again, that is testament to the success of the campaign. Most local authorities now accept most such requests. A few years ago, only 13 local authorities accepted 100 per cent of deferral applications. Last year, that number had gone up to 20 local authorities, and 11 of the remaining 12 local authorities accepted more than 80 per cent of applications.

The picture has changed substantially because of the campaign. The change in legislation that will come a couple of years down the track will be the final piece in the jigsaw, but I expect local authorities to put children’s wellbeing at the heart of their decisions before then.

You are absolutely right to give credit to the Give Them Time campaign—[Inaudible.]—but you have to understand that that campaign was won more than a year ago, when you accepted, in Parliament, the need to change the legislation. You have had a year to prepare that legislation. It has just been laid now, and it will be a further three years before it is implemented.

You have said that the majority of local authorities now approve the majority of discretionary applications, and that, in spite of Covid, you expect to be able to deliver the much bigger commitment to extend provision to 1,140 hours by August next year, so the change is relatively marginal compared with that. Why on earth can the change not be delivered next year, so that the families of pupils who defer next year can be sure that they will get the benefit of the early years funded hours?

I absolutely understand that campaigners will be disappointed by the delay, but my colleagues in local government and I judge that the unknown quantity could threaten the delivery of 1,140 hours. I have to prioritise the delivery of 1,140 hours.

We have made substantial steps towards delivery. For example, we have worked with the Give Them Time campaign to put on the Parent Club website information that makes it clear, directly to parents, that they have a right to defer. We are making progress on many of the issues that are associated with the campaign, but I cannot put in place the statutory entitlement until 2023. I believe that that is the earliest that I can safely deliver that.

I do not have any more questions, but I am very disappointed. The minister knows two things. First, we cannot amend the statutory instrument and, secondly, she will have to come back to the committee to move the motion on it. I make a final plea for her to reconsider, make changes and bring back legislation in a form that would deliver the guarantee earlier for more families.

Good morning, minister. When I was listening to your exchange with Mr Gray, I was trying to work out the position, from what you had said earlier. You should bear in mind that I am relatively new to the committee and am playing catch-up. You will have many challenges in the coming year and, because of Covid, you have had challenge after challenge in relation to the programme of building and ensuring that the processes are there.

You are talking about potentially delivering 1,140 hours by August 2021, which is a good thing on which we should probably all congratulate you. Is it not the case that you do not want to disappoint people? You are trying to ensure that, when you make a decision, you actually deliver for people. Is that not what you are trying to say to us?

10:45  

Yes—you are quite right. We are absolutely committed. We are in a very difficult period. Mr Gray asked why the Government had not made the change sooner. We only have to look back over the past year to understand some of the things that might have impacted on the progress of the legislation.

I know that some stakeholders will be disappointed. I met representatives from Give Them Time last week, and I know that they will be disappointed with the decision, but they have to take heart from and take credit for the progress that has been made. The final piece of the jigsaw will fall into place in 2023, but we have made substantial progress since that campaign started, and we will continue to make progress.

As you say, quite rightly, there are many other variables at the moment, and, as a result, that is the earliest that I can safely be sure of delivering the commitment, and I absolutely want to deliver it.

You highlight the difficult year that we have had, and who knows what next year will bring? We know that there is that uncertainty, so I appreciate your answer.

I will follow Iain Gray’s line of questioning about the deferral process. It appears that, between the time that the commitment was made and the time that the change comes into effect, three cohorts will miss out. You have said that you want to make Scotland the best place for children to grow up in, and I absolutely agree with that. However, the Scottish Government hopes to incorporate the United Nations Convention on the Rights of the Child into Scots law before the end of the parliamentary session, and the point of that incorporation is to put the rights of the child at the centre of public bodies’ decision making. We know that there are families who want to defer but who are unable to do so because they cannot meet the extra costs if their requests for funding are turned down. It has been suggested that the cost to families is around £4,500. If the UNCRC is incorporated this session, does the minister believe that charging for deferral would be compliant with the law?

Let me be absolutely clear: at the moment, all parents have the legal right to defer their child’s entry to primary school if the child is not five years old at the beginning of the school year. You are quite right that, under current legislation, only children who are born in January and February are automatically entitled to an additional year of funded early learning and childcare if they defer entry to primary school. We have listened to concerns from parents and practitioners on that, and we committed to bringing forward legislation during this parliamentary session. I have done that. It is essential that, in planning for that, we work closely with local authority partners to assess the resource implications and to set an achievable implementation timetable for the change. It is not the case that, between now and 2023, there will be no change at all. We are working closely with local authority partners to see what changes we can bring in in the interim, but 2023 is the earliest date by which I can reasonably be confident of delivering a full right for all children.

On another topic, the latest Improvement Service progress report on the expansion said:

“Proportionately, the 2-year-old uptake is further behind the anticipated position (at 54% of the pre-COVID forecast figure) than the uptake amongst 3- to 5-year-olds”.

What progress is being made to raise awareness of the offer to two-year-olds, and what progress is being made in discussions with the United Kingdom Government, which began in 2016, to develop a legal gateway to share data on families who are potentially eligible?

Increasing uptake, raising awareness and ensuring a high-quality offer for two-year-olds is a joint effort, and we are all working on it. We are working collaboratively with local and national Government to support increasing uptake and awareness of the funded entitlement for two-year-olds.

I will give you more detail on where we have got to with the UK Government, but we are also working with parents and carers to help them to make informed decisions on ELC through the services that they already access. Parents and carers should hear about the offer through health visitors and through Social Security Scotland when they are accessing best start grants.

We are extending eligibility to care-experienced parents as well, and we are keen to highlight that offer. If you remember, we also worked hard, taking a multidisciplinary approach, to develop good practice on how to enable parents to easily access the offer. We worked with the children and young people improvement collaborative and we shared our learning from that. We are keen to continue sharing our learning on that.

I absolutely share Beatrice Wishart’s frustration about the legal gateway issue. We are working with the UK Government, the Department for Work and Pensions and Her Majesty’s Revenue and Customs to make progress on that, to enable exactly the same data-sharing ability that English councils currently have.

We are pursuing a legal gateway under a UK act, with UK departments, and we are dependent on UK Government timescales and work plans. There have been a number of frustrating delays. There have been delays relating to work on the European Union exit, there were delays relating to the 2019 general election and now there are delays relating to the Covid pandemic.

In February this year, I wrote to the then UK minister in charge of the legal gateway, Nigel Adams MP, who was the Minister for Sport, Media and Creative Industries. However, since then, responsibility has moved again within Whitehall. To be absolutely clear, my senior officials are working very closely with senior officials in the UK Government, but I am happy to place on record my frustration at the slow pace of progress on the issue.

We had an informal focus group this morning at which we heard that some progress has been made in making sure that local authorities work more closely with private, voluntary and independent providers, but the suggestion from that group was that the progress has been brought about because of Covid. It is perhaps one of the few positives; the sense was that local authorities felt that they had to engage with partner providers in order to deliver and it forced their hand.

What more are you doing to ensure that we have a provider-neutral approach and that childminders and other PVI providers are given the same support as local authorities?

As we have said many times before, partnership working is absolutely at the heart of the success of the policy. It is at the heart of the funding follows the child approach and the national standard. The principle that local authorities and providers should work together meaningfully and in genuine partnership in delivering flexible ELC provision, and in continuing to ensure that a high-quality experience for children is maintained and is accessible to everyone, is firmly embedded in our approach.

There are loads of good examples of partnership working, and we are aware that some of those relationships have further strengthened since the pandemic because, as you rightly say, providers in the private and childminding sectors had to work closely with local authorities, particularly to deliver the childcare entitlement for critical workers.

It is important that we build on that progress and that we address some of the existing challenges. Some tensions have come to the fore as well. To support improved partnership working, we developed an ELC partnership forum back in October 2018 to provide meaningful partnership working right across the ELC sector and to provide a platform for sharing best practice and to explore new ideas and perspectives.

We are keen to pick up that programme of work and deliver it virtually for the first half of 2021. To inform and prepare us for that, we launched a survey just this week to seek the sector’s views on where the forum should focus its work programme.

It would be interesting if you could say, perhaps at the end of your next answer, when you expect that survey work to be fed back and finished.

I turn to my second question. It has been suggested—I hear this locally from parents and ELC providers—that the approach of local authorities is sometimes inflexible. There is a sense that local authorities see their nurseries as sitting side by side with schools, and they are not always, in every setting across the country, being as flexible as they could be to ensure that the hours that are on offer work for parents. Are you aware of that issue? If so, what are you doing to address it?

The principle that funding follows the child will transform the sector and put the power into parents’ hands to choose the type of childcare that best suits their child and their family. As long as a provider meets the national standard that underpins everything that we do and is willing to enter into a partner arrangement with the local authority, parents will be able to access their funded childcare through that provider. The landscape will be transformed by that approach.

As we have been phasing in the 1,140 hours commitment, we have seen significant changes. The proportion of the 1,140 hours that is delivered by partner providers is greater than we expected at the beginning when we started that work. I expect that the situation will continue to evolve as the commitment is embedded.

The survey that I mentioned went out only this week, so we are waiting for responses. We are planning a programme of work for the first six months of 2021 to enable and put in place good partnership working.

Thank you, minister, but I was really asking about local authority-run nurseries and whether they are pulling their weight when it comes to offering expanded hours. There is a suggestion that they have been happy to do what might be called the easy hours, which match up with school time, while not offering the hours that parents are looking for. That is what I was getting at; perhaps I was not clear.

I am sorry, Mr Mundell—perhaps I misunderstood. To be clear, local authorities have a statutory duty to consult every two years with the population that they serve, and to ask what type of childcare, and what models and hours, are required.

We are absolutely working towards making provision more flexible for families, but that does not mean that every setting will offer every model of childcare or every range of hours. However, in each area, local authorities will provide what parents are looking for. In some places, that may mean that a local authority nursery will offer 8 am to 6 pm care all year round, for a mix of ages; I have been to local authority nurseries that take children ranging from babies to five-year-olds.

The picture is changing, and I expect that the situation will continue to progress as parents understand the transformation that is going on. One of the challenges is that people ask for what they expect. I think that, as they realise that there is potential for them to ask for what works for them, local authorities will be pushed to deliver hours that suit and support working families very well, in the way that we hope the offer will do.

We have a couple of supplementaries. The first is from Rona Mackay.

Sorry, convener—it is not really a supplementary; it is a separate question.

In that case, I will bring in Alex Neil to ask his supplementary and then come back to Rona Mackay.

11:00  

The Scottish Government’s strategy and principles are absolutely bang on—they are first class. The problem that we have is that the Government’s intentions are not always being carried out.

As you know, minister, I represent a constituency in North Lanarkshire and, if you speak to parents in the area, you will find that a number of them—albeit not all of them—and certainly people in the PVI sector, will say that the funding is not following the child. There have been a number of cases where a child and the parents have been denied a place in the PVI sector, even though that is their preference by far. The council has put a cap on expenditure for the PVI sector, even though £6 million of unspent funding is apparently available. The view that is being expressed—with which I have some sympathy—is that North Lanarkshire Council is basically running the policy to suit its requirements.

The council has two roles, as a regulator and a provider, and the policy seems to be driven by the council’s provision needs, rather than its regulatory needs. I know that you and your officials have done your best and that you have been working on the issue for some time, and that the convener and I have both raised the problem with you, but there comes a time when the Scottish Government has to say to recalcitrant local authorities that are not fulfilling the spirit or letter of the policy that enough is enough. Councils have to give the PVI sector a fair crack of the whip, particularly where parents want to exercise the choice to have their child go to a PVI provider, rather than a local authority provider. Then, we can truly say that the money will follow the child. I feel that a great policy at national level is being undermined by local practice in this case.

First, I must put it on the record that I am grateful to North Lanarkshire Council for delivering 1,140 hours. It has been the toughest of tough years. All the progress on the 1,140 hours had to stop, and we had to pivot to face a national emergency. Despite that, because of North Lanarkshire Council’s commitment to delivering the policy, we were able to deliver 1,140 hours in October. That is to the council’s credit.

I do not think that it has been intentional on the part of the council not to deliver full flexibility at the point of delivery of the 1,140 hours. As a result of some of the buildings not being built, the council had to adopt different plans to deliver the 1,140 hours.

There has been a particular situation in North Lanarkshire. One thing that happened was that a very small number of parents applied late to get a nursery place in a PVI setting, and they were unable to get their first-choice setting. It is really disappointing when a brilliant policy such as this does not feel like a brilliant policy to the parents receiving the services. However, I have to defend North Lanarkshire Council: I do not think that there has been a deliberate attempt to thwart what the Government wants the policy to deliver.

The funding follows the child approach will make a difference next year. When the national standard and the statutory duty are in place, all those underpinnings will be legal requirements, and the funding will follow the child. This year has been an exceptional year, and I must give credit to North Lanarkshire Council for delivering 1,140 hours.

I agree that North Lanarkshire Council deserves credit for committing itself to 1,140 hours, unlike many other authorities. More widely, North Lanarkshire has pioneered the highly commended 365 club, for example. This is not a rant or a generalisation about education in North Lanarkshire; it is about a specific issue that is independent of the 1,140-hours issue.

A cap has been put on the PVI budget, which I believe has been frozen for three years. That is resulting in some bizarre situations in which a number of parents are not getting a choice, even though they could have a choice because the facilities exist in the PVI sector. That is undermining confidence among the parents who are in that situation and the PVI providers.

I am happy to meet you to talk about it—the convener might want to join that meeting, too—because there is a specific issue in North Lanarkshire that needs to be addressed. It is not about the lack of commitment to 1,140 hours; it is about other policies that are not giving parents the choice that they need.

I am more than happy to have a meeting, if that is what you would like. I have had numerous contacts with North Lanarkshire Council through parents and providers, and we work closely together. The challenge relates to the procurement model, which is perhaps not as flexible as in some other local authorities. I am not sure how possible it is for us to alter it at this stage, but I am happy to meet you to see what we can to do make progress on the issue.

Thank you.

I have an indication of another supplementary from Mr Gibson.

Apologies, convener—I was called out by a colleague to talk about ferry issues a few minutes ago.

Just prior to Covid, I contacted a minister about an issue that I was contacted about, which was the continued frustration among providers that local authority places continue to be offered first. That does not reflect parental need or choice and it is affecting the viability of some private nurseries. They are needed if we are to ensure that parents have a choice and that we have the required capacity.

Another issue, which you will know about and which is in the committee papers is that 62 per cent of the member organisations of the National Day Nurseries Association say that they have difficulties with retention, some of which is because local authorities and their nurseries are poaching staff. How do we encourage local authorities to train more staff rather than poach them from private sector nurseries, which local authorities are sometimes not assisting in the same way as they do their nurseries?

That was not really a supplementary on the issue that we were addressing, Mr Gibson, but the minister can answer it before we move to Rona Mackay.

I will first reiterate on the record that partner providers are crucial to the success of the programme. We need them not just to survive, but to thrive and to deliver the capacity, flexibility and range of experiences to suit children and families. It is really important that they are part of the programme.

The issue will be solved by the funding follows the child approach, which, as I have said a couple of times already, puts the power into parents’ hands to choose the type of childcare that suits them. Local authorities will explain what is on offer and the different models that are available and parents will hold the power to choose the offer that best suits their child and family. That is not fully implemented at the moment, because we do not have the statutory requirement to deliver 1,140 hours or the statutory underpinning for the national standard, which includes funding follows the child. I expect that to make a difference when we put it in place next August.

Local authorities are training their workforce. There is a huge amount of investment right across the board including into in-work training, recruitment from colleges and universities and apprenticeships to ensure that the pipeline of new employees is available for the expansion. We have been working on that for many years. You are right that local authorities need to act responsibly. They cannot thrive at the expense of the PVI sector, so they need to manage the situation carefully.

Many local authorities throughout the expansion have had internal recruitment programmes, so they have taken people who are already working for the local authority and have retrained them in early learning and childcare so as not to impact on their PVI colleagues. As you said, PVI providers are absolutely crucial to delivery of the capacity.

I have a couple of questions, one of which is about the pandemic and how much it has set back the 1,140 hours initiative. In East Dunbartonshire, we are delivering 940 hours, which is mainly a result of construction of two new nurseries having stopped during lockdown.

You have said a bit about training and people trying to enter the profession. I know that there was a huge recruitment drive; I presume that it is still going on. Has the pandemic affected the number of trained practitioners that you can get into the profession? Are you confident that you will have enough by August 2021?

You are absolutely right that the pandemic has had a pretty devastating effect on the programme. Back in March, we had to take the decision to pause delivery of the programme; every single local authority and all our other partners turned to face the crisis. Most of the sector was closed and we had to set up a programme of childcare for children of critical key workers and vulnerable children. We were in completely unknown territory.

Despite that, and despite the fact that we are still in unknown territory and are facing challenges from Covid every day—we are far from being through it and out the other side—councils and our partners have managed to deliver. In the face of the pandemic, they have managed to increase their offer in what was already a complex and challenging transformational social-infrastructure investment. Again, I give all credit to our local authority partners and all those in the private, voluntary and independent sector—childminders, nurseries, playgroups—who have managed to turn and face the pandemic and increase their offer despite it.

On the question about deciding to reinstate the offer, the delivery assurance team has worked closely with councils to collect evidence of the impact of Covid on delivery. That has included quantitative data as well as detailed programme reviews with council teams.

The core areas of expansion that we considered when we were having the discussions with local authorities included uptake and eligibility, capacity, infrastructure partners, workforce, and quality. The additional areas that were raised with us in discussion were the impact of the Covid-19 pandemic, the operating public health guidance that causes some—not many—capacity restraints, and the impact of Covid-19 costs on the programme finance.

The joint delivery board received a detailed assessment in support of our decision-making. As well as collecting all that detail, we carried out an independent health check with a view to testing our assumptions and to considering and identifying risks.

As a result of all that work, we are confident that we can deliver to the new statutory date that I hope will be in place very soon.

Thank you, minister. It is encouraging to hear that. It sounds as though an enormous amount of work has been done to cope with the situation.

I am finished, convener. Thank you.

11:15  

I am interested in the construction issues that have resulted from the pandemic, and in the wider issues from the need to create additional capacity through expanding the existing estate or building new facilities.

The Scottish Futures Trust’s report says that six local authorities will not have created the required number of spaces to hit 1,140 hours by August next year. Has the Government had discussions with each of those authorities to identify exactly why that is the case? I am sure that there is a range of understandable challenges, but it would be good to know whether the Government knows the exact state of play in each area.

I will ask Simon Mair to give you more detail—he is my official who works closely with local authorities in every part of Scotland to support them in providing 1,140 hours.

Construction stopped for four months and—to be frank—buildings that were meant to be built were not built. In relation to getting construction going again, capacity constraints mean that construction is not quite functioning as it did pre-pandemic. We add into the mix the fact that we are in winter, with all the potential for bad weather to disrupt construction.

Brexit is another unknown. I do not know where we are—whether we face a no-deal Brexit or a deal has been made. A lot of unknowns might impact on a big infrastructure programme such as this.

We have worked closely with local authorities to ensure that, when construction will not be completed by the date that we hoped for, we have robust contingency plans in place to support delivery of 1,140 hours, regardless of whether a building has been finished. We did a lot of that work previously. When we were approaching August 2020, there was a lot of uncertainty and the programme was back-ended. We were aware of potential risks, so we worked really hard on developing contingency plans. Because of the pandemic, we think that the profile of delivery will be smoother, but we have robust contingency plans in place for local authority areas where buildings will not have been completed by August.

I ask Simon Mair to give more detail to assure the committee of all the work that is going on around the country to ensure that we deliver.

Ms Todd has covered many of the points that I would have made. Construction delays relate to the impact of the pandemic and the four-month shutdown of construction sites across the country, which has led to a delay of six to nine months in construction projects—the period depends on where they were in the development cycle when the pandemic hit. Delays are the result of delay in construction, remobilisation time and the impact on productivity on site, which can be significant in maintaining a safe operating environment.

As for our engagement with local authorities, we work closely with them all across the programme’s components on how they are developing capacity. On our behalf, the Scottish Futures Trust has a process for tracking the delivery date and risk of every construction project—all 900 projects—in the programme. The SFT regularly meets the construction teams in each local authority and updates the data quarterly.

We know which projects are programmed to be delivered after August 2021. As Mr Greer mentioned, there are a number of ways to realise capacity, of which the addition of physical infrastructure is one. The projects have been identified in which physical infrastructure will not be available, and local authority teams are developing, or have developed, transitional plans to provide capacity to deliver 1,140 hours in another way.

That might be, for example, temporary facilities or changes to—[Inaudible.]—a number of things, which really depend on local circumstances and local demand. The councils have worked, and we have worked with them, to understand local need and to consider how transitional arrangements will be managed until constructions projects are delivered. We are definitely aware of the issue; the aim for us and local government over the coming nine months up to the proposed implementation date is to ensure that transition plans are really robust and will help to provide high-quality experiences for the children who are going into those environments.

I will look beyond the transitional arrangements, which might involve temporary facilities and the other things that you have mentioned, and consider the permanent additional infrastructure that is required. Are all the required sites and parcels of land already in local authority ownership—irrespective of whether construction is under way or completed—or are there cases of local authorities having still either to identify appropriate land or to purchase it after identification?

I would have to check; I am not aware that there are projects for which the local authority does not own or has not secured the land that it needs, but I could not swear to that without checking. A small tail of projects will go beyond August 2021, but I am not aware of any projects in which land purchase is an issue for delivery. I will check.

It would be useful if you could write to us to flag up any examples, if you find them.

I have a final question. Were all the required construction projects under way by March, before the pandemic delayed them, or had some not yet been begun? If a group of projects was in that position, have any of them resumed, and have any not yet started construction, with ground not yet being broken on site?

Again, I say that I would have to check the detail. I cannot tell you of any specific projects that have not started. In all the construction and development, some projects had not started construction on site at the start of the pandemic—some were scheduled to start in summer, for example, in order to fit in with the school holiday periods. That is a constraint of working around live school or ELC sites. We would have to get back to you on the specific detail to answer that question fully.

A follow-up in writing would be appreciated. Thank you.

I am sure that the minister will provide that.

The reason why I am smiling and tried to chip in is that, this past week, I was sent photographs of children in a nursery that I had visited with a hard hat earlier in the year. There it was, in South Lanarkshire, opening its doors to children just this past week. It was very exciting to see—like seeing one’s dreams come true.

We all agree that funded early learning and childcare is a good national policy from the Government. However, as we have discussed this morning, the perception of it among parents, and the reality of what they face on the ground, varies across the country.

We have had a lot of feedback in the committee’s online survey of parents—which was well received—and in anecdotal evidence, that the funding does not really follow the child, and that there is room for improvement. Limitations clearly exist for parents around how they can get funded childcare. I want to explore some of those with the minister and get a feel for how she thinks we could improve the situation or help local authorities to manage it better.

Two issues clearly stand out. There is a limit on how many funded-hours children the PVI sector can take. The perception is that the amount that they get paid for those funded hours is less than the cost of providing the childcare, which is an issue for providers. Councils are limited in what they can offer, because many council nurseries are not open before or after schools, or during school holidays. That is an issue for parents, who must then go back to the PVI sector and pay to top up the hours, which, if they are available, are often expensive. Can councils address those issues, so that parents are offered the flexibility that we all want to give them?

Councils are addressing the issue in order to offer full flexibility. One of this year’s challenges from the pandemic has been difficulty in delivering flexibility. Nobody disputes the policy aim, we have not had a change in direction and we do not want to not deliver the policy. It is just that the constraints that we are under due to the pandemic make it extremely difficult to deliver full flexibility, at the moment.

As I have mentioned several times before, the approach of funding following the child underpins the statutory duty, and the national standard is part of that, as is paying a sustainable rate. Over the course of the expansion of funded hours, we have spoken a number of times about how much the rate has increased in different areas—there have been significant improvements in that. Historically, PVI sector pay was exceptionally low, but we have given clear instructions to local authorities on how to calculate a sustainable rate, and we have given them sufficient funding to ensure that they can pay it. The response to the challenges will be improved as we continue.

I will bring in Alison Cumming, who might want to provide the committee with more detail to ensure that you have confidence that we are aware of and on top of the issues that you raise.

I have a couple of points to add on the sustainable rates guidance. We have been working hard to listen to providers about how to improve transparency in rate setting at local level, and how we ensure that there is an evidence base to support development of the rates. That is what we have sought to secure through the sustainable rates guidance, which Scotland Excel produced and which had significant input along the way from focus groups of providers.

The guidance sets out different methodologies that local authorities can apply in setting sustainable rates and promoting the principle of transparency. The rates should, as far as possible, be built on evidence of the costs that are incurred by different types of provider in the private and voluntary sectors and by childminders.

The development of sustainable rates by local authorities has borne fruit. The most recent data collection that we did showed that average rates for delivery of 600 hours increased by 26 per cent over the two years to August 2019. We will refresh our data collection on sustainable rates in early 2021.

It is a fundamental part of the policy, and of the agreement that we have with local government on funding following the child—which COSLA leaders signed up to—that sustainable rates are paid and that those rates reflect the true costs of provision for PVI providers.

I thank Alison Cumming for her answer. I am broaching my questions in a constructive manner, because what we are hearing from parents is the reality of what happens when they try to expand their childcare provision. For many parents, the childcare that is available and is within their budget is what lies at the heart of their decision about whether to go back to work full time or whether to go back to their work place after working from home for so long. It will be a huge decision for them—we know that from what has happened recently.

A few councils have raised with me concerns about much of the funding that was given to them to increase the provision to 1,140 hours or even just to meet the statutory minimum requirement as it currently stands having disappeared over the past eight months on running childcare hubs or dealing with additional Covid-related expenses. That is through no fault of their own or, indeed, of the Government. How much of the money that has been given to councils specifically for the roll-out of the 1,140 hours has had to be diverted away? How will the Government deal with that? Will any of those councils be recompensed for that?

11:30  

I will pick up on that first and then ask Alison Cumming to give a little more detail.

I welcome Jamie Greene’s saying that the policy is good—but I dispute that. As he mentioned in his follow-up question, it is totally transformational. It is huge. It will change the prospects for families and for parents who want to go to work. The impact of high-quality early learning and childcare on children who receive it will follow them throughout their schooling and ensure that they achieve their full potential, and it will follow them into adulthood. There will also be a measurable impact on their children. The policy is truly transformational. It will be transformational for individual children, it will support their families, and it will tackle poverty and some of the intergenerational complexities that have been really challenging for Scotland for many years. I am really excited that we are at the point of delivering that transformational policy.

You are absolutely right on the funding. As we faced the emergency situation, we gave local authorities the flexibility to use ELC money to provide key worker critical childcare. I think that, nationally, around 7 per cent of the funding was diverted to respond to that need. The picture varied throughout the country, of course. Some local authorities had not come close to delivering 1,140 hours, so they did not have to pay for the structure of the 1,140 hours, and they had a great deal more flexibility to use that funding to deliver critical childcare. Other local authorities that were very close to delivering 1,140 hours found things a little more challenging.

I ask my colleague Alison Cumming to give members a little more detail on that.

Ms Todd has made the key points. We are currently analysing financial returns from local authorities on their planned or actual spend on ELC in the current financial year. As Ms Todd has said, the indications are that, on average, around 7 per cent of the revenue funding for 2020-21 has been spent on Covid-related matters and making use of the funding flexibilities that we set out to authorities in a letter in May. We are seeing that having an impact on the timing of recruitment, for example, but we do not see it having an impact on actual delivery.

One factor that has gone into the joint delivery board’s consideration of setting a new statutory date is that there has maybe been a one-off impact from non-recurring costs being incurred in the current financial year—in 2020-21. That might mean that some authorities undertake some of their recruitment a little later than they might otherwise have done. That is one example. However, the information that has come through from local authorities in the returns, which we are currently analysing, is that that will not create a barrier to implementation from August 2021, which is the date that is currently under consideration by the Scottish ministers and COSLA leaders.

Thanks for that. Maybe if there is an update on the finances, someone could write to the committee with the detail. I agree with the minister that policy can be transformational, but it is so only if it is delivered. We know from our survey that only 33 per cent of respondents currently feel positive about funded childcare. There are a lot of people out there who are not happy with the delivery of the policy. If only 14 of 32 local authorities are delivering the Government’s intended policy, there is still a long way to go in that respect, although the policy was announced in 2014 by the current Government. So, I wish you well.

I will take a quick—I hope—supplementary question from Mr Neil and then go to Mr Gibson. [Interruption.] Sorry, Mr Neil, I have just seen the note of your question, and it is about another area, so I will bring in Mr Gibson just now and then come back to Mr Neil.

Mr Greene’s view is that the glass is half empty rather than half full. However, I want to talk initially about the geographic availability of staff. Is the minister happy that the recruitment has managed to attract people from across Scotland, or are there specific pockets of the country where there is difficulty in recruiting staff? If so, what is being done to solve that problem?

You are absolutely right to ask the question. We have been working closely with our local authority partners and with colleges, universities and Skills Development Scotland to deliver modern apprenticeships to ensure that the workforce coming through the pipeline is sufficient. We have worked really hard on that. Rural areas such as those that you and I represent can sometimes have difficulty with there just not being enough people. Island communities are particularly prone to just not having enough people. It is not that there is any unwillingness to do the work, it is just that there are not enough people.

What we have found, though, is that, in rural areas and the islands, there are people currently working part time who want to switch to working full time, and this investment has given them the opportunity to do so. Therefore, in many ways, the challenge that I fully expected in rural areas has not been borne out by the data. I will ask Alison Cumming to give a bit more information about where there might be particular recruitment challenges.

Of course, every single part of Scotland will have more jobs because of this investment, which is to be welcomed. Undoubtedly, it will bring national challenges as well, but people in the area that I represent will have full-time jobs that are secure and satisfying. Members will remember that I said that this is a transformational project, and people will go to work knowing that they are making a fundamental difference to the lives of people in their own community. The jobs are attractive and, as far as I am aware, we are not seeing any difficulty in recruitment. In fact, there is, if anything, oversubscription when the jobs go out to recruitment.

I ask Alison Cumming to give you a bit more information about how we have approached ensuring that we have a sufficient workforce in place.

We have specific challenges in relation to growing the workforce pipeline but, thankfully, only in a small number of communities—usually rural communities—in relation to ensuring that there is a sufficient pipeline. The authorities there have benefited from grow-your-own schemes that, in many cases, are modern apprenticeships or other vocational training routes.

What we have found throughout the programme is that it is not out of kilter with other sectors. We sometimes see a greater uptake of the vocational training programmes than of the college-based training programmes, which has helped to bring a wider range of people into the sector, because people are able to earn as they are conducting their training, which has been great.

In a number of local authorities, we have seen really great success through pipelines of foundation apprenticeships. People have come out of school having completed their foundation apprenticeships in early learning and childcare and have then gone into a modern apprenticeship or college training. As I said, the greater availability of vocational training programmes has meant that we are attracting wider age ranges and a more diverse workforce, which is great. In the modern apprenticeship programme, we have seen a significantly higher percentage of men than is the case in college routes into the sector—I think that it is about three or four times as many, although the numbers are still small overall. We are also seeing greater diversity across other characteristics.

One of the real successes of the expansion has been that we have managed to diversify and open up opportunities to a greater range of people. The approach has not been targeted only at school leavers, as perhaps has sometimes been the case in the sector. Leaving aside the pandemic period, Skills Development Scotland has exceeded the target that we agreed with it of 10 per cent year-on-year growth in modern apprenticeships throughout the expansion programme. That has been a real success.

I have heard only good stories about the vocational programme and the apprenticeships. I have spoken to a couple of young men who are very enthusiastic about their new career and who are thoroughly enjoying it.

You said that some areas have particular challenges. Is there any kind of incentive scheme to persuade people to move from other areas to the places where there are particular challenges, to enable those areas to provide the same level of childcare as is provided everywhere else?

Not that I am aware of. I am smiling wryly because people living in those areas would say that the pandemic has provided an incentive scheme, and there is real concern about the population shift that is occurring. We are in a time of flux. If we require to put in any extra effort to recruit the right people to deliver this phenomenal programme, I am certainly open to suggestions.

That is great. Thanks very much.

Are you finished, Mr Gibson?

No. I want to ask about the tax-free childcare scheme. I understand that there is a real issue with that. Her Majesty’s Revenue and Customs has said that the uptake of tax-free childcare is low in Scotland, with only 5.4 per cent of UK families who use that scheme coming from Scotland. Apparently, over the past three years, £1.7 billion has gone unclaimed. There is a suggestion that there should be a single, parent-held account for all early learning and childcare support funding. Is the Scottish Government considering that in order to maximise the take-up of the tax-free childcare account?

You are absolutely right to point to the poor take-up of that scheme. The complexity of applying for the scheme disincentivises people from doing so. One wonders whether it was constructed deliberately in that way. However, we have put information on the Parent Club website that makes it more straightforward for parents to navigate the system. Over the course of the pandemic, parents have gone to our Parent Club website more often, and it is a trusted source of information. There is good information that links to the appropriate pages and that will help parents to navigate the system. However, the system is complex and off-putting. It is disappointing that parents in Scotland are finding it hard to apply for and use that UK Government support scheme.

Finally, if I may—

I am sorry, but I wonder whether Alison Cumming wants to say anything more about that. We are certainly aware of the issue, and the National Day Nurseries Association has raised it with us.

I am happy with that.

I have one more question, which is about how we can encourage an increased number of childminders. Nurseries are not for everyone. My three scamps all went to nursery but, on occasion, we had to have a childminder. The lack of childminders, particularly for very young children, is an issue, and parents often seem to struggle to find them in the areas where they live. What can be done to ensure that we support that sector?

11:45  

Childminding certainly faces real challenges, but it offers a wonderful solution for many families. One of the beautiful things about it is that it is a completely unique, home-based offering. It also enables siblings to learn together—they are not separated into different classes. I saw that clearly when I visited a childminding setting earlier this year. I met a wonderful childminder, the children she looked after and their parents, who had chosen her. One of their very strong reasons for having done so was that sibling groups could stay together—brothers and sisters could learn and play together, just as they would at home.

We are keen to promote childminding as an option and to support families to access it. I again highlight the introduction of the approach whereby the funding follows the child. That means that any childminder who meets the national standard, who has a place available and who is willing to enter into a contract with the local authority will be able to offer funded ELC entitlement.

Over the years, as such entitlement has been phased in, we have seen increases in the numbers of childminders who offer and deliver funded ELC to families. However, those increases have been from a very low base. As we move forward, it will be important for us to build on such trends and to support childminders, to enable them to offer funded ELC. That will require collaborative efforts from all of us, and right across our partners, to support parental choice and highlight the benefits of childminding. There are some really superb practitioners out there. For example, I have even met an outdoor childminder, who does wonderful work. However, as well as highlighting the benefits, we must ensure that parents and carers have information that enables them to make informed decisions about the right settings for their children all the way from birth to school age.

At the moment, there are some barriers to that. One challenge is that the paperwork and the bureaucratic process that childminders have to go through in order to become funded partners can be quite a burden for individual practitioners as opposed to those who operate big nurseries and employ many people. We are trying to ensure that that bureaucracy is made more proportionate, as we want to simplify the process for childminders to become funded practitioners. We are also working closely with the Scottish Childminding Association to highlight the offer and support childminding.

One of the current challenges is the decrease in demand for childminding places for school-age children, which is one of the aspects that formerly made such businesses viable. We are keen to understand the complex challenges that childminders face at the moment and to support them, to ensure that they not only survive the pandemic but thrive. I firmly believe that what childminding has to offer is special and unique and that many families could benefit from it.

I have a couple of questions on funding. I am member of the Public Audit and Post-legislative Scrutiny Committee, and, if I remember correctly, the figure for capital funding for the 1,140 programme is £476 million. First, what has been the impact of the Covid pandemic on that figure? Is there a need to look at it again? Might there be a need to increase it because of delays and so on?

Secondly, you probably cannot give the committee information on the allocation for local authorities now, so perhaps you could send us a copy of that. How much has been spent or committed? What is the split between councils’ provision and the PVI provision? If it is possible to provide that information, that would be useful.

Yes—no problem. On the capital costs, my understanding is that, because so many of the construction projects were already contracted for, and in many cases the work had begun, the impact is limited. I will ask Simon Mair to give you a little more detail on that.

On the capital funding of the PVI sector, you will remember that different local authorities have different processes and that there was a real challenge in relation to state aid rules. There are always concerns about public money going to private industry, and each local authority had to get its own legal advice on how to do that. Some local authorities managed to support the PVI sector with capital funding in a way that was compliant with their legal advice; other local authorities found that significantly more challenging. I ask Simon Mair to give you a bit more detail on that issue, too. We can also write to you with more detail.

The impact of Covid on the capital costs of delivery is variable; there is no one-size-fits-all answer to the question. It very much depends on where projects were in the development and construction process when the pandemic hit; the procurement route and the contractual arrangements that councils had with contractors when they were developing the projects; and how they are resolving the contractual issues due to the unique nature of the impact of the pandemic. That has not fully played out yet, and it is not clear in all cases what the final impact will be. In some councils, we know that the impacts have been relatively limited due to the point that they were at in the capital programme; in other projects, the potential impacts have been relatively larger.

Through the Scottish Futures Trust, we are working closely with councils to try to get a detailed view of what the impacts are, and how they affect different programmes in different areas of the county. We have agreed to report back to ministers and COSLA through the joint finance working group for the programme, so that we can understand the impact before making any decisions about how it is resolved.

All I want to know is what share each local authority got—as of the counting date, whenever that may have been—from the original allocation of £476 million for the programme, which is their allocation from the Scottish Government. How much of it has been spent so far? How much of the allocation to the local authority is for provision in the public sector, and how much is for provision in the PVI sector?

In relation to what Maree Todd said about state aid rules, surely the rules are the same all over Scotland. If some local authorities are managing to handle providing assistance to the PVI sector within state aid rules, why can other local authorities not follow their example?

On the state aid question, we know that each council takes its own legal advice in relation to its procurement requirements and the interpretation of its statutory duties as a properly constituted local authority. It very much depends on the arrangements that councils have put in place. It is certainly possible for them to provide capital funding—some councils have done it, but others have said that they do not feel that they can, or they are not willing to do so.

Various councils have been able to provide capital funding, although it usually comes with significant governance around it, to ensure that the money is used appropriately, and there is a covenant or similar with the provider with regard to what has been provided. The provision of funding is possible—it has been done by some councils, and we can provide details on that.

My point is that state aid rules are not different for each local authority. There might be a different legal interpretation of what is required in each local authority, but the state aid rules are not different. So, given that some local authorities have successfully operated within the state aid rules in helping the PVI providers, why can the other local authorities not do the same? I would have thought that just taking one set of legal advice on the issue at a national level would have been advisable, because, clearly, the state aid rules between one local authority and another do not change. If one authority can provide support, why can others not do the same?

I will come in on that. I think that Mr Neil knows that I cannot direct local authorities with regard to what approach they should take. I can put in place a national framework and say what they are expected to deliver, but it is down to local authorities to decide how to do that.

During the expansion, we worked closely with all local authority partners and shared good practice. Navigating state aid rules is challenging, and there are questions of how much risk individual local authorities are willing to engage with. That might be one of the reasons for the variation in the country. Where local authorities were able to successfully navigate the process, we shared those examples. However, it really is down to local authorities to choose how to engage with those difficult issues and put in place the governance to deliver for their constituents.

That is my point. The local authorities who have done it successfully should share how they have done that with the others, because there should be no difference—the state aid rules are the state aid rules. Obviously, there is a suspicion that some authorities might be hiding behind their interpretation of state aid rules and using that as an excuse for not giving assistance to the PVI sector. I am not making any allegations when I say that, but I know that some people in the PVI sector believe, rightly or wrongly, that that is the case. It seems that there is an issue that it is reasonable to address.

My final question relates to the funding rates per hour from the Government to the local authorities. Obviously, we are looking ahead to the next three or four years. Is an uplift in the hourly funding rate, to take account of wage inflation, general inflation or whatever, built into the budget assumptions of the Scottish Government?

When we arrived at the funding agreement with our local authority partners, we built in assumptions around inflation and population predictions. Those issues were certainly taken care of in the total sum that we delivered to local authorities.

Alison Cumming can give you a bit more detail on that.

As the minister said, we built an inflationary assumption into the multiyear revenue agreement for the expansion to 1,140 hours. That five-year agreement runs up to and includes the 2021-22 financial year. We are opening discussions with COSLA regarding funding from the 2022-23 financial year onwards.

Within that, there have been some questions around whether, therefore, inflation-rate uplift should be applied to the payments that local authorities make to PVI providers. We have confirmed on, I think, a couple of occasions to local authorities and providers that that inflationary uplift is in the settlement and should also be passed on in terms of the way in which sustainable rates are set for local authorities. That is reflected in the Scotland Excel guidance that I referenced earlier.

As a supplementary to that, is the assumption about inflation based on the retail prices index, on the consumer prices index or on some other measure?

12:00  

My recollection is that the assumption was based on the gross domestic product deflator, which is the measure that we tend to use for public funding.

We talked in the focus group this morning about the spending caps that some local authorities apply to private providers. How does the inflationary model work if a cap is in place? Will the cap deflate the value of what can be provided to PVIs over time?

That goes into the detail of local authority procurement models, and I ask Alison Cumming to give a little bit more detail around that.

In general, caps or budgets would be applied only to specific procurement approaches for private provision. We would expect that any local authority procurement arrangement that involves an upper spending limit would take account of inflation. That would mean that the same number of hours could be procured throughout that period.

It depends on individual local authority procurement approaches, but the principle is that—whatever the procurement approach—provision should be made for inflationary uplifts.

We will move on to the final questions, which will be from Jamie Greene.

Thank you for bringing me in at the end of the session, convener.

The issue of support for parents of children who have additional support needs is one that we have not had much time to cover, but it is an important one. We received a submission to our survey from a parent who has a child with autism spectrum disorder. They are yet to receive the full entitlement to childcare. The gentleman said that his wife had to leave her job to provide care, due to the lack of hours on offer, only to be informed that the full allocation of hours was offered only to children whose parents work. That sounds like a chicken-and-egg scenario.

What is the Government’s overall approach to ensuring that, as councils roll out the additional hours, there is provision for children who require dedicated care and attention and may need one-to-one care with the childcare provider?

It is not a feature of the Scottish scheme that the entitlement is available only to parents who work. However, you will know that that is a feature of the scheme that is in place in England, where your Conservative colleagues have made 30 hours of childcare available only to those who work. We recognise that—

The question relates to Glasgow and Glasgow City Council; it has nothing to do with south of the border. I am raising the question because it came from one parent’s submission.

Let me be absolutely clear: we do not want the offer to be available only to parents who work. We recognise how important it is for parents who want to study, for example, and for supporting families. I have heard directly from, for example, kinship care families that the support package that 1,140 hours offers has literally meant that the family can stay together.

We are not targeting the provision only at families who work. That can only have been a feature of the local authority’s prioritising of resources during the pandemic.

You asked about additional support needs. For a number of years, we have operated an early learning and childcare inclusion fund that settings can apply to. They can get grants to support practitioners in a variety of ways. For example, I visited a nursery in West Dunbartonshire where I met a fabulous wee lass called Rufaro, who has Down’s syndrome and uses Makaton for communication. Her one-to-one practitioner was able to study Makaton as a result of the Government’s grant to that setting, which completely transformed Rufaro’s ability to take up the offer of 1,140 hours.

I would absolutely expect local authorities to work with families to understand the needs of the individual child. The child has a right to education, and I would expect local authorities to put in place what that child needs to be able to flourish in their early learning and childcare. Government support is also available through the inclusion fund.

I read through the details that came from the committee’s parental survey, and I was pleased to see that there were so many positive responses. Obviously I am disappointed that some parents are experiencing real challenges, but I am sure that you would agree that many of the constraints that they face relate to Covid rather than the fundamental design of the 1,140 hours policy. Covid has placed constraints on the way in which the policy can be delivered this year, but I would expect that, as we progress through the current challenge—which we are still dealing with every single day—and come out the other side, provision will continue to evolve and improve for the parents and children who are accessing it.

I draw the session to a conclusion and thank the minister and her officials for attending the meeting. We look forward to receiving correspondence on some of the areas on which she has agreed to provide more information to the committee.

12:07 Meeting continued in private until 12:46.