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Chamber and committees

Citizen Participation and Public Petitions Committee

National Day Nurseries Association submission of 23 December 2021

PE1907/B - Provide Funded Early Learning & Childcare for all 2-Year Olds In Scotland

About NDNA

National Day Nurseries Association (NDNA) is the national charity representing private, voluntary and independent (PVI) children’s nurseries across the UK. We are the voice of the 21,000-strong nursery sector, an integral part of the lives of more than a million young children and their families. NDNA Scotland is the national representative body for PVI nurseries in Scotland with eight networks covering 17 local authority areas.

NDNA provides information, training and advice that support nurseries and their 250,000 employees to deliver world-class early learning and childcare. Working closely with local and national government, we advise and campaign on the cost, choice and quality of childcare to benefit children, nurseries, families and the economy

Key recommendations from this report

  • Expanding funded ELC to all 2 year olds would be of benefit to children and families to support child development and family welfare.
  • Access to funded ELC can support parents and carers to return to work or increase their working patterns and contribute to local and national economies.
  • Funding rates must be sustainable and meet the real costs of providing childcare
  • Sustainable funding rates must be in place in order to ensure providers can recruit and retain staff at an equal level to local authorities
  • Real partnership working between local authorities in line with the principles agreed by NDNA and COSLA (and adopted by other key stakeholders) in the Principles of Partnership Working.

Background Information

  1. In August 2015, the Scottish Government expanded the eligibility criteria for 600 hours funded childcare to cover two year olds if they were, or ever had been since their second birthday looked after, subject to a kinship order, or had a parent-appointed guardian. Prior to the Covid-19 pandemic, the plan had been to extend this offer from 600 hours to 1140 hours from August 2020. The expansion has now taken place in August 2021.
  2. Eligible two year olds are from potentially less advantaged backgrounds and are eligible because a parent is on certain benefits. The child will remain eligible regardless of whether or not the parent remains on benefits.
  3. In Sept 2018, the Scottish Government launched an improvement plan to improve the uptake of funded two-year old places. In Sept 2019, around 3674 (1) two year olds were receiving 600 funding which was slightly below the expected 3905. The Scottish Government (2) stated that this is just slightly over a third of eligible two year olds, with Audit Scotland suggesting there is room for improvement in the uptake of funded place for eligible two year olds. More recently, however a government report (3) shows that there has been a year-on-year increase of 26% in the numbers of eligible 2-year-olds accessing funded ELC, up from 4,711 in August 2020 to 5,954 in August 2021.
  4. The criteria for eligibility focuses on three main areas: care arrangements, income support, child tax credit. When the statutory duty for expansion comes back into force (removed during the covid-19 lockdown period(4)) there will also be eligibility for two year olds who have a care-experienced parent.
  5. Scottish Government report (5) indicated that some parents chose not to take up their two-year old place because they felt their child was too young. However, the report also identified that there were three structural barriers to using their ELC entitlement: lack of knowledge of entitlement (22%), available providers (21%) and a lack of choice in available opening hours (19%).
  6. These barriers addressed in a report, by the Scottish Government (6) with evidence showing that parents were relying predominantly on word of mouth or from personal contact with another professional, such as a family worker who would provide information. Most parents were unaware of official communication promoting the free ELC for two year olds. The conclusion of this was that the opinion of other professionals, family and friends were influential in promoting ELC.
  7. This report identified what the parents perceived as benefits to children of funded ELC as opportunities to improve their child’s social and language skills. With a focus on developing strong healthy loving attachments, learning to share, communicate effectively, positive behavioural changes, and general learning opportunities.
  8. The benefits to parents of children, who are eligible for two year old funding were the opportunities to take a break, catch up with chores, work, train or study. Some suggested it was very beneficial to have time to go shopping, go to the dentist and socialise with other parents.
  9. This and previous research, by the Scottish Government, suggests that getting the promotion of the ELC funding for eligible two year olds right is the key to increasing uptake. Along with local authorities other professionals and services who work with families who have contact with eligible families can have a significant role in promoting this Eligible twos scheme.
  10. In the Program for Government for 21-22, the Scottish Government committed to Work to expand funded early learning and childcare for children aged 1 and 2, starting with low-income households within this Parliament In the coming year we will start engagement with families, the early learning sector and academics to design how the new offer will work.
  11. Survey findings from a recent report (7) showed that there were significant impacts upon babies who were born during the first and subsequent lockdowns. There is wide ranging research, which indicates the importance of the first 1000 days of a child’s life to their emerging development. It is widely researched that if in this period, the child has social experiences, where they are loved and nurtured then there will be a positive impact upon their emotional wellbeing, resilience and adaptability. In short, they need these to thrive. Parents also reported that the lockdown made parenting difficult and that they were worried about the impact of the pandemic on their young children.

Currently there is still little evidence of what the impact of the pandemic will be upon babies and pre-school children, but what is clear is that babies need stimulation, social contact and responsive caregiving to thrive. Parents have struggled throughout the pandemic with 25% of parents reporting concern about their relationship with their baby and a staggering 87% stated they were more anxious because of Covid-19 and the lockdown. Many parents said that they felt isolated and lonely and 68% felt their ability to cope with their baby had been impacted. The impact on children was equally concerning with parents reporting significant changes in their babies behaviours, with 19% saying that sleep patterns had changed, 34% feeling that interactions between parent and child had changed, 47% reporting that their baby had become clingier, and 26% saying their child cried more than usual. The report could not state what exactly caused these changes, however it is clear that there will be an impact upon child development and the lack of social opportunities through attending nursery for both parents and children plays a significant role in support that would normally be available.

Realising the Ambition: Being me! (8) clearly sets out the benefits of early learning and childcare for children from babies to pre-school. For babies the focus is on building relationships with a number of different people. When they experience warm, loving and responsive relationships, they build their resilience and adaptability to their world around them. When the baby becomes more mobile, they crave more independence In the ELC setting; the young child can explore, build secure relationships beyond their family network and gain independence to explore their world fully. ELC provides wide-ranging opportunities for the child to develop their skills and knowledge through activities and interactions, which allow them to work through cycles of actions and repeat learned development. The opportunity to develop self-regulation also comes with repeated interactions with a number of different people. Interacting with lots of different children offer these opportunities for developing social and self-regulating skills.

The paragraph above barely scrapes the surface of the benefits of ELC for babies and infants and with the UN saying “While children are not the face of this pandemic, its broader impacts on children risk being catastrophic and amongst the most lasting consequences for societies as a whole.” (UN Briefing Paper, 2020) it is clear that ELC has a role to play in supporting parents and children recover from the pandemic. Making funded 2-year-old provision universal would be beneficial to parents and children in order to support children’s development and provide much need pastoral and social support to parents and carers.

11. NDNA have worked alongside Scottish Government and the COSLA to support the delivery of funded ELC and engagement with PVI providers, as they are important for delivering ELC which is of high quality, flexible, accessible and affordable. We support the principle of Funding Follows the Child and the provider neutral approach and we have worked together with COSLA to develop the Principles of Partnership Working, which adopted in 2021 by other key stakeholders. It would be important to engage with all key stakeholders to ensure strong and effective partnership working around any proposals to expand the funded ELC offer.

12. However, there are implications for the PVI sector of increasing the funded offer to all 2-year-olds.

13. We have long argued on behalf of our members that the sustainable funding rate for funded ELC for 3 – 5 year olds does not meet the cost required to cover an hour of childcare. As settings are required to deliver funded childcare to parents at no cost to the parent, as a requirement of the National Standard (9), there is little room for making up the shortfall caused by low funding rates. At present this cost is often made up by the parent paid childcare of the under 3’s.

Our sustainability survey (10) showed that the Scottish Government is the largest purchaser of childcare hours. When we asked providers to provide a breakdown between funded ELC hours and those that were paid by parents, providers told us that an average of 55.2% of hours were funded by the Scottish Government, meaning that 44.8% were still paid by parents directly. Any underfunding of these places will have a greater impact on the sustainability of nurseries and the viability of children’s places.

Currently , according to a Scottish Government report, 25 local authorities pay £5.31 per hour for ELC funded childcare (with the rest ranging from £5.05 to £6.40) and 18 local authorities paying over £6 for an hour of childcare for eligible twos (with the rest ranging from £5.05 to £8.50). As 2 year olds require more specialised care and support and also the requirement for a higher adult to child ratios (under 2’s –s 1 adult to 3 children, and 1 adult to five children for under 3’s and 1 adult to 8 children from under 5’s (11)) there will inevitably be more staff required. This explains why the hourly rate for providing care for 2 year olds is higher than that of 3 -5 year old places. In a quick poll of NDNA Scotland members, the average amount that an hour of ELC was underfunded was given as £1.40 per hour. If this rate were to be reproduced for all 2-year-olds it would seriously challenge the sustainability of the PVI sector to provide these places. If nurseries and childminders do not have a sustainable business model they will not be available to provide places for children aged 2 and under.

There is also still currently a crisis in the ELC workforce. The covid-19 pandemic and the expansion of funded ELC to 1140 hours has put enormous pressure on the workforce. In recent research alongside the Education Policy Institute (12), NDNA looked at workforce challenges facing the sector. Analysis of responses from settings in Scotland shows that 76.1% of settings had tried to recruit staff in the period from March to May 2021. The majority had tried to recruit staff with SVQ3 and SVQ4 level qualifications but 71.4% reported it difficult or very difficult to recruit at SYQ3 level and 91.7% said the same for SVQ4. Respondents cited increased competition for staffing where local private and voluntary providers are unable to compete with local authority salaries on the sustainable rates they receive for funded children. An increase in additional staffing requirements for universal childcare for 2 year olds will make this crisis worse.

Finally, there is deep concern over rising costs such as inflation and increases to the real living wage. In our survey, we asked what the expected increase in staffing budgets would be this year once the statutory minimum wage increase, the real living wage and other staffing considerations put into place. The average reported increase was 10.4%. Our survey also showed that 55% or providers cited the funding rates they receive as a challenge to meeting the real living wage requirement of the National Standard. These additional increased costs coupled with unsustainable funding rates would become more of a challenge if there were a requirement to provide funded places for all 2 year olds.


The PVI sector is in a strong position to provide universal 2-year-old provision as settings are already providing care for families with children from babies to five years old.

Another benefit of PVI settings is that they are already established within local communities. They are also open all year around for hours that suit most parents. When it comes to children’s development PVI providers will often have children in their care from babies so can provide continuity of care and support for families.

The concern for the sector would be that any universal funded provision for 2-year-olds must be sufficiently funded at rates that truly reflect the cost of delivery, which is higher for 2-year-olds. Any funding agreement would need also require to be annually reviewed, to ensure hourly rates keep pace with changes in the cost of delivery.

PVI nurseries have experience and specific skills for providing this care and with sufficient sustainable funding and local authority support, they would be in a good position to support an expansion of universal funded ELC to 2 year olds.


1 Audit Scotland, Early Learning and Childcare: Follow up (March 2020)

2 Scottish Government (2017) The Expansion of Early Learning and Childcare: Evaluation Report 2017

3 Scottish Government (2021) Early Learning and Childcare Expansion Delivery Progress Report

4 Removal of Statutory duty

5 Supra n2

6 Scottish Government, Drivers and Barriers to Uptake of Early Learning and Childcare amongst 2 year olds, Children, Education and Skills. Social Research.

7 Best Beginnings et al. (2020) Babies in Lockdown: Listening to parents to build back better.

8 Education Scotland (2020) Realising the Ambition: Being Me!

9 Scottish Government (2019) Funding Follows the Child and National Standard

10 NDNA (2021) Stop Unsustainble Rates – Start Building Futures (Scotland)

11 Care Inspectorate (2018) Guidance on adult to child ratios in Early Learning and Childcare (ELC) settings

12 NDNA and EPI (2021) The Covid-19 Pandemic and the Early Years Workforce. Feb 2021 – May 2021 Staffing Decisions in an uncertain environment

Related correspondences

Citizen Participation and Public Petitions Committee

Scottish Government submission of 4 November 2021

PE1907/A - Provide funded early learning and childcare to all two-year-olds in Scotland