Chamber and committees

That was an excellent answer, to be honest.

You said that 75 per cent of placements are blended. The bureaucracy point jumped out at me. You said:

“the level of paperwork and bureaucracy associated with current childminding practice was the main reason that childminders had left the workforce”.

That was in 70 per cent of cases. It must be a tome that people are having to wade through if that is indeed the case. Perhaps you could comment on that.

While I am asking questions on this topic, I will ask about another thing that you have talked about, which is inconsistent local implementation. That is interesting. You said:

“some local authorities who understood the unique benefits of childminding had been supportive and were including childminders, but were in the minority”.

Can you talk to me about the bureaucracy and highlight some of the local authorities that are doing well and that other local authorities could copy in their methodology?

I will let Matthew Sweeney come in soon, because he has not spoken so far.

I appreciate that, if you have staff for 100 children and you get 98 children, you still have the same number of staff. I think that we all appreciate that.

In terms of the ELC finance working group, the new funding distribution formula will be based on the following split: 75 per cent on client numbers; 20 per cent on deprivation; and 5 per cent on rurality. You talked about figures set in 2014, but the figure that we have is that £39 million headroom was identified in the ELC-specific revenue grant, largely as a result of there being fewer children eligible for the entitlement now than was projected in 2018 rather than 2014.

From my perspective as, if you like, a layperson who is looking in on this, it is difficult to see how the spend can be monitored effectively if everyone has different methods of assessing how the funding is calculated. That is why I asked the question. I am sure that colleagues will want to explore that further.

I was on the Finance Committee from 2011 to 2016, and when we deliberated on the financial memorandum, the significant things included not only the difficulty in obtaining best estimates, but the tension that existed—as it often does—between the Scottish Government and COSLA as to how much should be allocated. It is interesting that, over the three years 2014-15 to 2016-2017, councils received £329 million of additional revenue to provide early learning and childcare, but they increased their spending on it by only £189 million. COSLA said that that did not account for the need for council efficiencies and so on, but that is a huge difference.

In 2018, a report highlighted inconsistencies in how councils compiled local financial return information. In the current financial year—I may as well include this in the question—more than £1 billion has been allocated, yet it looks as if expenditure is going to be £935 million. It appears that, throughout the process, the amounts of money that have been set towards the policy have been more than has been required. Is that the case or would you dispute that?

I go back to my initial question, which I do not think I received an answer to. Do you feel that the policy has been overfunded? The information that we have is that, every time there is an allocation, there always seems to be a surplus at the end of the financial year. That includes the current financial year. However, I note that the money is ring fenced, so it cannot be used for anything else. That seems a bit odd. If there is a £1,006 million allocation and a £935 million projected spend, that tells me that there is £71 million remaining. Can you talk me through those figures?

I have one more question and then I will open up to colleagues around the table. The issue of partner provision is interesting. A lot of partner providers have raised concerns about the roll-out of the policy because they feel that, in some areas, they have been squeezed by local authorities. For example, in Aberdeenshire, the amount of spending on partner providers increased from 20 per cent in 2018-19 to 36 per cent in 2021, whereas, in Moray, which you would have thought would not be that different in terms of rurality and so on—it neighbours Aberdeenshire—that spending went from 55 per cent to 43 per cent over the same time period.

Sarah Watters, can you talk a bit about the relationship with partner providers? I can see also that there is a differential between Orkney paying only £5 an hour for partner providers and West Lothian paying £6. Can you also talk about the impact on that sector and on childminding, which has declined by more than a quarter since this policy came in?

This is why we prefer people in the room.

Thank you very much. We will be sorry to see you go. I am sure that you said that just so that we would go easy on you for the next hour, but that is not going to happen—I am sorry. [Laughter.]

You touched on key issues that the committee will ask about. The first is inflation. One of the concerns about inflation is that the gross domestic product deflator of about 2.4 per cent is not realistic relative to the retail prices index. I see Professor Breedon nodding.

Understandably, we face a lot of public sector pay demands. There will be a real reduction in disposable incomes—in fact, we should note that there will be a reduction in nominal earnings before we think about taxation and disposable income. The overall figure for the economy is a 2.7 per cent reduction, but is there a difference between the private and public sectors?

Cabinet secretary, thank you very much for spending so much of your morning in responding to our questions. That ends today’s deliberations.

Yes, I can see him champing at the bit.