Chamber and committees

The sustainable rates that local authorities pay take into account investment in staff, investment in training and paying the real living wage. We have influenced pay in the PVI sector—that has been evidenced in the pay rates that staff in that sector have received since funded ELC has expanded. We are carrying out another financial sustainability check, and I believe that the survey went out last week. We will be in a position to report on that in the spring, when we will have a much more up-to-date picture of where private, voluntary and independent providers are.

Mr Rennie talked about flexibility. I draw his attention to the parent survey that was published just last month—I appreciate that that was a busy month for all of us. In the survey, 88 per cent of parents of three to five-year-olds and 92 per cent of parents of eligible two-year-olds reported that they were satisfied with the flexibility that was offered to use their funded hours to meet their family’s needs. That is evidence that families feel that they are getting the flexibility that they need. Overall, 97 per cent of parents said that they were satisfied with the quality of provision. That is a great tribute to the services that ELC providers offer to our children and families.

Does Eleanor Passmore want to add anything on the pay differential and the work that we are doing with the PVI sector to help it to retain staff?

As a Government, we provide the funding to ensure that we can provide 1,140 hours of ELC to all eligible children, which is what we do. A huge amount of money is provided to local authorities to sustain and fulfil their statutory obligations to provide the 1,140 hours of ELC. As I mentioned in an earlier answer about the parent survey, parents are satisfied with that.

In the past year, there has been an increase in the number of three to five-year-olds who are accessing early learning and childcare. It is now up to 99 per cent, which is almost universal coverage.

Our responsibility as a Government is to ensure that we fund those 1,140 hours of provision and that we allow local authorities to have the funding to pay sustainable rates to the PVI sector.

I thank Ruth Maguire for her question. She will be aware that we responded to the committee by letter on the specific asks that it made in its inquiry on ELC and pay and conditions, and on the request that we perform a mapping exercise.

Currently, no national data is available on the movement of staff across the sector. We have therefore asked the Scottish Social Services Council, which is responsible for collecting the relevant information, to explore the possibility of providing such data. It is not collected across local authorities reliably enough to enable us to map the committee’s concerns about the movement of staff.

The committee should be aware that the Scottish Government pays the highest average funding rates in the United Kingdom: between 2017 and 2022, they increased by 57 per cent, which is higher than the figures for Wales and England by quite some way. To put that into context, when the expansion of early learning and childcare began in 2018, about 80 per cent of staff employed by the PVI sector were paid less than the living wage. In contrast, our health check in 2021 indicated that 88 per cent of providers intended to pay the real living wage from August that year. We have seen quite considerable differences there.

It is also relevant for the committee to be aware that Scottish Government funding accounts for about 33 to 45 per cent of the overall income of private childcare services. It is a mixed economy, and there are business decisions for the PVI sector to make about staffing.

We work closely with the Convention of Scottish Local Authorities and, through the finance working group, we have worked intensively with COSLA to ensure that the investment of almost £1 billion that we are making in ELC in the next year is distributed fairly and that PVI providers are paid a sustainable rate—that rate has gone up by an average of 6.1 per cent over the past year. I hope that that assures the committee that we are listening and responding to your concerns.

Before the expansion of 1,140 hours, one of the issues that the Scottish Government consulted on was different models of support for delivery of ELC. That consultation happened between October 2016 and January 2017, and it included the model that the convener has alluded to.

The independent consultation analysis report that was published in March 2017 highlighted that the funding follows the child model was identified most frequently as the preferred model for best supporting the provision of high-quality ELC that is accessible and affordable for all. We see evidence of that in the figures that are coming out on the number of children accessing ELC and on parent and carer satisfaction about the quality and flexibility of the service that they receive.

As I said earlier and as Eleanor said, it is a mixed economy. The principle of the funding following the child means that parents are able to decide where they wish their child to receive early learning and childcare. We believe that the funding that we provide to local authorities through the funding formula that we agreed with COSLA is enough to enable them to pay sustainable rates to PVI providers.

I am not familiar with those figures, but, if the convener wants to send me the source of the information, I will be happy to look at it.

When looking at the funding that is provided by the Scottish Government to local authorities, it would be simplistic to say that there is £100 available and there are 100 children so that means that £100 should be divided by 100 and each child should get £1. I know that that is a very simplistic example. From their budget, local authorities have to fund not only the ELC for PVI providers but additional costs. They have things such as property costs, including the repair and maintenance of buildings and settings, and their own employee costs—

Local authorities are local authorities—if I can put it that way—but PVIs are businesses, so they have other sources of income.

Local authorities have additional costs such as other staff—operational staff, heads of centre and staff who do not count towards childcare ratios, including additional support for learning staff—support services such as information technology, finance and procurement; and the cost of meals for children who access both council nurseries and PVI providers. The latter cost is paid to PVI providers over and above their sustainable rates.

In the current settlement for next year, there is money for the deferrals policy change, which I am sure the committee is aware of, and for the equity and excellence leads. Local authorities have a statutory duty to provide 1,140 hours; they can be providers of last resort in areas where it is not financially sustainable for private services to provide childcare, and they have a duty for emergency responses, which they have carried out for those coming from Ukraine.

It is therefore not as straightforward as saying that providing 30 per cent of childcare equals passing on 30 per cent of the budget.

We have worked very closely with COSLA and local authorities through our financial working group to ensure that there is a fair and sustainable settlement for all our ELC providers.

If I remember correctly, you raised that issue in the chamber, convener. The issue was also raised during the debate about funded ELC. This is where the funding follows the child model is absolutely key.

I will ask Eleanor Passmore to speak about the work that we have done. If there are particular areas in which there is an issue, I would certainly like those to be highlighted to me so that we can try to facilitate working across boundaries.

The draft budget makes provision for £50 million to be invested in the whole family wellbeing fund. That will continue the vital preventative work that is required to keep children at home when that is the safest place for them to be.

In addition, we will invest almost £30 million in other activity that is related to the Promise, which includes funds to support The Promise Scotland, invest in the Promise partnership fund and take forward a variety of other actions that we committed to in the implementation plan “Keeping the promise to our children, young people and families”, which was launched last March. That includes funds that are required to bring into force the Children (Care and Justice) (Scotland) Bill, which was introduced in December 2022. I believe that this committee will look at that bill, so I am sure that we will have further discussions on that and how it will fulfil the Promise.

In line with the development of all policy that affects those with lived experience, the Scottish Government will engage regularly with service providers, children and young people and their families and carers, and with key stakeholders, in the development of pathways and service provision.