Chamber and committees

As a result of the ELC expansion, the average rates that are paid to providers to deliver funded ELC to three to four-year-olds have increased by 57 per cent since 2017. The average rate that is paid for three to four-year-olds by Scottish local authorities is the highest in the UK in 2023-24, at £5.77 per hour, compared to £5 per hour in Wales and £5.15 per hour in England.

This has been an important debate. It is critical that we put on record the significant collective achievement of delivering 1,140 hours and again thank our partners in local government, as well as the private, third and childminding sectors for all their hard work in making such a success of the expansion so far. I am particularly proud that the offer is available to all eligible children, regardless of their parents’ working status, meaning that Scotland has the most generous childcare offer in the United Kingdom today. I will continue to make the case that children’s needs must always come first.

It is testament to the efforts of everyone in the sector that we now have near-universal uptake among three and four-year-olds: 99 per cent in the latest published statistics. It is also good news that the number of two-year-olds who are registering for funded ELC is at the highest-ever level. I am pleased that we have secured a legal gateway with the UK Government that finally means that local authorities in Scotland will be able to access the information that they need to contact eligible households later this year. That will make a real difference to levels of uptake, and my officials are working closely with councils to support them to reach as many families as possible.

I am also delighted to read about the positive experiences that families are having with funded ELC. Quality and flexibility are at the heart of our 1,140 hours offer, and survey results that were published in December show that we are delivering for families. As many as 97 per cent of parents are satisfied with the quality of the funded hours that their children access, and more than 88 per cent of parents are satisfied that they have the flexibility to use their funded hours in a way that works for them.

There has been discussion about the rates that are paid to providers. I reiterate that, throughout the expansion to 1,140 hours, we have used the significant public investment that we have made in funded ELC—it will be almost £1 billion in 2023-24—to seek to support and improve conditions across the private, voluntary and childminding workforce that delivers this vital service.

We have debated the issue in committee. I cannot remember whether, when Mr Rennie raised it there, I referenced the most recent ELC census that was published in December. He mentioned a reduction in the services that provide funded ELC. The census found that there has been a reduction of 1 per cent, so there has not been the mass closure that some people might have heralded. I am not accusing Mr Rennie of that.

I appreciate that, for providers, conditions are challenging, particularly as a result of the pandemic and the cost crisis. That is why we are continuing with the nursery rates relief scheme, which provides 100 per cent relief on non-domestic rates to eligible day nurseries beyond 30 June this year. It is worth noting that the temporary discount on rates for nurseries in England ended on 1 April 2022.

We are also developing a programme of tailored support to enable childcare providers to access specialist advice on strengthening and diversifying their businesses. I would like to take a moment to recognise the unique and invaluable role that childminders play in delivering high-quality funded ELC, which Mr Choudhury spoke about. Recent years have been challenging for childminders, but we continue to work closely with our partners, including the Scottish Childminding Association, to increase the number of childminders in Scotland through the implementation of the Scottish Government report entitled “Our Commitment to Childminding in Scotland”.

I hear what the member says, but I do not accept the premise that ELC is failing or that it is in crisis in the way that she describes.

Scotland is the only part of the UK to have made a commitment to paying staff the real living wage for the delivery of funded ELC, and we have made real progress. Before the expansion, approximately 80 per cent of staff who were delivering funded ELC in the private and third sectors were paid less than the living wage. In contrast, our 2021 health check indicated that 88 per cent of private providers intended to pay the real living wage to all their staff from August 2021.

Our investment in sustainable rates is also critical to enabling employers to pay the real living wage to professionals who are delivering funded ELC, and to ensuring the quality and sustainability of provision.

We must recognise that the childcare industry is a mixed economy and that employers in the private and third sectors are responsible for the business decisions that they make. Public funding accounts for only 33 to 45 per cent of the overall income of private childcare services.

The Scottish Government has worked closely with the Convention of Scottish Local Authorities because we would not have been able to roll out the 1,140 hours without working with it and the PVI sector. What does Martin Whitfield suggest that the Scottish Government do over and above what we have done already?

I absolutely recognise that that is an area that Mr Rennie and I have had correspondence on for some time. I am delighted that we got the data-sharing arrangements in place. I think that the legislation went through the UK Parliament in October. We are working with local authorities and COSLA to help them to make maximum use of that data, and we hope that they will be able to access it by the end of this financial year.

I am happy to talk Mr Rennie through the process of how that will work, if that would be helpful to him. In relation to the two-year-olds, local authorities will get access to a limited amount of Department for Work and Pensions data three times a year. Local authorities will only be able to access the amount of data that they need to identify those families who would be eligible, which will give them the opportunity to write to those families to make them aware of that offer. They will only be allowed to use that information for the specific purpose of targeting those groups. We will continue to publicise the offer through the Parent Club and other Scottish Government channels.

I will be happy to come back to the committee on that next year. We anticipate that there will be an increase, and there is funding in next year’s financial settlement to fund those eligible two-year-olds. The rate has gone up again. It has gone up to 14 per cent, but I appreciate that there may well be more children out there whose parents are not aware of the offer. I am sure that I will come back to the committee on that issue.

I do not recognise what the convener said about top-slicing.

We are engaging with the SSSC on the possibility of having the scoping and mapping exercise. I am more than happy to write to the committee with updates on that.

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?