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Chamber and committees

Meeting date: Wednesday, March 9, 2022

Education, Children and Young People Committee 09 March 2022

Agenda: Interests, Subordinate Legislation, Coronavirus (Recovery and Reform) (Scotland) Bill: Stage 1


Subordinate Legislation

Provision of Early Learning and Childcare (Specified Children) (Scotland) Amendment Order 2022 [Draft]

Item 2 is evidence from the Minister for Children and Young People on the draft Provision of Early Learning and Childcare (Specified Children) (Scotland) Amendment Order 2022. I welcome the minister and her Scottish Government officials Eleanor Passmore, deputy director for early learning and childcare, and Carolyn O’Malley, solicitor with the Scottish Government legal services directorate.

I invite Ms Haughey to speak to the draft order.

Thank you convener. Good morning to you and the committee.

This amending order will increase the income thresholds for families with a two-year-old who is eligible for funded early learning and childcare—ELC—because they get a joint working tax credit and child tax credit or a universal credit award.

The relevant order currently specifies that a two-year-old is eligible for funded ELC if: their parent is in receipt of child tax credit and working tax credits, with an annual income that does not exceed £7,500; or their parent is in receipt of universal credit, with a monthly income that does not exceed £625 per month.

The amending order will increase the income threshold to £7,920 per year for households in receipt of both child tax credit and working tax credit. The universal credit income threshold will increase to £660 per month—the equivalent of £7,920 per year.

We are making the change to reflect changes at the United Kingdom level. The UK Government has increased the national living wage from £8.91 per hour to £9.50 per hour. That means that household income would exceed the current thresholds if they remained the same.

The purpose of the order is to protect eligibility for two-year-olds whom we would expect to be eligible for funded ELC as a result of their parents or carers being in receipt of the affected qualifying benefits. If we choose not to make changes to the income thresholds, we estimate that around 1,000 eligible two-year-olds would no longer be eligible, despite there being no significant difference in their families’ household circumstances.

It is important to be clear that no two-year-old who is currently receiving funded ELC will be affected by the changes. Once a child has met the eligibility criteria, they remain eligible despite any subsequent change in circumstances.

As the purpose of the amendment is to maintain eligibility, we do not anticipate a significant increase in the number of two-year-olds who become newly eligible for the provision, and we do not expect a significant impact on local authorities’ ability to fund the provision within the current financial settlement.

There is no evidence that additional funding is required to support implementation of the amendment. However, the impact on uptake will be closely monitored by the Scottish Government and the Convention of Scottish Local Authorities through the appropriate mechanism—the ELC finance working group—and appropriate arrangements will be made if uptake is significantly above the level expected and local authority costs increase as a result.

As I mentioned on my previous visit to the committee to amend the thresholds, we will monitor future increases to the national living wage and we will uprate thresholds when required, to keep pace with changes. COSLA agrees that the approach is necessary to maintain a similar profile of eligible children.

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

Thank you, minister. I invite questions or comments from members. I understand that the change is driven solely by the increase in the national living wage—is that right?

Yes, and the changes in child tax credit and working tax credit rates.

Thank you. I see that Willie Rennie wants to comment.

We have explored the take-up issue before. I have no issue with the technical changes to the amounts, but I feel that the take-up for two-year-olds still seems to be lagging way behind where it should be. It was 11 per cent in 2019, 9 per cent in 2020 and 13 per cent in 2021. Although there has been an increase in take-up, which is good, the figure is still nowhere near the 40 per cent that is the estimated percentage of two-year-olds who would be entitled to the offer. I know that there were issues with regard to identifying the right young people and getting them into the system. Can you update us on any progress that has been made in that respect?

Yes, Mr Rennie. I know that we have looked at the issue before. You have rightly stated that, according to the latest figures, which are for September 2021, the uptake was 13 per cent, but I should point out that we are talking about the total population of two-year-olds. In order to increase the accuracy of the data on the children who are eligible to access the offer to two-year-olds, we have been working closely with UK Government colleagues on improving data sharing and developing a legal data gateway and an agreed data flow between the Department for Work and Pensions, Her Majesty’s Revenue and Customs and local authorities. The UK Government’s consultation on the secondary legislation that will be required to put the gateway and data sharing in place closed last week—on Friday, I believe. We will be looking at the outcome of that consultation with UK Government officials and colleagues and requesting that they work quickly with us to get the data-sharing mechanism in place.

Will it be possible to get that up and running by September, when the uptake will be measured again?

That depends on the UK Government and when it is able to—or wishes to—proceed with legislation. However, we will certainly work closely with it on the matter. There has already been a huge amount of co-operation between Scottish and UK Government officials.

Are there any barriers in principle to the data sharing, or is it just a matter of working through the technicalities? Why is it taking so long?

We have been working closely with the UK Government. It is aware of the issues that we have with the data sharing and that we are keen to access that data so that we can promote the ELC offer for two-year-olds to some families who might not be aware that they are eligible.

That is fine.

I think that Willie Rennie was asking whether there was any other barrier than the technical aspects.

That is the barrier with regard to the data sharing. As we wait for that data, we have also been working to ensure that parents and carers are aware of eligibility and, obviously, aware of the advantages of accessing quality ELC for eligible two-year-olds. In that respect, we have been working very closely with our local government colleagues, health colleagues on the health visiting pathway, family nurse practitioners and the third sector to promote the ELC funding offer to eligible two-year-olds.

But you cannot underestimate the value of the data that you have referred to in enabling you to accomplish your objectives.


Are you satisfied with your working relationships with ministers and officials at the DWP?

We have certainly been working very co-operatively with them. We hope that, now that they have the feedback to their consultation, they will work at pace on the matter.

So, you are satisfied. I call Michael Marra.

I have no problem with the instrument as it stands, but I noted your comments on the relationship between uptake and local government funding pressures. In going through the process, do you monitor or assess the sector’s financial health and the sustainability of the businesses in the area to ensure that access exists?

Are you talking specifically about access for eligible two-year-olds or more generally?

More generally. After all—and in line with Willie Rennie’s questions—if the nursery is not there, eligible two-year-olds will not be able to access the offer. Do you undertake any exercises to understand the health of the sector?

Yes. The Scottish Government carried out a financial health check last August. Eleanor Passmore might be able to give you a bit more detail about what was asked of the sector.

That is correct. We carried out what was, in effect, a survey of the sector that looked specifically at financial sustainability issues. That survey was published last year and we have undertaken to carry it out annually. We are very alive to some of the issues that the sector faces; indeed, earlier this week, we launched the omicron sector impact fund to deal with specific impacts that have been very much live over this particular period of the pandemic.

It is just that a couple of fairly large nurseries in my area have closed, which has created a lot of problems for people. I recognise that some of that is to do with behaviour changes in families, but such closures make the business models perhaps less sustainable than they previously were. It feels like a moment of fairly major change in how people are accessing childcare and nursery education, but you think that that has been taken on board in the work that has been done.

Yes, and the Care Inspectorate routinely publishes data on closures, too. I can come back to you with the exact figures, because I would need to check them, but I think that the figure of around 1.5 per cent that we are seeing is consistent with previous trends. We have not seen a significant increase in closures during the pandemic, although the most recent data that we have is unfortunately from late 2020. As I have said, we are carrying out an annual health check in the interim to keep a very close eye on sustainability and the factors that are driving it.

It would be useful to have that data.

Do members have any more questions?

Yes, convener, since we are broadening things out a bit. I will try not to take up too much time.

We have had meetings with representatives of the private sector, who are deeply alarmed by what is almost an exodus of staff from private to council nurseries and the threat to the sector’s viability. The health check that you have mentioned is really important, but I am still not sure that the Government understands how severe the situation is for those businesses. It is important to ask about that not just because of the capacity that private nurseries offer but because of the flexibility that they provide, which council nurseries sometimes cannot. It might be useful if you were to write to us with the steps that you are taking to address that exodus of staff, which is related to the funding that the private sector has received. I am aware, though, that we are probably straying from the central purpose of the instrument.

Do you want to comment on that, minister?

I am certainly aware of the private, voluntary and independent early years sector’s concerns about staffing and the movement of staff between different settings. The issue has been raised with me and my officials in our meetings with the sector and we are alive to it. We have taken steps to support the sector and I am more than happy to write to the committee to outline those steps in more detail.

That would be very useful. I am sure that we will have you back on another occasion to talk more widely about those areas of interest.

We move to agenda item 3 and I invite the minister to move motion S6M-02961.

Motion moved,

That the Education, Children and Young People Committee recommends that the Provision of Early Learning and Childcare (Specified Children) (Scotland) Amendment Order 2022 be approved.—[Clare Haughey]

Motion agreed to.

The committee must now produce its report on the draft instrument. Are members content to delegate responsibility to the deputy convener and me to agree that report on behalf of the committee?

Members indicated agreement.

I thank the minister and her officials for their attendance and suspend the meeting to allow them to leave.

09:14 Meeting suspended.  

09:15 On resuming—  

Police Act 1997 and the Protection of Vulnerable Groups (Scotland) Act 2007 (Fees) (Coronavirus) Amendment Regulations 2022 (SSI 2022/34)

Our next item of business is further consideration of subordinate legislation. Do members have any comments on the regulations?

I seek clarification from the minister about a point that was raised with us by the Scottish Private Nurseries Association, which represents private nurseries and those that operate in the voluntary and third sectors—that is, nurseries run by charities.

The SPNA seeks clarification on whether the benefits of the provision—the waiver of disclosure fees and of liability to pay certain fees—applies to nurseries that are in private or third sector ownership, as well as to local authority nurseries. If the principle is that the disclosure fee should not be payable, I assume that that would apply across the board.

We received the letter from the SPNA only in the past day or so, or we could have raised the matter with the minister before. It would be helpful if clarification could be provided on that point.

The Scottish Private Nurseries Association got in touch with us and raised the questions that Fergus Ewing is seeking answers on. As the instrument is subject to the negative procedure, we do not have a minister before the committee. We have not had time to get a satisfactory answer to the questions, which raise entirely legitimate concerns on the part of the sector.

I propose that we write to the minister and seek clarification of those matters. We can then decide, before the appropriate deadline, how to proceed. Is the committee content with that approach?

Members indicated agreement.

09:17 Meeting suspended.  

09:18 On resuming—