Meeting of the Parliament

Meeting date: Tuesday, May 1, 2018

Official Report 928KB pdf

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Early Learning and Childcare

The next item of business is a statement by Maree Todd on the agreement on a multi-year funding package for the expansion of funded early learning and childcare. The minister will take questions at the end of her statement.

14:27  

I am delighted to update the Parliament this afternoon on the agreement that this Government has reached with Convention of Scottish Local Authorities leaders to fully fund the expansion of the early learning and childcare entitlement to 1,140 hours from August 2020.

This landmark agreement is the culmination of more than two years of hard work by the Scottish Government and local authorities to establish a robust shared understanding of the costs attached to the expansion. It is evidence of real partnership working to deliver a shared ambition to give all our children the best start in life.

Responding to the agreement on behalf of COSLA, Councillor Gail Macgregor, who joined me for a fantastic visit to Cameron House nursery school in Edinburgh this morning, said:

“Local government is fully committed to early learning and childcare expansion to 1140 hours. COSLA and Scotland’s Council Leaders are fully behind the policy.”

She went on to say that the

“agreement by Council Leaders in agreeing the multi-year funding deal is a culmination of months of hard work, negotiation and real partnership working behind the scenes. We needed to get this policy right from the start, together with the level of funding. I think we have achieved this by working together.”

Under the agreement, the Scottish Government has committed to providing local authorities with revenue funding of an additional £567 million per year by 2021-22—the first full financial year of the expansion. That will bring annual public spend on early learning and childcare to £990 million.

In addition, the Scottish Government has committed to providing local authorities with total capital funding of £476 million over four years to support building projects to create new indoor and outdoor capacity that will deliver the expansion.

Those funding allocations will, of course, be subject to parliamentary approval of the Scottish budget for the respective years, but I hope that members of all parties can support this truly transformative investment in Scotland’s children.

The agreed funding package is the product of extensive work by the Scottish Government and local authorities to prepare robust cost estimates for the expansion. Local authorities submitted their initial expansion plans to the Scottish Government in September 2017. In March 2018, following a period of engagement, dialogue, challenge and refinement that built on the learning from an initial review of expansion plans, local authorities submitted refreshed financial estimates that form the basis of the package that was agreed on Friday. I am grateful to all those in local authorities who have worked tirelessly behind the scenes to prepare estimates and refine plans. The Scottish ministers and COSLA leaders considered the robustness of the estimates and, through negotiation, reached agreement on adjustments to be made to revenue and capital initial estimates in order to arrive at reasonable and evidence-based national funding totals.

I am confident that the joint review process and the compromises that have been made by both parties will deliver value for money. The agreed revenue funding package is the product of an intense period in which local authorities refined demand and supply estimates and associated service delivery models, which has reduced local authority estimates of the workforce requirements for the expansion.

The funding package ensures that a sustainable hourly rate will be paid to funded providers across Scotland who will deliver the funded entitlement to early learning and childcare. This landmark deal secures sustainable funding not only for local authorities but for early learning and childcare providers across the private and third sectors, including childminders, who are a critical component of our new model in which the funding follows the child. In particular, the deal bears out our commitment to provide sufficient funding to ensure that all childcare workers who deliver the funded entitlement will be paid at least the Scottish living wage from 2020. We recognise the valuable role that our early years practitioners play in shaping our children’s development, and I am proud that the funding package recognises that.

One of the most significant ways in which the expansion will contribute to closing the poverty-related attainment gap is through increasing the uptake of entitlement for eligible two-year-olds. We know that there is scope to improve on existing levels of uptake so that more children and families can benefit from the offer. The levels of revenue funding that were agreed with COSLA are sufficient to deliver a near doubling of the uptake among eligible two-year-olds, to 64 per cent. I warmly welcome local authorities’ commitment to put the resources in place to work with families to raise awareness of the entitlement and to help families to access such services.

We recognise that the funding package that was agreed last week represents our collective best estimate of the costs that will arise from the expansion at this point in time. It is, therefore, incumbent on all of us to continue to keep the estimates under review in order that we maximise the value for Scotland’s children and families from this investment. The Scottish Government and COSLA have agreed to put in place proportionate annual review arrangements to provide assurance to all parties that the funding package reflects the costs of delivery and the actual uptake of the offer. Such a review will provide us with an evidence base on which to consider whether the policy is fully funded and to take action if it appears to be overfunded or underfunded.

The expansion planning process that we undertook with local authorities was underpinned by the primary planning principle that authorities should make the best use of existing resources, consider purchasing capacity from the private and third sectors and then, finally—if there is no alternative—build new capacity. Local authorities have applied that principle in deriving their capital requirements for the expansion.

In order to promote equity and fairness in the funding that is provided to local authorities, we agreed with COSLA leaders to apply to local authority capital cost estimates standard reference rates that reflect and acknowledge the impact of rurality. Once those reference rates have been applied, the multi-year capital funding requirement for the expansion is £476 million, which will be distributed over four financial years from 2017-18 to 2020-21. That investment will deliver around 900 capital investment projects across Scotland, including more than 100 new nursery facilities.

I was personally delighted to see that authorities are planning to make significant use of outdoor facilities as part of their expansion plans, which will enrich the early learning and childcare experience for our children.

As I outlined to the Parliament in March, such ambitious plans always come with challenges. I have never denied that those challenges exist, and I am absolutely committed to addressing them in partnership with local authorities and other delivery partners. One of those challenges was reaching agreement on a funding package. I am delighted that we have risen to and resolved that challenge, which has been made possible by genuine partnership working with our colleagues in local government.

Agreement of the funding package is a critical milestone in the delivery of the expansion of early learning and childcare entitlement by 2020. It marks the commencement of a delivery phase, and local authorities will now be able to progress their local expansion plans without delay.

I do not doubt that expanding the provision of funded early learning and childcare is the right policy to give all our children the best start in life. We must never forget that the fundamental purpose of the expansion is to improve our children’s early years experience and equip them for a lifelong learning journey. By fully funding that commitment, we will ensure that all children receive high-quality early learning and childcare in the public, private and third sectors.

I commend this landmark funding agreement to the Parliament.

The minister will now take questions. I am conscious that topical questions overran its time, so unless the questions for the minister and her answers are suitably succinct, the last couple of questioners might not get in—that is an early warning.

I thank the minister for advance sight of her statement and I welcome the fact that she has worked in partnership with COSLA to achieve the funding agreement.

I want to ask questions about three areas that have jumped out at me. First, the minister made reference in her statement to her new model, in which the funding follows the child. Can she advise when the child account will be implemented?

Secondly, I note that the minister referred—twice, in fact—to a “sustainable hourly rate” to be paid to funded providers who are delivering the funded entitlement. Will that enable all ELC staff to be paid the living wage, so that we do not end up with inequality across the profession?

Thirdly, can the minister tell me what controls, if any, the Government will put in place to ensure that the capital allocation benefits nursery provision across the sector and that we do not just see local authorities expand their provision?

I thank Michelle Ballantyne for those questions. On her first point, we have given a commitment to exploring a way to deliver the funding-follows-the-child model. We are absolutely determined that flexibility will be a cornerstone of this policy and we understand that it must work for families if we are to achieve its goals. We are exploring that at the moment, and by 2020 we will have a funding-follows-the-child model.

On the agreement with local authorities on funding for living wage entitlement, we have underpinned that with a quality standard. To achieve funded entitlement, people have to meet certain standards, one of which is that those who deliver the 1,140 hours will pay the living wage. As the member knows, that is part of our commitment and it is part of the agreement that we have struck with COSLA.

On the question about capital expenditure, this is an agreement with COSLA, which has looked closely at its local requirements and what is required to be spent on capital expenditure, and we have agreed to fully fund it. It is a day for celebration.

I, too, thank the minister for early sight of her statement. When the Auditor General reported recently on the expansion of early years and childcare, she sounded a note of concern over the gap between local authorities’ identified funding needs and what the Government was then making available. We welcome the fact that the Government has accepted that its initial proposal fell short and has moved significantly towards the councils’ identified revenue funding needs.

However, the Auditor General was also clear that the funding will not deliver the policy unless we can find, recruit and train the required staffing numbers. Given the announcements on funding, can the minister now tell us how many early years workers currently work in the sector, what she expects that number to be by 2021 and how that increase will be achieved through this funding?

Yes, I can. In December 2016, 33,430 people worked in Scotland’s childcare sector. Another approximately 6,000 people worked as childminders.

We have in place, as members know, a robust recruitment programme. We have provided extra places at college. We have provided extra apprenticeship places. We have provided extra university places. We are absolutely confident that we will deliver the extra workforce required.

As members also know, we have already had a recruitment drive that aimed to recruit school leavers. We are about to have a recruitment drive that will aim to attract career changers and parents returning to work. We fully expect to deliver the workforce required for this expansion.

How does the Government intend to improve retention rates in the early learning and childcare sector, which would allow for consistent contact time between children and practitioners?

We recognise the importance of consistent relationships in early years. There are a number of ways in which we intend to improve recruitment and retention; one of those is delivering the living wage, and another is the quality action plan, which outlines investment in on-going training.

We are determined that early learning and childcare will be an attractive career. It is a real opportunity for people to do work every day that makes a difference, in an environment with passionate, knowledgeable people who are excited about the future. It is a real opportunity for people to consider a change in direction for their careers, or to consider a career in early learning and childcare that they might not have considered before.

The Audit Scotland report was critical of the Scottish Government for the lack of baseline data that was available to measure the comparative outcomes of targeting different priorities within childcare spending. Besides the helpful costings that are being made available today, what evidence has the Scottish Government identified to address those concerns and ensure that Parliament is able to see which areas of spending are delivering the best results?

It is widely acknowledged around the world, including by the Organisation for Economic Co-operation and Development, that the provision of universally accessible and high-quality early learning and childcare helps to provide children with the skills and the confidence they need in education. It is a cornerstone for closing the poverty-related attainment gap. Some of the studies have shown that the benefits are even greater for people from disadvantaged backgrounds. That is why we are investing more money to almost double the number of eligible two-year-olds. We have also asked local authorities to phase the expansion in first in the areas that need it most.

As I said in my statement, we are building in regular checks on how the money is being spent and whether it is being spent to deliver what we have asked local authorities to do. We are confident that the system will be robust.

I thank the minister for advance sight of her statement. There is a £214 million difference between what the Scottish Government has committed in capital funding and the £690 million that councils said that they need. How will the disparity be met? Can the minister assure the chamber that local authorities will not have to find money from core budgets to provide the infrastructure needed?

No, there is not. It is just—

We have an agreed funding package, which is precisely what local authorities have come to in a shared agreement with the Government. We are not imposing the financial settlement on our local authority partners; we have come to the figures in a shared agreement. We have a shared vision for early years and childcare and we are working hard to deliver it together.

I suggest that the Cabinet Secretary for Education and Skills does not answer questions unless he is giving the statement.

I am delighted with the minister’s statement and I look forward to seeing the expansion of early learning and childcare entitlement.

Maree Todd will be aware that the Education and Skills Committee has been taking evidence on the impact of poverty on attainment. This morning, the committee saw some of the innovative and encouraging work that is being done in Fife schools.

There is still a great deal to do, hence the expansion. What impact does the minister expect the expansion of early learning and childcare to have on the stubborn attainment gap, which we all want to close?

James Dornan has got right to the nub of the issue. At the absolute heart of the expansion is the delivery of high-quality early learning and childcare that will transform the lives of the children of Scotland. We want Scotland to be the best place in the world to grow up and we want every child to flourish and to fulfil their potential.

I mentioned earlier the world-wide OECD studies that show how the offering can tackle the attainment gap before it even occurs. Members have heard me mention that we aim to increase uptake among eligible two-year-olds, which is a vital part of how we aim to close the attainment gap.

Members will also be interested to hear that this morning, when I visited Cameron House nursery school, I met a knowledgeable and passionate headteacher, Chris McCormick, who has years of experience in early years provision. She spoke loudly and clearly about the difference that she can see. The nursery is already providing 1,140 hours and has been for a number of years. She and her staff have been astonished by the difference that it is making to the children who come through their nursery.

The minister referred to the efforts that she is making to almost double uptake among eligible two-year-olds. That is welcome, but what is being done to identify why take-up has been so low? How does she envisage raising awareness of the offer? Will that become part of the family financial health check and the Scottish Government’s income maximisation strategy?

We are looking at all options to raise awareness. Alison Johnstone will be well aware that I wrote to the United Kingdom Government some time ago to ask whether it would alter in Parliament regulations in order to enable us to share data between the Department for Work and Pensions and local authorities, as happens in England and Wales. I have not yet had a commitment on a timescale for that: it would make a big difference.

In the meantime, we recognise that word of mouth is one of the strongest ways to ensure that everyone who needs the support is aware of it. For many of the nurseries that I visit, word of mouth has been the main way in which people have found out about provision.

We will also increase awareness in jobcentres and among health visiting staff. The local authorities will work very hard in their communities to establish the best means to communicate in their areas. We are absolutely determined to improve uptake.

The Government knows how many staff in Scotland work in childcare, but how many extra staff will be needed from today, 1 May 2018, to deliver the childcare expansion?

We estimate that up to 11,000 additional early learning and childcare workers will be required by 2020 to deliver the expansion. As I have said, we have already increased capacity for courses in colleges and universities with 650 additional higher national certificate places and 350 additional graduate places, as well as having provided local authorities with an additional £21 million to expand and train their workforces. We are working with the Scottish Further and Higher Education Funding Council to offer 1,700 additional places on a one-year HNC course in 2018-19, and more than 400 additional graduate places.

Can the minister confirm that local authorities’ phasing in of the increased entitlement will prioritise the children and families who will benefit most from the expansion?

Absolutely. I have already said that at the core of the policy and the expansion is our aim to close the attainment gap. Studies around the world have shown that increasing early years provision will help us to do that. Those studies also show that the biggest difference can be made to people who come from the most disadvantaged backgrounds. That is why we are so keen to improve uptake among eligible two-year-olds and why, in the phasing in of the policy, we have asked local authorities to commit to putting in place plans to use a reference to the Scottish index of multiple deprivation or an equivalent measure in order to ensure that the children who need the provision most will benefit from it first.

What practical impact will the agreement have on the private, voluntary and independent sectors, in particular when it comes to allocation of capital funding? How will that help them to expand provision and increase flexibility, in particular in rural areas such as mine?

I thank Oliver Mundell for his question and look forward to meeting him and his constituents immediately after my statement to discuss that issue.

The capital spending has been agreed with local authorities, which are best placed to understand needs in their communities, and what is required to deliver the policy. I am completely sure that local authorities share our vision of making a difference to children and of flexible provision, and they have absolutely accounted for what needs to go to local nurseries to do that.

What actions are available to the Scottish Government if local authorities do not fulfil their commitments to deliver the infrastructure and staff that are required in addition to using local childminders?

The funding will be allocated to local authorities as a specific grant so that it is protected for investment in early learning and childcare. Local authorities will be required to report to the Scottish Government on how the funding has been applied.

I cannot emphasise enough, however, that there is a clear commitment on the part of our colleagues in local government to the aims and delivery of the policy. We have a shared vision and agreement, and we are keen to move forward today.

The minister will be aware that parents in Glasgow are facing a doubling of their childcare charges. Right now, families are making decisions to cut the number of hours for which their children access childcare, rather than increasing them. Could it be the case that the cost to families is being increased so massively to cover the gap in funding from the Scottish Government? If not, how does the minister explain Glasgow City Council’s decision, and how does that decision to hurt families right now work with our shared commitment to expanding childcare?

We have reached agreement today to fund fully an incredible expansion in investment in early learning and childcare that will transform the early years for our children and families, and make an incredible difference to every family in the land. It means a saving of approximately £4,500 per child for each family in the land, as well as providing living-wage jobs up and down the country.

We are also providing an incredible quality offering of early education that will transform outcomes for children from the poorest backgrounds.

It is absolutely for local authorities to make decisions on how much they charge for their wraparound care. It is not for me, in central Government, to overrule, or to impose my view on, local authorities. Local authorities know best what their local needs are and are accountable to their local communities. I am quite sure that they are best placed to make those decisions.

Can the minister outline what role she expects play and outdoor learning to have when delivering the expansion to 1,140 hours?

Fulton MacGregor will be aware that a couple of months ago I visited a forest kindergarten here in Edinburgh to make an announcement about giving £800,000 to Inspiring Scotland to work with eight local authorities on developing a how-to guide for play and outdoor delivery of education, as well as to support social enterprises.

He will also be pleased to learn that about 20 per cent of the additional capacity will be outdoor provision. This is a real opportunity to transform the quality of education in Scotland. We have the most incredible asset in our outdoor environment. Just this morning, I spent time at a nursery in Edinburgh. The children were outside in the sunshine, playing and learning about balance and communication and getting an appreciation of the natural world, as we guddled around digging for worms. Play and outdoor learning will be a key part of our offering.