The expansion of early learning and childcare
This briefing provides an overview of the current provision and use of funded ELC in Scotland and examines the expansion to 1,140 hours a year of funded ELC, including funding arrangements, the National Standard for ELC providers and growth of the ELC workforce.
Executive summary
In 2014, the Scottish Government announced that it wanted to almost double the number of funded hours of early learning and childcare (ELC) to 1,140 hours a year by the end of the next parliament.
Funded ELC is commonly understood as the number of 'free' hours of childcare a child is entitled to. Currently, all three and four year olds are entitled to 600 hours a year of funded ELC, usually taken as 16 hours a week, over 38 weeks. A child becomes eligible for funded ELC from the first term after their third birthday. However, local authorities can use their discretion to provide funded ELC earlier than that first term.
Looked after two-year olds, including those subject to a kinship care order or with an appointed guardian are also eligible for funded ELC, as are those two-year olds whose parents are in receipt of certain benefits.
Principles and aims
The priority for the expansion to 1,140 hours is to improve children's outcomes and close the poverty-related attainment gap. In addition, the expansion aims to support parents into work, study or training. The Scottish Government's four principles of the ELC expansion are: quality, flexibility, affordability, and accessibility.
The Scottish Government has stated that quality is 'at the heart' of the expansion and that achieving a high-quality ELC experience for children is a key objective.
The theory of change for the expansion is that, by delivering ELC that is high-quality, flexible, affordable and accessible, parents will be encouraged to take up their child's entitlement to funded ELC, especially those from the least advantaged backgrounds. In turn, children's development will improve, the poverty-related attainment gap will narrow and more parents will be able to work, study or train.
Use and provision
Currently, parents use 29 hours a week of ELC, on average. The majority of parents (over 70%) use the funded ELC entitlement together with a mix of paid or informal ELC. A 2018 survey found that the main reason why parents use funded ELC is that they consider it beneficial for their child's learning and development. In addition, parents reported using the funded hours to either work, increase the number of hours they work, or look for work.
Funded ELC in Scotland is delivered by a wide range of providers including nurseries, crèches and playgroups, from across the public, private and third sectors. A small number of childminders also deliver funded ELC, but the Scottish Government hopes this number will increase under the expansion to 1,140 hours.
There is variation in funded ELC provision, for example, some nurseries only provide funded places for children aged three or four. In addition, how providers operate differs, in particular between the public and private sector. For instance, only 31% of public nurseries operate after school hours, compared to 90% of private nurseries.
Workforce
Around 25,500 people are currently employed in delivering funded ELC in Scotland, across the public, private and third sectors. The ELC workforce is comprised of support workers, practitioners and managers/lead practitioners, all of whom are required to hold (or be working towards) the relevant qualification for their position. Additionally, all ELC staff must be registered with the Scottish Social Services Council.
Pay and conditions for those working in the ELC sector are generally considered to be better in the public sector, compared to the private sector. For example, the salary for a practitioner in the public sector can be over £10,000 more per year more than that offered in the private sector. Moreover, it is estimated that around 80% of practitioners in the private sector are paid less than the Living Wage.
The Scottish Government estimates that the expansion of funded ELC to 1,140 hours will require the recruitment of around 11,000 additional staff. Skills Development Scotland aim to increase the number of Modern Apprenticships in ELC by 10% each year up to 2020 and the Scottish Government aims to create over 1,800 additional HNC college and university places in 2018/19. In addition, the government has launched a recruitment campaign aimed at two key groups: school leavers and parental returners/career changers.
Funding
The Scottish Government provides funding to local authorities for the delivery and implementation of funded ELC. In turn, local authorities can commission partner providers from the private or third sector to deliver funded hours of ELC. This commissioning process and what hourly rate the partner provider is paid for delivering funded ELC is determined by each individual authority. Concerns have been raised that, at present, the rates paid by local authorities do not meet the operating costs of partner providers, leaving them with a shortfall.
A new funding settlement for the expansion of ELC was agreed between the Scottish Government and COSLA in April 2018. The agreement will provide local authorities with £567 million of recurring revenue funding per year by 2012/22. In addition, £476 million of capital funding has been allocated to authorities over the period 2017/18 to 2020/21. This capital funding is provided for the refurbishment/extension extension of current ELC facilities or building of new facilities to deliver the expansion to 1,140 hours.
The Scottish Government has stated that this multi-year funding plan will enable local authorities to pay partner providers a sustainable hourly rate.
Funding Follows the Child and the National Standard
From August 2020, a new Funding Follows the Child (FFtC) model will accompany the delivery of 1,140 hours of funded ELC. The Scottish Government states the FFtC model will enable a 'provider neutral' approach to ELC under which parents and carers will be able to access their child's funded ELC hours from any provider which:
meets the criteria in the National Standard
has a space available and
is willing to enter into a contract with the local authority.
The National Standard aims to ensure consistency across all funded ELC services so that parents and carers are assured that their provider of choice offers high-quality ELC. The National Standard includes a wide-range of criteria related to food, the physical environment, and fair work practices including the payment of the Living Wage to staff delivering funded hours of ELC. All funded providers, regardless of type or sector, will be required to meet with the National Standard. Compliance with the National Standard will be assessed by the local authority.
Sustainability and support
The Scottish Government published a Delivery Support Plan for providers of funded ELC in December 2018. It outlined four areas in which the government and local authorities will support partner providers covering financial sustainability, partnership working, workforce recruitment and communication with parents and carers.
The need for partner providers to receive a sustainable hourly rate has been emphasised as key to their participation in the expansion to 1,140 hours. Several local authorities have stated that their hourly rate will increase under the expansion and guidance for setting a sustainable rate is being developed by Scotland Excel.
Concerns have been raised about staff retention by partner providers as local authorities seek to expand their workforce.
Progress and evaluation
The Early Learning and Childcare Expansion Delivery Progress was published in December 2018 and provided the first update on local authority ELC expansion progress. The report showed that local authorities had not met their forecasts for workforce growth but had exceed thier capacity estimates.
The expansion of ELC and impact on both child and parental outcomes will be evaluated by the Scottish Study of Early Learning and Childcare. Baseline data is currently being collected to enable future comparisons of outcomes between those children who received 600 hours of funded ELC and those who received 1,140 hours.
Introduction
Early learning and childcare (ELC) describes the education and care of young children prior to starting school. ELC is most commonly delivered by nurseries but children also access ELC from other providers such as playgroups and childminders.
The term ELC was introduced by the Children and Young People (Scotland) Act 2014 and emphasises that the care of young children and their education are not separate things.
In November 2014, the Scottish Government announced that the number of funded hours of ELC will increase to 1,140 a year by 2020:
"In the years ahead we want to build upon that to almost double the number of free hours to 30 hours a week of free childcare by the end of the next Parliament, and we will begin to plan for this expansion immediately."1
"Funded" ELC is commonly understood in terms of the number of hours of 'free' childcare a child is entitled to (dependent upon their age). It does not include any ELC that is paid for privately by parents or carers. For the sake of ease, this briefing will use 'parents' to collectively refer to both parents and carers.
The current number of funded ELC hours a child is entitled to is 600 per year, which equates to 16 hours a week, over 38 weeks (i.e. term-time). There is flexibility in the provision of ELC which enables parents to take fewer hours per week, over a greater number of weeks. The increase to 1,140 hours equates to 30 hours a week of funded ELC, when taken over 38 weeks.
A timeline of Scottish Government activity related to the expansion of ELC (from 2014-2018) can be found at Annex C. This activity is represented graphically by Figure 1.
SPICe
This timeline is not intended to be exhaustive but seeks to give an overview of the Scottish Government's ELC expansion work to date. However, there are several milestones of note.
The launch of ‘A Blueprint for 2020: Expansion of Early Learning and Childcare in Scotland' in October 2016. This consultation set out the Scottish Government's policy vision for the expansion of ELC and outlined the Government's four guiding principles for the expansion: quality, flexibility, accessibility and affordability. It was also the first document to be labelled 'A Blueprint for 2020'.
2017 saw the publication of two 'action plans' for the expansion of ELC. ‘A Blueprint for 2020: The Expansion of Early Learning and Childcare in Scotland - 2017-2018 Action Plan’ was published in March. It committed the Scottish Government to a series of actions to increase ELC capacity, infrastructure and workforce. In October that year ‘A Blueprint for 2020: Expansion of early learning and childcare in Scotland - Quality Action Plan’ was published, setting out 15 actions to ensure the expansion delivers a high-quality ELC experience for all children.
In April 2018, a new funding package was agreed between the Scottish Government and COSLA. Described as a 'landmark' agreement by the Scottish Government, this funding package will see almost one
billion pounds invested annually to fund the expansion of ELC.
December 2018 saw the publication of several key documents detailing the Funding Follows the Child model and National Standard, both of which will be implemented as of August 2020 alongside the delivery of 1,140 hours. The new funding model and National Standard will change how funded ELC is accessed and delivered in the future. These documents provide crucial operating guidance for those services wishing to be part of the expansion of ELC and highlight the importance to the Scottish Government of delivering quality funded ELC.
This briefing is divided into two parts: the first section considers how funded ELC currently operates in Scotland. It outlines the relevant legislation regarding ELC, before describing how ELC is provided at present. Part one also examines parental use of ELC, the costs to providers of delivering funded ELC, and the composition of the current ELC workforce. This overview provides context for part two of this briefing which looks at the expansion to ELC ahead the entitlement to 1,140 hours per year in August 2020.
Part two outlines the Scottish Government's principles and aims for the expansion, as well as examining how the expansion is being funded and what actions have been taken to expand the ELC workforce. This section also outlines the Funding Follows the Child model and National Standard which will be introduced in August 2020 alongside the entitlement to 1,140 hours. Finally, it considers the progress of the expansion and discusses how the expansion will be evaluated against the Scottish Government's aims.
Part one: The current state of early learning and childcare
Legislation
ELC is defined in law by section 46 of the Children and Young People (Scotland) Act 2014 ('the 2014 Act'), as:
"a service, consisting of education and care, of a kind which is suitable in the ordinary case for children who are under school age, regard being had to the importance of interactions and other experiences which support learning and development in a caring and nurturing setting."1
The statutory guidance for the 2014 Act identifies two priorities for ELC:
to improve outcomes for all children, in particular those most vulnerable
to support parents into employment, training or study, in particular those who need assistance in securing sustainable employment.2
Under section 1 of the Education (Scotland) Act 1980 (as amended by section 47 of the 2014 Act) local authorities have a duty to: "secure that the mandatory amount of early learning and childcare is made available for each eligible pre-school child belonging to its area."3
An eligible pre-school child refers to all three and four year olds (who have not yet started school). The 2014 Act broadened the definition of an eligible pre-school child to incorporate looked after two-year olds, including those subject to a kinship care order or with an appointed guardian.1 Eligibility for funded ELC was further extended to two-year olds whose parents are in receipt of one (or more) of following benefits:
Income Support
Income-based Job Seeker's Allowance
Income-based Employment and Support Allowance
Incapacity or Severe Disablement Allowance
State Pension Credit
Child Tax Credit, but not Working Tax Credit (with income less than £16,105);
Both maximum Child Tax Credit and maximum Working Tax Credit (with income under £6,420)
Universal Credit (where household take-home pay is £610 a month or less)
Support under part six of the Immigration and Asylum Act 1999.5
Two-year olds in receipt of funded ELC continue to be entitled to funded ELC, regardless of whether their parent remains in receipt of the benefit(s).2
The Provision of Early Learning and Childcare (Specified Children) (Scotland) Order 2014 provides that children are eligible for funded ELC from the first term after their third birthday, unless the child's birthday falls in August (when they will be eligible from the autumn term).7 Therefore, local authorities are not legally required to provide funded ELC as soon as a child turns three, only from the term commencing after their birthday, as demonstrated by Table 1. Local authorities can use their discretionary powers to provide funded ELC to a three-year old sooner than the statutory start date.
| Where a child's birthday falls on or between the following dates: | The child will become eligible from the school terms set out below: |
|---|---|
| 1 March – 31 August | August (autumn term) occurring in that year. |
| 1 September – 31 December | January (spring term) following their birthday. |
| 1 January – last day February | March/ April (summer term) following their birthday. |
Scottish Government. (2014, August 1). Early learning and childcare: statutory guidance. Retrieved from https://www.gov.scot/publications/early-learning-childcare-statutory-guidance/pages/1/ [accessed 14 January 2019]
Two-year olds whose parents are in receipt of the above benefits are eligible for funded ELC from the first term after their second birthday or from the first term after their parent begins receiving the relevant benefit.2
Early learning and childcare provision
ELC is delivered by a variety of providers across Scotland. The main split is between childminders and day care of children services. Day care of children services includes nurseries, crèches, playgroups and children's centres which can be public, private or third sector operated. Under the Public Services (Scotland) Act 2010, all day care of children services and childminders must be registered with the Care Inspectorate, which has statutory responsibility for regulating and inspecting these services.1
Funded ELC is delivered primarily by public providers (i.e. the local authority) which provides 76% of eligible children with places. Private, third sector providers and a small number of childminders also deliver funded ELC as 'partner providers' through agreement with local authorities. Each local authority has its own method of commissioning. Currently, partner providers provide 24% of funded ELC provision although local authority use of partner providers is variable.2 Audit Scotland reported that the percentage of all children registered for funded ELC with a partner provider varied from a high of 62% in Moray, to a low of 5% in Falkirk.3
Day care of children services
In 2017, there were 9,127 registered ELC services in Scotland, of which 3,701 were day care of children services.1 The number of day care of children providers has been steadily declining each year, with the loss of over 500 services since 2008. Figure 2 shows how the day care of children services sector is split between public, private and third sector operators.
SPICe using data from Care Inspectorate. (2018, November 26). Early learning and childcare statistics 2017. Retrieved from http://www.careinspectorate.com/images/documents/4680/Early%20Learning%20and%20Childcare%20Stats%202017.pdf [accessed 26 November 2018]
Not all providers of ELC in Scotland offer funded ELC places. In 2017, 71% of day care of children services provided funded ELC places.1 The majority of funded ELC is delivered by nurseries. Overall, 94.1% of Scotland's nurseries provide funded places, but this varies by sector as show in Table 2.1
| All | Public | Private | Third |
|---|---|---|---|
| 94.1% | 100% | 83.2% | 92.8% |
Care Inspectorate. (2018, November 26). Early learning and childcare statistics 2017. Retrieved from http://www.careinspectorate.com/images/documents/4680/Early%20Learning%20and%20Childcare%20Stats%202017.pdf [accessed 26 November 2018]
There is also regional variation. In six of Scotland's 32 local authorities, all nurseries within the authority provide funded ELC but in Inverclyde, for example, only 73% of nurseries offer funded ELC.1
Not all day care of children providers offer funded places to every child eligible for funded ELC. For example, as seen in Table 3, most services only offer funded places to children aged over three.1
| Age group | % of services offering a funded ELC place |
|---|---|
| Aged 2 years only | 3% |
| Aged 3+ years only | 68% |
| Aged 2 years and 3+ years | 29% |
Care Inspectorate. (2018, November 26). Early learning and childcare statistics 2017. Retrieved from http://www.careinspectorate.com/images/documents/4680/Early%20Learning%20and%20Childcare%20Stats%202017.pdf [accessed 26 November 2018]
Moreover, the majority of nurseries providing funded ELC - across all sectors - only offer places to children aged three and above.1
| Aged 2 Years Only | Aged 3+ Years Only | Aged 2 and 3+ Years | |
|---|---|---|---|
| Public | 0.5% | 75% | 24% |
| Private | 2% | 66% | 32% |
| Third | 1% | 65% | 34% |
| Overall | 1% | 72% | 27% |
Care Inspectorate. (2018, November 26). Early learning and childcare statistics 2017. Retrieved from http://www.careinspectorate.com/images/documents/4680/Early%20Learning%20and%20Childcare%20Stats%202017.pdf [accessed 26 November 2018]
Childminders
At present, relatively few childminders deliver funded ELC. According to the Scottish Childminding Association (SCMA), as of July 2018, 144 two-year olds had a funded ELC place with a childminder, with 89 three or four-year olds recieving thier funded ELC from a childminder.1
The Scottish Government expects childminders will have a significant role in the expansion of ELC, as highlighted by the Minister for Children and Young People, Maree Todd MSP: "I expect them [childminders] to play a vital part in its delivery—particularly for eligible two-year-olds."2
According to the Care Inspectorate, in 2017 there were 5,426 childminders in Scotland, a 4.3% decline from 2016. The number of childminders has fluctuated over the last ten years but it has now reached its lowest level since 2008.3 The Care Inspectorate attributes this reduction to a fall in the number of new childminders registering. It also noted an upward trend in the number of childminders cancelling their registration within 12 months of operation, although reasons for this were not given.3
In observing a 'sizeable fall' in the number of childminders from 2016 to 2017, the Scottish Social Service Council stated: "It is not clear why this is the case, but it may be due to increased capacity in the day care of children sub-sector reducing demand for these services."5
The SCMA reported that in July 2018 there were 5,124 childminders in Scotland, indicating that the number of continues to decline.1
Flexibility
Under the 2014 Act, local authorities must have regard to the flexibility of ELC provision. According to the statutory guidance for the 2014 Act, it is: "envisaged that education authorities will provide patterns of hours of early learning and childcare provision which allow a degree of choice for parents to support their patterns and needs."1
This flexibility should be informed by regular consultation with parents as required by section 50 of the 2014 Act, and delivered within the framework outlined in section 51. This states that ELC sessions must be provided for a least 38 weeks of the year (i.e. term-time) and that ELC sessions should last for a minimum of 2.5 hours, but no longer than 8 hours.2 The Scottish Government has announced its intention to amend session length. This is discussed in the section of this briefing on 'Scottish Government principles of the ELC expansion'.
In consideration of the different aspects of flexibility, such as session length and availability of ELC during school holidays, there are discernible differences between local authority and privately-operated nurseries. Although all public nurseries and 99% of private nurseries operate during school hours, Table 5 demonstrates the differences in provision, for example, after school.
| Public | Private | |
|---|---|---|
| Operates during school hours | 100% | 99% |
| Operates after school hours | 31% | 90% |
| Operates during the school holidays | 9% | 94% |
| Offers part-time sessions only | 59% | 3% |
| Offers whole-day or part-day sessions | 40% | 94% |
Care Inspectorate. (2018, November 26). Early learning and childcare statistics 2017. Retrieved from http://www.careinspectorate.com/images/documents/4680/Early%20Learning%20and%20Childcare%20Stats%202017.pdf [accessed 26 November 2018]
Table 5 shows the difference between public and privately operated nurseries in terms of the session length offer. Overall, the proportion of day care of children services which offer both whole or part day places has increased annually since 2014, when the rate was 45.7%. As Figure 3 shows, the number of services offering part-day only places has fallen, as the number offering whole or part-day places has increased. However, over a two fifths of services still only offer a part-day place. 3
SPICe using data from Care Inspectorate. (2018, November 26). Early learning and childcare statistics 2017. Retrieved from http://www.careinspectorate.com/images/documents/4680/Early%20Learning%20and%20Childcare%20Stats%202017.pdf [accessed 26 November 2018]
Analysis by Audit Scotland found that the most frequent session length offered by local authority facilities was part-day at three hours and ten minutes.6 The report also found that while the majority of local authorities had council-run services that offered full-day funded ELC places, in six councils no local authority-run services offered a full-day place.6
Cross-boundary places
The statutory obligation to provide ELC lies with the authority in which the child lives. However, parents may wish to access funded ELC in a local authority area other than that in which they reside. For example, they work in another authority area and wish to place their child with an ELC provider close to their workplace.
Parents can request a funded ELC place in a different authority, but there is no legislative requirement for an authority to accept a ELC request from a parent outside of their area. According to the National Day Nurseries Association's (NDNA) Scotland Annual Nursery Survey Report 2018, 23% of nurseries in Scotland do not fund places for cross boundary children.1
Current use of early learning and childcare
The most recent figures from the Summary Statistics for Schools in Scotland report, published in December 2018, show that 99% of three and four-year olds are registered for funded ELC. Ten percent of two-year olds are registered, although around 27% of two-year olds are eligible.1
Analysis of how parents use funded ELC shows that 16% of parents use only funded ELC. The remainder use a mix of funded ELC, alongside paid ELC or informal care provided by relatives or friends. As demonstrated by Figure 4, the majority of parents (31%) use all three types of ELC.2
SPICe using data from Scottish Government. (2018, August 7). Parents' views and use of early learning and childcare: report. Retrieved from https://www.gov.scot/publications/exploring-parents-views-use-early-learning-childcare-scotland/ [accessed 16 November 2018]
The 'Parents' Views and Use of Early Learning and Childcare' report ("the Parental Views Report") gives an overview of findings from a Scottish Government-commissioned survey into parental use, views and experiences of ELC. The Parental Views Report shows that, on average, parents use 29 hours a week of ELC for three and four-year olds, broken down as follows:
fourteen hours of funded ELC
seven hours of paid ELC and
eight hours of informal ELC.
Those with eligible two-year olds use, on average, 24 hours of ELC a week.2 The average in the Parental Views Report does not differentiate between funded ELC use during term-time and the school holidays.
The report also found that lower income households, single earners and parents from the most deprived areas, overall used fewer hours of ELC (and were more likely to use funded ELC) than those parents that used paid ELC. In addition to using more hours, parents who paid for ELC were more likely to use private nurseries or childminders. 2
Reasons for using funded early learning and childcare
One of the reasons parents use ELC is to better prepare their child for starting school. Analysis indicates that parents prefer for children to use their funded ELC entitlement at a local authority nursery attached to the primary school they will later attend.1
When asked about their main reasons for using funded ELC, the Parental Views Report found that the majority of parents considered ELC good for their child's learning and development. In addition, the majority of parents (66%) with three and four-year olds stated they used funded ELC to either work or look for work (this fell to 47% for eligible two-year olds). Sixteen percent of parents with three or four year olds stated they used funded ELC to increase the number of hours they work, and 10% said they used the entitlement to study.2
Other reasons mentioned in the Parental Views Report for using funded ELC included the following:
SPICe using data from Scottish Government. (2018, August 7). Parents' views and use of early learning and childcare: report. Retrieved from https://www.gov.scot/publications/exploring-parents-views-use-early-learning-childcare-scotland/ [accessed 16 November 2018]
According to the Parental Views Report, 12% of parents with an eligible child do not use any funded ELC. The primary reasons given for not using their child's entitlement were:
parents were not aware of the availability of funded ELC and
parents thought their child was too young.2
Future use of early learning and childcare
The Parental Views Report asked parents about their likely use of the expanded entitlement to 1,140 hours. The majority of parents (90%) stated that, if the expanded entitlement were available at present - and offered the flexibility required - they would use some of the additional hours.1 Seventy-five percent of parents with a three or four year old said they would use all 1,140 of the funded ELC hours.1
The Parental Views Report states that: "the groups most likely to intend to use the full expanded entitlement were those currently using more hours of ELC per week, those currently spending £100 or more per month on ELC, and those currently using paid and/or informal ELC."1
Funding for early learning and childcare
Funding for ELC is provided to local authorities from the Scottish Government via the Local Government Finance Settlement. Since 2017/18, funding for the expansion of ELC has been given to local authorities as a specific grant. £286.3 million of ring-fenced revenue grant funding has been allocated for funded ELC in 2019/20.1 Local authorities will be required to report to the Scottish Government about how this funding has been applied.
Financial review of early learning and childcare
In 2016, the Scottish Government conducted a Financial Review of the provision of funded ELC to improve its understanding of the expenditure and costs associated with providing ELC and to inform its decision-making regarding the expansion to 1,140 hours.
According to the Financial Review, payment from local authorities for funded ELC places accounts for, on average, 23% of partner provider income.1 The majority of partner provider income comes from fees paid privately by parents, although there is regional variation in the local authority proportion of total income. For example, remote rural providers receive a higher proportion of thier income from local authorities.1
Unit cost of delivering early learning and childcare
The 2016 Financial Review (and accompanying Ipsos Mori report into the 'Costs of Early Learning and Childcare Provision in Partner Provider Settings') calculated the average per unit cost of providing funded ELC both in local authority and partner provider settings. It also examined the composition of the unit cost and found that staff costs accounted for the majority of the hourly unit rate.
Table 6 shows how the unit costs differs between public and partner provider settings (including in staff costs as a proportion). The Financial Review did not offer the partner provider unit cost rate broken down by age, but states: "given different staff ratios by age, costs for three and four year olds could be up to 15 per cent lower than this [£3.70] and costs for 2 year olds up to 20 per cent higher."1
| Unit cost for 3-4 years | Unit cost for 2 years | Unit cost for 0-5 years | Staff costs | |
|---|---|---|---|---|
| Local authority setting | £5.45 | £7.74 | 83% | |
| Partner provider setting | £3.70 | 71% |
Scottish Government. (2016). Financial Review of early learning and childcare in Scotland: the current landscape. Retrieved from https://www.gov.scot/binaries/content/documents/govscot/publications/research-publication/2016/09/financial-review-early-learning-childcare-scotland-current-landscape/documents/00506148-pdf/00506148-pdf/govscot:document/ [accessed 14 January 2019]Scottish Government. (2016, September). Costs of Early Learning and Childcare Provision in Partner Provider Settings. Retrieved from https://www2.gov.scot/Resource/0050/00506140.pdf [accessed 26 March 2019]
The difference between the local authority and partner provider unit cost rates is attributed by the Financial Review to the lower wages paid to ELC staff in the private and third sector.
"The large difference between costs in partner provider and local authority settings can be explained by the gap in staff costs. On average ... the public sector spends two thirds more than the voluntary and 80 per cent more than the private sector on staff-related costs."1
Rates paid to partner providers
The Financial Review also examined the average hourly rate partner providers were paid by local authorities to deliver funded ELC. It found that the average rate for three to five year olds was £3.59 an hour. The rate for two-year olds was £4.78.
Funding rates for partner providers are determined by each local authority, with hourly rates differing between authority and provider type. In 2017, the lowest hourly rate paid to partner providers was £3.17 an hour by Perth and Kinross Council. Shetland Council paid the highest rate at £4.58 per hour, per child.1
Analysis, using data from the Financial Review, found that 40% of partner providers in the private and third sector cannot cover the cost of delivering ELC with the rate provided by local authorities.2
Partner providers have stated that the rate paid by local authorities does not cover their operational costs. Seventy-nine percent of respondents to the NDNA 2018 Annual Survey (conducted in March/April 2018) reported that the hourly rate they received to deliver funded ELC was too low.3 Figures from the 2018 Survey showed an average shortfall between the hourly rate from local authorities and cost of provision of £1.98 per hour for three and four-year olds: an annual shortfall of £1,188 per child. For two-year olds the shortfall was £1.33 per hour - £798 per child per year.
In addition, the Fair Funding for our Kids campaign reported that 21 of Scotland's 32 local authorities were paying an hourly rate to partner providers that was below national average cost.4
Some local authorities have indicated that, as part of the delivery of 1,140 hours of funded ELC, the rate they pay partner providers will increase. This is discussed in the section of this briefing on 'Partner provider sustainability'.
Capping
The NDNA reports that, due to the low rate paid by local authorities, over a fifth of nurseries cap the number of funded ELC places they provide, with 16% of nurseries having waiting lists for funded places.1 Local authorities also practice capping. Audit Scotland found that ten of Scotland's local authorities cap the number of children they are willing to fund at partner providers. According to Audit Scotland, this allows councils to accurately budget their expenditure upon partner providers.2
Capping by both authorities and providers can affect parental choice, if they are unable to send their child to their desired provider due to no places being available. This can be particularly disruptive for a child already attending a partner provider ahead of becoming eligible for funded ELC.
If they are not able to access their funded entitlement ELC in the same provider due to the capping of places, parents then face a choice between moving the child in order to access funded provision, or paying for ELC so that their child has continuity and therefore not using their funded entitlement.
The early learning and childcare workforce
The Scottish Social Service Sector Workforce Data Report is produced annually by the Scottish Social Services Council (SSSC). The SSSC's Report provides information about the overall state of the ELC workforce in Scotland. 1 According to the SSSCthere are currently 34,010 staff working in day care of children services and 5,260 childminders.1
During a parliamentary debate on Early Years, the Minister for Children and Young People Maree Todd MSP stated that: "There are 34,500 staff working in ELC across Scotland, 25,500 of whom are providing funded placements."3
Figure 6 provides a breakdown of the composition of the total ELC workforce in Scotland, by sector.
SPICe using data from Scottish Social Services Council. (2018, August 29). Scottish Social Service Sector: Report on 2017 Workforce Data. Retrieved from https://data.sssc.uk.com/images/WDR/WDR2017.pdf [accessed 29 August 2018]
From 2008 to 2017, there was an increase of 9% in the number of staff employed in the day care of children sector. The SSSC attributes this rise to the extension of funded ELC to 600 hours (from 475 hours in 2014) and anticipates that the ELC workforce will continue to increase as progress is made towards the expansion to 1,140 hours.1
Qualifications
The day care of children workforce is comprised of support workers, practitioners, and managers/lead practitioner roles. These staff must be registered with the SSSC. Managers and lead practitioners must be qualified to, or working towards, a Scottish Credit Qualification Framework (SCQF) level 9 qualification (i.e. a graduate qualification such as a Bachelors degree or Graduate Apprenticeship) in an appropriate discipline, for example, the Professional Development Award in Childhood Practice. ELC support workers and practitioners do not need a qualification to be initially hired but they must be working towards the relevant qualification, at SCQF level 6 for support workers or SCQF level 7 for practitioners.
The graduate ELC workforce (SCQF level 9 or above) is comprised of teachers and other graduates such as those with a BA in Childhood Practice. In 2018, there were 821 FTE teachers in ELC in Scotland - a decrease of 100 from 2017. In addition, there were 2,302 FTE graduates working in ELC, an increase of 229 from 2017.1
Pay and conditions
The rate of pay for ELC staff in private settings tends to be lower than that paid by local authority providers. For example, the salary of an ELC practitioner working in the public sector is approximately £28,000 per annum, compared to £15,000 a year in the private sector.1 The Financial Review estimated that around 80% of practitioners and 50% of managers in partner provider settings were paid less than the Living Wage (then £8.25 an hour).2 From August 2020, providers will be required to pay the real Living Wage to all childcare workers delivering funded ELC. This is discussed in the section of this briefing on 'Fair work practices and the Living Wage'.
In addition to the pay disparity, Skills Development Scotland (SDS) states that terms and conditions for ELC staff are more attractive in the public sector than in the private and third sectors.1 This has led to concerns about staff retention and recruitment by partner providers and the prospect of losing their staff to local authorities. According to UNISON, higher pay and better terms and conditions in the public sector has led to higher staff retention by local authorities (90%) than in the private sector (78%).4
In its 2017 assessment of the ELC workforce, SDS found that overall, the ELC sector is perceived as an unattractive and the work of low status. It is characterised by low pay and poor terms and conditions, with little prospect for career progression.5 In addition, there are gendered assumptions about the nature of ELC work, with caring perceived as a woman's role.1
Part two: Expansion to 1,140 hours
Having examined how funded ELC in Scotland currently operates, part two of this briefing considers the expansion of ELC which will deliver 1,140 hours a year from August 2020. This section begins by examining the Scottish Government's aims for, and principles of, the expansion of ELC.
Scottish Government aims and objectives for the expansion of early learning and childcare
Scottish Ministers have stated on several occasions that quality is ‘at the heart’ of the expansion to 1,140 hours.12 The Scottish Government considers that providing a high-quality ELC experience for all children will support its primary aim for the expansion to 1,140 hours, namely: improving children's outcomes, especially of those who are more vulnerable, and closing the poverty-related attainment gap.34
Furthermore, the expansion of ELC aims support parents into work, training or study, in particular, those who need help in finding sustainable employment. However, this objective is secondary to improving children's development.3
Audit Scotland has highlighted the potential for: "conflict between the two priorities of the expansion. Improving outcomes for parents means focusing on flexible ways of providing ELC, while improving outcomes for children focuses on the quality of ELC."6
Financial savings for families are another anticipated outcome of providing 1,140 hours of funded ELC. The 2018-19 Programme for Government stated:
This [the ELC expansion] is a cornerstone in giving every child the best start in life, closing the attainment gap and reaching our economic potential as a nation. Its benefits will also be felt in household budgets - our investment in early learning and childcare will save a family around £4,500 per child a year.7
Scottish Government principles of the early learning and childcare expansion
The Scottish Government's guiding principles for the expansion of ELC are: quality; flexibility; accessibility and affordability.1 (Scottish Government definitions of these principles can be found in the emphasis boxes below). The Scottish Government has noted the potential for tension between these four ambitions, but states that: "ensuring a high-quality experience for the child is the key objective of the expansion."2
The Scottish Government's high-level theory of change for ELC expansion considers that, if these four principles are met, parents will be encouraged to take up the funded entitlement, which in turn will lead to achievement of the expansion's long-term aims of: improved child development; narrowing of the poverty-related attainment gap, and supporting more parents in work, training or study.2
As previously mentioned (in the section of this briefing on 'Current use of ELC') when asked about why they did not use their entitlement to funded ELC, the two most frequent reasons parents gave were that they were unaware of the entitlement or felt their child was too young to attend.4 Encouraging take-up of funded ELC among these groups may require additional activity.
Quality
A high quality experience for all children, which complements other early years and educational activity to close the poverty-related attainment gap and recognises the value of those we entrust to support our children to fulfil their potential.1
The Scottish Government states that evidence: "tells us that if our ELC offer is to help give children the best start in life and contribute to closing the poverty-related attainment gap, it must be of high quality." This emphasis on quality, according to the Scottish Government is why: "at the heart of the National Standard are a clear and consistent set of quality criteria."2 The National Standard is discussed in the section of this briefing on the 'National Standard.'
These criteria include ELC settings being evaluated as 'good' or above by the Care Inspectorate in areas such as staffing and quality of care. In 2017, the Care Inspectorate graded 88% of day care of children services, and 92% of childminders, as 'good' or better for all themes.3 Care Inspectorate statistics suggest that provision of funded ELC has a relationship with quality. In 2017, a higher proportion of services delivering funded ELC were graded 'good' or better, compared to those not delivering funded ELC (as shown in Table 7).3
| Delivering Funded ELC | Not Delivering Funded ELC | |
|---|---|---|
| Public | 95% | N/A |
| Private | 85% | 63% |
| Third | 89% | 75% |
Care Inspectorate. (2018, November 26). Early learning and childcare statistics 2017. Retrieved from http://www.careinspectorate.com/images/documents/4680/Early%20Learning%20and%20Childcare%20Stats%202017.pdf [accessed 26 November 2018]
In addition to the National Standard, which sets a 'minimum quality threshold' for funded ELC providers, in 2017 the Scottish Government published a 'Quality Action Plan' for the expansion of ELC.6 The Quality Action Plan outlined 15 actions the Scottish Government would undertake to strengthen quality across the ELC system and: "made it clear that the most important driver of quality is an ELC profession that is dedicated to the care, learning and development of our youngest children."1
Affordability
The increased access to affordable ELC which will help to reduce barriers to participating in the labour market which parents and carers face.1
In the Parental Views Report, over 50% of parents that use funded ELC indicated they also paid for some form of ELC. The majority of parents (69%) that paid for ELC stated that they had experienced affordability problems in the last year. When asked about the cause of these difficulties, 97% of respondents referred to the high cost of childcare.2
According to the Parental Views Report, the average monthly spend on childcare was £494, however, this total represents the monthly cost of childcare for all children aged under six, not just those eligible for funded hours. The Parental Views Report found that average monthly spend varied dependant on income, from £343 a month for those with an income of less than £16,000 a year, to £645 for those earning more than £60,000 a year.2
According to the Scottish Government: "the expansion is likely to give considerable financial benefits to those parents" who also pay for ELC.4 The Scottish Government anticipates an annual £4,500 per annum saving for families under the expansion to 1,140 hours, approximately £350 a month.5
Flexibility
Support for parents and carers in work, training or study, and a commitment to offer patterns of provision better aligned with working patterns whilst delivering this in a way that ensures a high quality experience for the child.1
In its 2017/18 Action Plan for the expansion of ELC, the Scottish Government highlighted that respondents to its October 2016 consultation had made clear that: "the level of flexibility offered by local authorities does not always reflect the expectations of the local community."2 The Action Plan further stated that local parental demand is the primary driver of local flexibility.2
The Action Plan outlined two actions the Scottish Government would take regarding delivering more flexible ELC provision:2
"We will consult on the legislative changes required to ensure that existing provisions on flexibility, including consultation requirements, remain appropriate to deliver our policy vision for 2020".
"We will publish guidance on delivering flexibility in early 2018, drawing on the operation of, and learning from, the ELC delivery model trials to help local authorities design their provision for 2020".
The Scottish Government intends to bring forward legislative changes to increase the maximum length of a funded ELC session: "We know that flexibility for families is a welcome element of the expansion. We intend to introduce ahead of August 2020 legislative changes to increase the maximum length of a funded ELC session to 10 hours."5
The Scottish Government has stated that:
"We are confident we can demonstrate providers are able to offer a high quality experience over longer sessions and the National Standard will offer opportunities for us to measure this over time ... the Scottish Government will amend this in legislation again if we are concerned that evidence is showing a detrimental impact on children's wellbeing and outcomes."6
Regarding the second action point, the ELC delivery model trials concluded in June 2018 and are discussed in Annex A. The Scottish Government guidance on the flexible delivery of ELC has not to date been published. The Scottish Government has advised that:
"The Scottish Government has been working with delivery partners, including providers, to develop guidance on flexible delivery models. We will set out more details on this later in 2019. This will be part of a wider suite of supporting materials to ensure local authorities, providers and parents are supported through the implementation of the 1140 hours funded ELC commitment."7
Accessibility
The commitment to ensure that ELC capacity is sufficient and is as conveniently geographically located as possible – particularly in areas of higher deprivation and in rural communities – to support families and enable parents and carers to work, train and study, while also appropriately meeting the needs of children who require additional support and parents who request ELC through the medium of Gaelic.1
The principle of accessibility encompasses three aspects: capacity, location and Additional Support Needs (ASN).
Capacity: The Scottish Government has stated that: "an important condition for the success of the ELC expansion is that enough capacity is available to provide the hours of funded ELC across the country".2 2017 statistics from the Care Inspectorate show that the total number of registered ELC places was 199,870, an increase of about 4% from 2014.3 These statistics further show that although day care of children sector has increased its capacity by 5.5% since 2014, over the same time, the capacity of childminders has fallen by almost 2.5%. From 2016 to 2017 alone, the capacity of childminding services fell by nearly 4.5%.3 As mentioned previously childminders are considered to be a vital part of the ELC expansion.
Location: In choosing an ELC provider, the Parental Views Report found that convenience of the location to their home and the reputation of the provider were the two primary drivers of choice. Other factors in choosing an provider included proximity to parents' work, to the child's grandparents, and to others who provide informal ELC.5 However, the Parental Views Report also found that, of those parents which stated they did not use any funded ELC, 21% of those with an eligible two-year old and 14% of those with an eligible three or four year old, said it was because there were no available providers nearby. 5
ASN: The Parental Views Report found that 48% of parents of children with ASN mentioned having experienced one or more difficulties accessing suitable ELC provision. Difficulties included a lack of information about how providers would support their child; staff lacking both time and the qualifications/experience required to meet their child's needs and that facilities/equipment did not meet the needs of their child.5 The Scottish Government has stated that ELC provision must: "be delivered in a way that ensures equality of access for, and accounts for the varying needs of, all children."1 In May 2018, the Scottish Government established the 'Early Learning & Childcare Inclusion Fund'. This providers funding for ELC settings to help support those children with ASN access their funded ELC entitlement.9
Local authority early learning and childcare expansion plans
Under the expansion, local authorities will continue to be responsible for implementation and delivery of ELC. Ahead of the ELC expansion, the Scottish Government required each local authority to develop an ELC Expansion Plan. 1 These plans detail how authorities will phase in the entitlement to 1,140 hours year by August 2020, including:
how the authority will make full use of its own assets
how it will maintain and/or extend the use of partner provider assets
details of what engagement the authority will undertake with the local community
how it will grow the workforce and
financial estimates for the expansion.1
The Scottish Government intends for these plans to be working documents which will evolve over time. The expansion plans will inform future Scottish Government Spending Reviews and funding allocations, in addition to supporting the monitoring and evaluation of the expansion of ELC.1
Initial plans were submitted to the Scottish Government in late September 2017. Authorities were asked to review and resubmit their finance templates, with the support of the ELC delivery team, to the Scottish Government, by 2 March 2018.4
To support authorities in developing their plans, the Scottish Government published 'ELC expansion planning guidance for local authorities' in March 2017. The guidances specifies that local delivery plans ought to evidence best use of existing services and assets across ELC providers, including the private and third sectors. The guidance provides a sequential decision-making process for authorities to use when making best use of assets.
Making best use of assets: A sequential decision-making process
a. Use what we have: Making full use of existing assets within the local authority (including, workforce, potential of the natural environment, buildings and infrastructure);
b. Use what we purchase: Enhancing the use of partner assets– developing and extending existing partnership models against a default assumption of a continued mixed economy – strengthening both local authority and other provision (including, for example, childminders and blended models);
c. Create what we need – where full use of existing local authority services and assets, plus enhanced commissioning, still leaves a gap, plan to create or build new capacity, including outdoor nurseries.1
In addition, when determining how to implement the increased entitlement, the Scottish Government guidance states that authorities ought to evidence consideration of the Scottish Index of Multiple Deprivation (SIMD) in their plans: "to ensure that the families and communities who stand to benefit most from the expansion benefit first."1
How this aspect of the guidance has been interpreted was raised by focus group participants during the Education and Skills Committee's visit to Rutherglen in October 2018.7 For example, some participants suggested that one local authority was implementing the expansion to 1,140 hours by allocating children from different SIMD profiles to different forms of ELC, with SIMD 1 to 4 going to local authority nurseries and those children from more affluent areas going to private providers.7
Expansion of the early learning and childcare workforce
In 2015, initial estimates from the Scottish Government indicated that 20,000 additional staff (headcount, not full-time equivalent) would be required by 2020 in order to fully deliver the expanded ELC entitlement.1 2This number has since been revised, with the Scottish Government estimating that the required additional workforce, relative to 2015/16 levels, will be between 8,000 and 11,000 staff.1
The Scottish Government anticipates that the majority of the additional workforce required to deliver the expanded hours will be at the practitioner grade (between 7,000-10,500 staff). In addition, the Scottish Government estimates 900 new managers will be required but assumes that these posts will be filled by practitioners up-skilling.1
The Scottish Government estimates that the majority of new staff will be required in local authority settings, suggesting that the local authority ELC workforce will need to increase by between 65% to 100% (relative to October 2017).1
Skills Investment Plan
In January 2018, SDS published a 'Skills Investment Plan' which outlined four strategic objectives to help grow and develop a skilled and knowledgable ELC workforce:
To raise the profile and attractiveness of the sector and actively increase diversity.
To better promote routes in to, and pathways through, the sector.
To ensure take up of opportunities for progressing, re-skilling and upskilling the workforce.
To engage ELC employers.1
These actions seek to address some of the key challenges to ELC workforce growth and development identified by SDS. For example, the need to alter negative perceptions of the ELC sector as being low-status employment, with low pay and little to offer in terms of career progression. 2The SDS Skills Investment Plan also noted the need for the sector to be able to better retain staff, describing recruiting and retaining people working in ELC as a 'persistent challenge'.2
Quality
The Scottish Government states that: "the single most important driver of the quality of a child's ELC experience is a high-quality workforce."1 NHS Health Scotland's review of 'Childcare Quality and Children's Outcomes' found that those settings with access to higher qualified staff, such as teachers or those holding an early childhood qualification, were more likely to offer high-quality experiences for children. 2
In order to grow a qualified workforce, SDS are aiming to increase the number of Modern Apprenticeships in ELC by 10 per cent year-on-year up to 2020. Uptake of Modern Apprenticeships in ELC increased by 21% from 2016/17 to 2017/18.3
In addition, The Scottish Government estimates that there will be more than 700 starts between 2018 and 2020 in the new Foundation Apprenticeship in 'Social Services: Children and Young People'.4
The Scottish Government is working with the Scottish Funding Council (SFC) to create 1,813 additional HNC college and university places (at ELC practitioner level) and 490 additional managerial level places, in 2018/19. These managerial places are split between 388 BA Childhood Practice places at universities and 102 Professional Development Award (PDA) places at colleges.5
Additional graduates
In January 2017, the Scottish Government committed to nurseries in the most deprived areas having an additional graduate – either a teacher with early years expertise or a graduate practitioner with the BA Childhood Practice award – in place by August 2018.1 2 The Scottish Government stated that 435 additional graduates would be required to meet this commitment.1
According to the 'Early Learning and Childcare Expansion Delivery Progress' report (this is discussed in the section of this briefing on 'Expansion progress') 325 FTE additional graduates were in post by the end of November 2018.4 Over 100 fewer graduates than the Scottish Government intended to be in place by that August.
It is unclear what is meant by FTE as for this indicator: “local authorities were given the freedom to define FTE according to their own classification, and that this varied across authorities.”4
Recruitment and diversification
In October 2017, the Scottish Government launched a national ELC recruitment campaign. The Scottish Government identified two target audiences for the campaign: school leavers and parental returners/career changers. The childcarecareersscotland.scot website was launched in April 2018. It provides information about the different jobs roles in the ELC sector, as well as advice on qualifications and training.
In addition to expanding the workforce, the Scottish Government is also aiming to diversify the ELC workforce to include more under-represented groups. In October 2018, the Scottish Government announced the launch of the ‘Men in Early Years Challenge Fund’ which aims to increase the number of men enrolling on NC and HNC Childhood Practice courses.1 At present, only 4% of the early years workforce in Scotland is male.2
In addition, the Scottish Government has launched the ‘Increasing Ethnic Minorities Within ELC Workforce Project’ aims to recruit more people from ethnic minorities into the ELC workforce.3 The project will be delivered by CEMVO Scotland which stated that it will specifically target ethnic minority school leavers, young people, parents returning to work and those seeking a career change.4
Funding for the expansion of early learning and childcare
In October 2017, the Scottish Government announced that the funding for the expansion of ELC would increase to £840 million a year by 2021/22.1 COSLA responded that the amount allocated fell short of the requirements set out by local authorities in their ELC expansion plans.2 Local authorities were asked to review and resubmit their finance templates to the Scottish Government by March 2018.3
A new, multi-year, funding package for ELC was agreed between the Scottish Government and COSLA in April 2018.4 Under the agreement local authorities are set to receive recurring revenue funding of £567 million per annum by 2021/22. In her statement to the Scottish Parliament on 1 May 2018, the Minister for Children and Young People Maree Todd MSP, said that this agreement: "will bring annual public spend on early learning and childcare to £990 million."5 This settlement was confirmed in the 2019/20 budget.
| 2018/19 | 2019/20 | 2020/21 | 2021/22 |
|---|---|---|---|
| £70.3m | £307m | £508m | £567m |
Scottish Government (2018)
In addition to the above revenue funding, authorities have been allocated £476 million of capital funding to support expansion over the period 2017/18 to 2020/21.
| 2017/18 | 2018/19 | 2019/20 | 2020/21 |
|---|---|---|---|
| £30m | £150m | £175m | £121m |
Scottish Government (2018)
The Minister for Children and Young People stated that the £476 million of investment: “will deliver around 900 capital investment projects across Scotland, including more than 100 new nursery facilities.”5
Audit Scotland stated in their report on ELC that:
"Between 2018/19 and 2020/21, councils’ plans detail almost £690 million of capital funding ... Over the period 2017/18 to 2021/22, the amount councils estimate they will need increases to about £747 million. This includes £411 million for new builds, £194 million for extensions, £115 million for refurbishing existing buildings and £15 million to develop outdoor spaces for ELC."7
Partner provider access to capital funding
According to the Scottish Government, this capital funding is provided to authorities for the either the refurbishment or extension of current ELC facilities, or the building of new capacity (i.e. new outdoor space) in order to help deliver the ELC expansion.1
Concerns have been raised about the use of capital funding by local authorities and the ability of partner providers to access the funding. The Education and Skills Committee held a focus group event about funded ELC in Rutherglen in October 2018, where it was noted that there is a 'lack of clarity' for partner providers about their eligibility for capital funding.2 Group participants: "queried the extent to which the private providers are getting access to capital funding."2
This issue was acknowledged by Minister for Children and Young People Maree Todd MSP, during a debate on Early Years. A letter was sent in November 2018 to local authorities to clarify the Scottish Government's position regarding access to capital funding:
Local authorities are permitted to use this funding to provide support to funded providers in the private and third sectors where a need to create additional capacity has been identified in local expansion plans, subject to any legal and financial restrictions on local authorities’ ability to use capital funding to create assets owned outside the public sector. It is for each local authority to seek advice from their own financial and legal teams when considering options for providing support to providers.1
The letter provided two examples of local authorities offering financial support to partner providers. Angus Council has developed a grant scheme to provide support to its 31 local partner providers with their own expansion plans.5 The grant scheme is funded from within the authority's ELC capital funding and the initial budget for the scheme is £500,000.65
Moray Council operates a grant scheme which offers up to £25,000 to partner providers for improvements to infrastructure and for staff training, to help them to prepare for expansion to 1,140 hours.8 In contrast to Angus, these grants are provided via the ELC revenue funding stream.9
Funding Follows the Child
This part of the briefing examines the 'provider neutral' Funding Follows the Child model and accompanying National Standard both of which will be introduced alongside the roll-out of 1,140 hours of funded ELC in August 2020. The model and National Standard were consulted on by the Scottish Government in March 2018. On 18 December 2018, the Scottish Government published three documents detailing how the Funding Follows the Child approach and National Standard will operate.
These were:
A Blueprint for 2020: The Expansion of Early Learning and Childcare in Scotland. Funding Follows the Child and the National Standard for early learning and childcare providers: Principles and Practice.
A Blueprint for 2020: The Expansion of Early Learning and Childcare in Scotland. Funding follows the child and the national standard for early learning and childcare providers: Operating Guidance.
A Blueprint for 2020: The Expansion of Early Learning and Childcare in Scotland. Funding follows the child and the national standard for early learning and childcare providers: Frequently Asked Questions for Local Authorities and Providers.
Background
The Scottish Government's October 2016 consultation on the future direction of ELC proposed a range of funding models for the expansion, including maintaining the current arrangement whereby ELC is funded via the block grant to local authorities.1 One option proposed was a ‘Funding Follows the Child’ model. Under this demand-led system, parents would choose an ELC provider and the funding would be administered by the local authority, following their child to their provider of choice.1
Most respondents to the consultation supported the Funding Follows the Child approach.3 It was considered that this model would give parents choice in their ELC provider, prevent local authorities using their allocated funding for other purposes and offer parents greater flexibility. However, concerns were raised that too much flexibility might lead to parents changing ELC provider frequently, affecting children and creating uncertainty for ELC providers.3
The Scottish Government stated in its ELC 2017/18 Action Plan that it would: “commission a study to explore the potential costs and benefits of introducing an ELC Account in the future.”5
A 'provider neutral' approach
From August 2020, the Funding Follows the Child (FFtC) approach will be rolled out with the expanded entitlement to 1,140 hours, to facilitate the Scottish Government's 'provider neutral' approach to the expansion of ELC.1 The 'provider neutral' approach aims to allow parents to access their child's entitlement to funded ELC from any provider, including childminders.2 As the Scottish Government's 2017/18 Action Plan explains:
"Our approach is fundamentally provider neutral – prioritising the settings that are best placed to deliver quality outcomes for children and supporting our ambition to close the attainment gap, regardless of whether they are provided by the public, private or third sectors."3
In describing the FFtC model, the Minister for Children and Young People, Maree Todd MSP, stated:
"The funding follows the child approach places the choice in parents’ hands, enabling them to access their child's funded entitlement from any provider that meets the national standard, has a place available and is willing to enter a contract with the local authority."4
Providers must also be: “able to offer the funded hours in-line with local ELC delivery plans (subject to the settings' overall capacity).”2 According to the FAQs, local parental demand (as informed by the duty to consult on the delivery of ELC under the 2014 Act) will be the main driver of flexibility and this local demand ought be reflected in authorities' ELC expansion plans.6
The Scottish Government's Operating Guidance for the FFtC and National Standard (the "Operating Guidance") states that under the FFtC model, parents are not restricted to choosing providers from their own local authority.2 This addresses the cross-boundary issue discussed earlier in the section of this briefing on 'Flexibility.'
The FAQs state that:
"If a setting is already a funded provider with another local authority then this should constitute enough evidence to fund the child in their chosen funded provider ... It is unlikely that the setting would need to apply to become a funded provider in more than one local authority area."6
Under the FFtC model, the funding given to providers in order deliver ELC will continue to be channelled through local authorities.9 Local authorities will continue to set the local rate that is paid to partner providers, including childminders. The Operational Guidance states that a sustainable rate should:
support the delivery of high-quality ELC for all children
reflect the cost of delivery
allow for investment in the setting and
enable payment of the real Living Wage.
Scotland Excel is working with local authorities and providers to develop technical guidance on setting affordable and sustainable rates for funded providers, including childminders. This was due to be finalised in March 2019 but has not yet been published. The Scottish Government has stated that they expect guidance on setting sustainable rates to be published on 26 April 2019, once it has been approved by COSLA. 1011 However, it has already been states that the guidance will not include a rate calculator.12
The Scottish Government has said that the multi-year funding plan it agreed with COSLA in April 2018 will enable local authorities to pay partner providers a sustainable rate.2
The National Standard
To ensure the delivery of a 'provider neutral' approach, the FFtC model will be underpinned by the National Standard. From August 2020 the National Standard will apply to all funded ELC services, regardless of whether they are public, private or third sector providers and guarantee consistent, high-quality ELC provision, across all provider types.1 According to the Scottish Government, the National Standard: "will provide parents and carers with the certainty that those settings delivering funded hours are offering high quality ELC provision."1
In March 2018, the Scottish Government published a consultation paper on the National Standard.3 The consultation closed on 29 June 2018 with over 200 responses. The finalised National Standard was published in December 2018 and sets the minimum quality threshold all funded ELC providers must meet as of August 2020 in order to deliver funded ELC.4 The Scottish Government stated that the: "criteria in the National Standard focus on what children and their families should expect from their ELC experience, regardless of where they access their funded entitlement."5
The final criteria are broadly the same as those proposed in the National Standard consultation with the addition of a new category: 'Parent and Carers Engagement and Involvement'. The below table gives a very brief overview of the National Standard but is not exhaustive. For the complete text of each criteria and sub-criteria, see pages 9-12 of the Scottish Government's: 'Funding follows the child and the national standard for early learning and childcare providers: principles and practice' publication.
| Criteria | Sub-Criteria |
|---|---|
| 1. Staffing, leadership and management | Care Inspectorate quality evaluations relating to staffing, engagement and leadership are good or better; Staff have, or are working towards, the relevant benchmark qualification. |
| 2. Development of children's cognitive skills, health and wellbeing | Care Inspectorate quality evaluations relating to quality of care and support are good or better; Setting has a framework, informed by national guidance, to support children's learning. |
| 3. Physical Environment | Care Inspectorate quality evaluations relating to quality of environment are good or better; Children have daily access to outdoor play. |
| 4. Self-Evaluation and Improvement | The setting uses self-evaluation frameworks to identify strengths and areas for improvement; Setting has a plan to continuously improve quality of provision. |
| 5. Parent and carer engagement and involvement in the life of the setting | That settings have open and regular communication with parents, supporting them to engage with their child's learning and development. |
| 6. Inclusion | Setting complies with duties under the Equality Act 2010; Setting will provide support and make any reasonable changes to ensure children's additional support needs do not prevent them from a full range of ELC experiences. |
| 7. Business Sustainability | Settings must demonstrate that they are financially viable. |
| 8. Fair Work Practices, including payment of the Living Wage | Settings must pay the Living Wage to all staff providing funded ELC and commit to adopting Fair Work practices. |
| 9. Payment Processes | Parents must not be asked to make any up-front payment or be charged any top-up fees. |
| 10. Food | Settings must have a clear policy for the provision of healthy meals and snacks. |
Scottish Government. (2018, December 18). Funding follows the child and the national standard for early learning and childcare providers: operating guidance. Retrieved from https://www.gov.scot/publications/funding-follows-child-national-standard-early-learning-childcare-providers-operating-guidance/ [accessed 25 January 2019]
As demonstrated in the above table, assessment of quality by the Care Inspectorate is key to meeting three of National Standard criteria:
staffing, leadership and management
development of children's cognitive skills, health and wellbeing and
physical environment.
Respondents to the National Standard consultation noted the importance of consistency in assessing a provider's quality. The consultation analysis states that this point was raised in the context of respondent concerns that Care Inspectorate inspectors are inconsistent in how they grade different ELC providers. 7
Consistency in the implementation of the National Standard criteria and the partner provider funding rate were considered by respondents as crucial to ensuring partner providers are able to meet the aims of the National Standard. 7
The following aspects of the National Standard criteria are discussed in more detail as they include some changes in the delivery of ELC and/or address concerns that have been raised about the current operation of ELC.
Staffing, leadership and management
In order to be compliant with the National Standard, day care of children staff working for an ELC provider will be required to have attained the benchmark qualification for their role (i.e. SCQF Level 6 for a support worker) or, if they are within the first five years of registering with the SSSC, have started work on gaining the relevant qualification.1 This reflects the current requirements to work in day care of children services.
At present, childminders are not required to hold a qualification but in order to meet the National Standard criteria, and therefore become a provider funded ELC, childminders will also be required to have (or be working towards) the same qualification level as ELC practitioners (SCQF level 7) are already required to hold.1 This requirement is considered to have some advantages, for example, giving parity between childminders and other ELC practitioners, although concerns have been raised that some experienced childminders may be discouraged from delivering funded ELC due to having to secure the necessary qualification.3
Under the National Standard, all of the childcare workforce, including childminders, will be required to achieve a minimum of 12 hours a year of Continuous Professional Learning (CPL). The Operating Guidance states that this will promote parity in professional learning across the ELC workforce and that: "CPL can be just as, if not more important than a formal qualification, especially where the benchmark qualification was achieved many years ago."4
Fair work practices and the Living Wage
The National Standard requires funded ELC providers to demonstrate a fair and equal pay policy across the setting.1
ELC providers (excluding childminders who do not employ staff) who agree to deliver funded ELC will have to pay the ‘real’ Living Wage (currently £9.00 an hour).1 Providers will only be required to pay the Living Wage to those staff delivering funded ELC. They will not be required to pay staff providing non-funded ELC, or any other staff employed by the provider, (i.e. cleaning staff) the Living Wage.
In addition, the Living Wage is only to be paid for those hours spent delivering funded ELC. Therefore, if an employee spends the morning caring for two-year olds in receipt of non-funded ELC and the afternoon looking after three-year olds receiving funded ELC, they are only required to be paid the Living Wage for the afternoon.3
According to the Scottish Government, the funding given to partner providers by the local authorities is for the delivery of a service on behalf of the public sector (via a contract as agreed under the FFtC model). Therefore: "if funding were provided for non-funded hours ... this could be interpreted as a subsidy and therefore could be in breach of State Aid Rules."4
Respondents to the National Standard consultation expressed concern about creating a division between those staff delivering funded ELC and those providing non-funded care. It was considered that differing payment rates might create an incentive for staff to focus on older children and those eligible for funded ELC, thereby devaluing the work of those providing non-funded ELC in particular to the youngest children.5
Audit Scotland also stated that payment of different hourly rates to staff: "poses risks around equity for staff, morale and may have an impact on staff retention, the quality of ELC and on the cost for parents of non-funded ELC."6
Food
The National Standard criteria states that all funded ELC settings must:
"have a clear and comprehensive policy for the provision of healthy meals and snacks for children. This should be consistent with Setting the Table and the Eatwell Guide and should ensure that individual cultural and dietary needs are met.1
The National Standard consultation proposed that, as part of the National Standard, each child be provided with a free meal during their ELC session, to be funded through the partner provider delivery rate.2
It was announced in December 2018 that every child attending a funded ELC session will receive a healthy meal as part of their ELC session.1 4 In explaining the commitment to a free meal, Maree Todd MSP, the Minister for Children and Young People stated:
"The expansion of funded ELC also offers us an opportunity to ensure that no child in ELC goes hungry because of their background, and it supports the development of healthy eating habits at a crucial stage. That is why, from August 2020, every child who attends a funded ELC session will be provided with a free meal."5
The Minister confirmed that the: "funding to deliver that commitment is additional to the sustainable rate for funded providers. Local authorities will ensure that there is transparency for funded providers as to the funding being provided to deliver the free meals."5
Payment processes
To ensure that funded ELC is free at the point of access the National Standard requires that ELC providers must not ask parents to make any kind of upfront payment, such as a deposit, in order to secure funded hours of ELC. Providers must not charge any top up fees in relation to funded hours and any additional charges made by the provider should be optional and limited to snacks, the cost of outings or extracurricular activities.1
This reflects the existing provision under section 33(1) of the Standards in Scotland’s Schools etc. Act 2000 that, as explained in the statutory guidance for ELC: "the entitlement to mandatory early learning and childcare should be provided without the payment of fees, including where this is delivered through partner providers."2
This requirement relates only to funded ELC hours. Any charges or fees associated with non-funded ELC remain at the discretion of the provider and a matter between them and parents.1
The National Standard also states that parents should not be required to purchase additional hours beyond their child's funded entitlement in order to access the funded hours of ELC.1 This issue was raised in the Parental Views Report, where several parents:
"referred to private providers setting a minimum number of days or hours, such that parents had to pay for more hours than they needed; there was concern ... that these providers are effectively setting a minimum cost for parents."5
If parents choose to use a mix of funded and privately paid for ELC from a setting, the National Standard notes that any charges for non-funded hours ought to be presented clearly and transparently to parents.1
Assessment of the National Standard
According to the Operating Guidance, in order to ensure a 'provider neutral approach', all settings - public, private and third sector, including childminders - that wish to become a funded ELC provider will be required to meet the National Standard criteria.1 All potential providers will each be assessed against the same National Standard. 1 Local authorities cannot add their own additional criteria to complement the National Standard.3
Local authorities will be responsible for assessing whether funded ELC providers are compliant with the National Standard: "As the primary guarantors of quality, local authorities need to satisfy themselves that a funded provider is offering a high quality of ELC for children in line with the National Standard."3
This includes assessment of whether its own local authority ELC settings meet the National Standard. Although as highlighted previously, Care Inspectorate quality evaluations have a substantive role in the National Standard, the Inspectorate does not have a role in assessing if the provider meets the standard overall.
Under the ELC expansion, local authorities have several roles. They will be:
providers of funded ELC through their own services
procurers of funded ELC from partner providers and
assessors of all funded ELC services in their area, ensuring they meet the National Standard.
The Scottish Government noted in the FAQs that it expects authorities will have 'clear and concise' procedures in place for assessing eligibility. As with the Scotland Excel guidance on sustainable rates, the Scottish Government stated that further supporting materials for assessing the National Standard were to be published in March 2019.3 The Scottish Government has stated that guidance on assessing the business sustainability criteria within the National Standard will be published in late April 2019, but to date, there has been no indication as to when other support materials for assessment of the National Standard will be provided.6
Pre-August 2020
All providers that wish to deliver funded ELC from August 2020 will need to be compliant with the National Standard.
According to the Operating Guidance, existing providers already delivering funded ELC will be required to meet the National Standard from August 2020 in order to continue delivering funded ELC.1 The FAQs state that, if it is evident that a current provider will not meet the National Standard from August 2020, parents must be contacted in sufficient time for them to make alternative arrangements if they wish to do so.2
The Scottish Government's Delivery Support Plan (discussed in the section of this briefing on 'Partner provider sustainability') states that, in order to help providers - including existing providers - meet the relevant Care Inspectorate quality evaluation National Standard criteria ahead of August 2020, the government will:
"provide additional funding to the Care Inspectorate to enable them to recruit additional Improvement Advisors. These Advisors will work closely with providers, in particular those who do not yet meet the relevant National Standard criteria, to improve the quality of ELC provision."3
From August 2020
Once the National Standard is in effect, if a funded ELC provider is found not to be meeting one or more of the National Standard criteria, a ‘service improvement period’ will apply.1 This gives the provider the opportunity to improve and meet the criteria it was considered they were not being met.
When a funded ELC has been evaluated, either by the Care Inspectorate or the local authority, as bring non-compliant with National Standard criteria, the local authority is required to informe the provider as to:
which National Standard criteria and sub-criteria are not being met
what evidence they have that the criteria is not being met
how the service can improve their practice to meet the criteria
what enhanced improvement support will be available to ensure the quality of provision improves and
the specific review dates for monitoring during and at the end of the ‘service improvement period’.1
After the service improvement period, the authority will decide if sufficient improvements have been made for the setting to continue to provide funded ELC.
If after the service improvement period the National Standard criteria are still not being met, the FAQs state that the service will cease to be funded provider. A transition phase (of approximately three months) will implemented in order to allow parents to transfer their child over to a new provider of funded ELC.1
Service model
The Scottish Government stated in its 2017/18 Action Plan that: "our policy vision will be underpinned by a more progressive service model." As part of the expansion, the Scottish Government has set out new Service Model for the delivery of funded ELC which will determine:
how parents access funded ELC for their child
the criteria providers must meet in order to deliver funded ELC and
how ELC is delivered (in line with the Scottish Government's four principles of quality, flexibility, affordability and accessibility).
The Scottish Government states that (as of August 2020) the Service Model for delivering funded ELC will:
prioritise the provision of high quality ELC
offer parents a choice of settings in which their child can receive their funded ELC entitlement
increase overall levels of flexibility
be provider neutral
ensure financially sustainable provision across the early learning and childcare sector and
promote and encourage fair work practices, including enabling payment of at least the real living wage to all childcare workers delivering the funded early learning and childcare entitlement. 1
The Scottish Government considers the above will be delivered through the FFtC approach as underpinned by the National Standard.
Becoming a provider of funded early learning and childcare
Currently local authorities decide how and when they procure ELC provision from partner providers. Respondents to the National Standard considered that the process for becoming a funded ELC provider under the expansion ought to be standardised, so that it was not different, for example, between local authority nurseries and private nurseries.1 In addition, respondents highlighted the importance of clear and transparent guidance for providers about the process of becoming a funded ELC provider, suggesting that the process should be accessible and not overly bureaucratic.1
Under the new Service Model, the Scottish Government anticipates three key steps in the application to become a provider of funded ELC, as follows.3
first, a potential provider will need to meet the criteria outlined in the National Standard
once the local authority has confirmed that the provider meets the National Standard, they will make an offer to the provider of a 'locally-set sustainable funding rate' and
if agreed, a contract will then be signed between the authority and partner provider.
The precise nature of this process has yet to be confirmed, although the Scottish Government had indicated that a template for funded provider applications will be made available to local authorities.4 Guidance is being developed by Scotland Excel which will set out options for authorities to consider when redeveloping their processes for assessing funded ELC providers.5 As with the other support materials developed by Scotland Excel, guidance on commissioning ELC services was due for publication in March 2019 but is now expected to be published in late April 2019.6
As they are currently, each local authority will continue to be responsible for implementation of the process of becoming a partner provider, therefore it is anticipated that there will be variation in how local authorities enter into contracts with funded ELC providers. The Operating Guidance anticipates that these agreements should include partner providers' commitment to:
guarantee high-quality ELC for children
ensure all hours of funded ELC are free at the point of access
commit to paying the real Living Wage to staff delivering funded ELC
commit to working within the local authority's delivery model
attend local authority development/consultation sessions (or equivalent)
have on-going, constructive communication with local authorities and
have open, regular communication with parents.4
The Scottish Government states that there ought to be a clear and consistent level of support provided by local authorities to all ELC services, in line with the 'provider-neutral' approach. By entering into agreements with partner providers, local authorities will be expected to support them via:
providing a sustainable funding rate
providing additional funding for the free meal commitment
giving appropriate consideration to the potential impact policy decisions might have on the business sustainability of partner providers
fair and transparent payment practices
supporting providers to make reasonable changes to meet additional support needs
supporting parents to make informed choices and
monitoring compliance with the National Standard.4
Partner provider sustainability
Having reviewed how the FFtC Model and National Standard will operate, this section focuses on how the Scottish Government and local authorities will support partner providers in delivering the entitlement to 1,140 hours. It also highlights concerns that have been raised about the sustainability of partner providers and what actions have been undertaken to address these.
Support for early learning and childcare providers
The Scottish Government has emphasised both the need for a blended economic model of ELC providers, and the contribution of partner providers to the expansion: "It is important that the funded entitlement is delivered through a mix of providers across the public, private and third sectors, including childminders, so that parents and carers can choose the provision that is best for their child."1
A Delivery Support Plan (the "Support Plan") for ELC providers was published by the Scottish Government in December 2018. The Support Plan states that:
"Providers across all parts of the sector are vital to enabling the delivery of the expanded entitlement. However, we understand that this level of investment and change in the sector creates challenges for providers."1
According to the document, the Support Plan will take action to support partner providers across four areas.
Support the financial sustainability of providers: for example, through the 100% business rate relief for private nurseries introduced in April 2018.
Strengthen partnership working: for example, through the ELC Partnership Forum established in October 2018.
Support workforce recruitment and training: for example, by ensuring that there is appropriate training support for childminders.
Improve communications with parents and carers: for example, by developing an online resource to help parents make informed choices about the best funded ELC provider for their child.1
These actions reflect the key concerns partner providers have raised with the Scottish Government about the expansion of ELC.1 Other partner provider concerns noted by the Scottish Government in the Support Plan include: the partner provider rate; a (perceived) lack engagement; lack of access to capital funding and partner providers not being involved in the phasing of the expansion to 1,140 hours in some areas.1
A sustainable rate
The need for a sustainable, realistic funding rate to be set for partner providers by local authorities was emphasised throughout responses to the National Standard consultation.1 Respondents highlighted the need for a rate which would take into account all relevant operating costs, and the requirement (under the National Standard) to pay the Living Wage to staff. While supportive of this latter requirement, respondents felt they would be unable to pay the Living Wage unless funding rates increased.1 Moreover, it was considered that:
the process by which local authorities determine their rate ought to be transparent
that, in order to have genuine provider neutrality, the rate ought to be the same for different provider types and
the rate ought to be paid timely and in advance to providers, not in arrears.1
In May 2018, a joint statement from Early Years Scotland, a membership organisation for ELC providers and practitioners, said:
"[to] succeed in truly realising Provider Neutral status across the sector, an equal rate per child per hour requires to be allocated to every setting, irrespective of whether the provider is a local authority, independent or voluntary setting."(Emphasis in the original)4
The Operating Guidance states that, in order to determine sustainable rates: "it is important to have a shared understanding of the cost of delivering the funded entitlement. This will support local authorities to establish an affordable and sustainable rate for delivery of funded hours across all settings."5 In addition, the Operating Guidance notes that it is 'vital' partner providers are paid promptly and that local authorities should seek to pay a partner provider within 30 days of the start of term, if not sooner.5
Participation
Angus Council stated that representations had been made to the authority during consultation on its ELC expansion plan that: "in order to deliver the expansion to 1,140 hours private providers would need an increase in payment of at least £1.25 per hour to make partnership working viable for their business. "1
The 2018 NDNA survey reported that only 7% of nurseries said they could deliver 1,140 hours at the current funding rate (i.e. the rate paid for 600 hours), with 46% of respondents stating that they were unlikely or very unlikely to get involved in the expansion to 1,140 hours.2 The survey states: "A lack of funding is cited as the main barrier to settings, with the overwhelming majority of nurseries stating a better hourly rate would enable them to have more confidence to provide the expanded scheme."2
It was noted in a December 2018 paper for Aberdeenshire Council's Education and Children's Services Committee that: "consultation with partner providers strongly indicates that engagement with 1140 is dependent on rate." Aberdeenshire Council plans to increase its partner provider rate to £5.31 by 2020 (up from the current rate of £3.94).4
Rate increases
Several authorities have stated that the rate they will pay to partner providers to deliver the expanded ELC entitlement will be more than what they currently pay for 600 hours. This list is not exhaustive, but offers some examples.
South Lanarkshire currently pays £2,020 for 600 hours (approximately £3.36 an hour) but: "anticipate setting £6 per hour for the delivery of the 1,140 hours."1
Both Orkney Islands and Comhairle nan Eilean Siar stated in their expansion plans that their partner provider rate would increase to £4.50 by 2020 (up from £3.67 and £3.65 respectively).2 3
Perth and Kinross stated in its expansion plan that: "Currently PKC pays an hourly rate of £3.23 to Partner Providers. There are plans to increase this rate incrementally in the coming years before the full roll out of 1140 hours ELC."4
Glasgow City Council announced in February 2019 that it would increase its partner provider rate from £3.50 to £5.40 per hour, as of August 2019. According to the Council's Education, Skills and Early Years Committee:
"Accelerating the implementation of a Glasgow sustainable rate from August 2019 rather than 2020 will afford providers the opportunity to plan for the implication of the expansion from a platform of financial certainty and take appropriate steps to enhance their capacity to attract, retain and invest in quality staff and consider the impact on their provision of non-statutory childcare services."5
Income
As noted in the Financial Review, the majority of partner provider income is generated by fees paid by parents for non-funded ELC. As the expansion to 1,140 hours continues, the balance of funded and purchased ELC will change. The Support Plan explains: "the share of income accounted for by the funded entitlement in these providers is expected to increase ... as settings allocate more of their capacity towards delivering the funded hours."1
It was noted by Angus Council that, in a survey of partner providers, while all almost all were keen to deliver the 1,140 hours: "concerns were raised that any increase in funded hours would detrimentally impact on income."2 In addition, in September 2017, COSLA stated:
"There is a risk, and reality already in some areas, that expansion and increase in flexibility by local authority ELC settings negatively impacts on private and third sector providers, as families opt for local authority settings in the lead up to 2020, prior to the delivery of the new service model."3
The prevailing parental preference is for their child to receive their ELC from a local authority provider, in particular a nursery attached to a primary school. As these services increase their capacity and flexibility under the expansion, parents may transfer their child to such a nursery, resulting in partner providers losing business to local authority services.
Staffing
Staff retention and recruitment has been highlighted as an area of concern. As noted by the Scottish Government in the Support Plan: “The recruitment activity of local authorities can also impact on the sustainability of funded providers.”1 The Operating Guidance also states that:
"It is important that local authorities give appropriate consideration to these potential impacts in exercising their statutory duties, undertaking recruitment activity, and in applying ELC expansion planning principles."2
It was reported in January 2019 that private nurseries have lost staff to local authority providers offering higher salaries.3
The Scottish Government has agreed with COSLA that, to support partner providers with their recruitment needs ahead of August 2020, they will allow private and third sector ELC providers (who are registered with the Care Inspectorate) to advertise jobs free of charge on myjobscotland.1 The service has been live since March 2019.
Partnership working
The Scottish Government has stated that it: "expect[s] local authorities and funded providers to work together meaningfully and in genuine partnership to deliver flexible ELC provision, while continuing to ensure a high quality experience for children is maintained and accessible to all."1
In October 2018, the Scottish Government, together with COSLA, established the ELC Partnership Forum to:
"promote meaningful partnership working across the ELC sector and to provide a forum for the sharing of best practice along with exploring new ideas and perspectives ... The group will also play a key role in identifying and proposing solutions to specific issues raised by providers and/or local authorities."2
Concerns, however, have been raised that local authorities are focusing their expansion efforts on their own ELC services and not fully involving partner providers. In January 2019, the Cabinet Secretary for Education and Skills stated in evidence to the Education and Skills Committee: "I am aware of the concerns that have been expressed in different parts of the country about whether the private sector is securing quite as much of a role in this expansion as they might have considered they should have been able to get."3
As mentioned in the section of the briefing on 'Local authority expansion plans' the Scottish Government guidance regarding making best use of assets includes a sequential decision-making process for authorities. In this process, authorities are to make full use of existing assets first, before enhancing their use of partner provider assets.4
The Scottish Government expects that: "around 130 million hours of funded ELC to be delivered in total at full rollout of 1140 hours in 2021-22 with around 100 million of those hours provided in local authority settings." This reflects the near 75%/25% division in funded ELC delivery between public and partner providers currently observed.5 The Minister for Children and Young People has also stated that:
"at the start of the expansion, the proportion of the market that the partner providers occupied was around 23 per cent and ... at the time of the completion of the expansion, it will be around 23 per cent."6
In response to the concerns of partner providers about the lack of partnership working and providers not being actively involved in local ELC expansion, NDNA Scotland agreed a set a partnership principles with COSLA in late 2018. The principles include: clear guidance in relation to expectations on both sides of the partnership; transparency of decision making by both local authorities and providers which impact on service delivery and mutual respect for the skills, knowledge and expertise held by all parties.7
Progress and Evaluation
This final section considers the progress local authorities are making in being ready to deliver 1,140 hours of funded ELC from August 2020. As discussed earlier in the briefing, local authorities were asked to develop local expansion plans, including investment in infrastructure.
As highlighted by earlier sections, the Scottish Government objectives for the expansion of funded ELC are that it improves children's outcomes and support parents into work, training or study. The last part of this briefing discusses how the expansion of ELC will be evaluated.
Expansion progress
The expansion of ELC to 1,140 hours is a phased process, with full roll-out to be delivered by August 2020. Local authority progress towards completion of the expansion is currently being monitored bi-annually through data returns. The first report into ‘Early Learning and Childcare Expansion Delivery Progress’ (the "Progress Report") was published in December 2018. Local authorities were asked to submit data relating to five key indicators, with their forecasted and actual numbers, covering the period from May 2018 to September 2018.1 The next Progress Report is due in June 2019.
Workforce
Councils forecast that they would have 1,571 additional full-time equivalent (FTE) local authority staff in place by the end of September 2018. According to the Progress Report the actual number was 1,296. The report notes that a number of staff yet to be recruited are the additional graduates for nurseries in deprived areas.1
There has been criticism of the progress made towards workforce expansion. In February 2018, Audit Scotland concluded that Scottish Government activity to increase the ELC workforce did not start soon enough and that at a local level, initial authority expansion plans lacked detail about how councils were going to increase staff levels.2
Moreover, a December 2018 press release from UNISON stated that there were not enough people attending college or on in-work training courses in order to meet the staffing levels needed for the expansion to 1,140 hours.3
Capacity
Capacity figures from the Progress Report show that local authorities had 80 fewer places than forecast. According to the Progress Report local authorities were asked to provide forecast and actual capacity totals for local authority settings, not the capacity anticipated or achieved by partner providers. Therefore, progress partner providers are making towards expanding capacity is not evident from this report.1
Local authorities reported a higher number of three and four-year olds (4%) receiving more than 600 hours of funded ELC than forecast.1 The number of two-year olds receiving more than 600 hours was also higher: 1,195 actual compared to 951 forecast. This higher figure was attributed to the expansion rolling out to settings with more two-year olds than anticipated as local expansion plans evolved.1 It was also noted that some councils had not included eligible two-year olds in their forecast figure but did count them in the actual figure reported. Therefore, caution as to the difference between the forecast and actual figure was advised.1
Infrastructure
On infrastructure, the Progress Report states that councils reported 70 capital projects had been completed by September 2018, with 28 projects under construction and 679 projects actively being developed. It is not possible to discern from the report how many, if any, of these projects related to local authority premises or were work undertaken on partner provider sites.1
Evaluation of the early learning and childcare expansion
The impact of the ELC expansion on children and families will be evaluated by the Scottish Study of Early Learning and Childcare (SSELC). This is a new study designed to evaluate the long-term impact of the expansion from 600 to 1,140 hours of funded ELC hours on child, parent, and family outcomes. The SSELC is split into a number of different phases of data collection.
Phase 1 of the SSELC commenced in November 2018 with the collection of baseline data by ScotCen Social Research. Baseline information is being gathered from approximately 600 eligible two-year olds, currently in receipt of 600 hours of funded ELC, from across 18 local authorities. As some local authorities already offer more than 600 hours of funded ELC, not all 32 are participating in this baseline collection.1
The data is being collected via two questionnaires and observation of the ELC setting. One questionnaire is completed by parents and the other is completed by the child's key worker and informed by their observations of the child in the nursery.2 Participating settings are also observed by the Care Inspectorate inspectors to provide context relating to the quality of ELC that each child experiences. The observations made by the inspectors for the SSELC have no bearing on Care Inspectorate gradings.1
Phase 2 of SSELC was put out to tender in December 2018 and awarded to ScotCen Social Research in February 2019.4 This phase will collect data on:
four and five-year olds who have received 600 hours of funded ELC and are starting Primary 1 in 2019
eligible two-year olds (now three-year olds) from Phase 1 who have had 1 year on 600 hours of funded ELCand
a control group of three-year olds who are starting ELC in August/September 2019.14
Data will be collected in the same manner as Phase 1.4 The data collected will relate to children's cognitive development, as well as their social, behavioural and emotional development.
For analysis of parental outcomes, data will be gathered about the health and welling of parents in addition to uptake of work, study or training.1 An analysis report of the baseline data is due to be published by the Scottish Government in 2020.9 The first full findings will be available in 2024.10
The purpose of the evaluation is to understand the impact increasing the number of funded ELC hours has had upon child and parental outcomes. The baseline gathered in Phases 1 and 2 about two-year olds and three to five-year olds in receipt of 600 funded hours, will be compared to data gathered later from children (in both age groups) receiving 1,140 funded hours.
At present, there are not sufficient numbers of childminders providing funded ELC to provide statistical analysis of their use. A separate qualitative study is currently being scoped.1
Work on assessing the 'value for money' aspect of the ELC expansion is ongoing.1
New questions have also been added to the 2018 Scottish Household Survey (SHS) regarding ELC, which will help inform future assessments of ELC.13 Questions include:
what type of childcare parents use (i.e. local authority nursery, childminder, friend or relative)
how many ELC hours a week parents use (term-time and holidays)
how many hours a week of funded ELC parents use
the parent's main reason for using childcare
household spend on childcare and
reasons why parents do not use funded ELC.13
Annex A
Early learning and childcare delivery trials
In late 2016 and early 2017 ELC delivery model trials were established in 14 local authorities across Scotland. The trials aimed to test different models of delivering funded ELC to: "inform the wider ELC sector of key successes and challenges related to the implementation of 1140 hours".1
The trials lasted from between six to twelve months, with the last of the trails being completed in June 2018. Two delivery models were tested: single-provider and blended provision (whereby a child received funded ELC in two or more different settings). For the purposes of these trials, blended provision was offered by a childminder and an ELC provider. This is consistent with the Scottish Government's aim to bring more childminders into funded ELC.1
Of the 14 trials, seven authorities offered the blended model and five single-provider. Two trials were single-provider with the addition of an outdoor/forest kindergarten session as part of a child’s ELC provision. Annex A of the Evaluation of the Early Learning and Childcare Delivery Trials report (the "Delivery Trails Evaluation") provides a brief summary of the nature of the trail undertaken by each authority.1
The Delivery Trails Evaluation was published in May 2018 (before all the trials were complete). It was informed by the results of visits made to each trial by Education Scotland and the Care Inspectorate, and by information gathered from conversations with trial leads and local authority self-evaluations. The Delivery Trails Evaluation cautions that its findings are largely anecdotal and ought to be considered preliminary.1
Assessment of the trials by Education Scotland and the Care Inspectorate focused on quality of the ELC provision. Overall the Delivery Trails Evaluation reports that no single delivery model was found to be more effective at delivering high quality childcare and that the models observed were reflective of local circumstances.1
More broadly, the Delivery Trails Evaluation considered what worked well to encourage uptake, such as helping parents to complete the application form for participation in the trial, the use of parental questionnaires to understand their needs and ensuring that parents were made aware of the benefits of ELC.
The Delivery Trails Evaluation also identified reasons why parents did not want to participate in the trails, for example, some parents – especially those not in work – said they didn’t need the ELC; others felt that their children were too young to be in ELC for 30 hours a week (in particular the parents of two-year olds). These reasons for not participating in the trails are the same as have been previously noted as why parents do not use funded ELC.
The Delivery Trails Evaluation noted that those trials working with childminders were able to deliver a higher level of flexibility for parents, as some childminders do not operate fixed hours. In regard to flexibility, the Delivery Trails Evaluation highlighted examples of providers changing their model in order to offer all-day, full year provision, although some trails noted an unwillingness from staff to move to year round contracts which had caused difficulties.
According to the Delivery Trails Evaluation, parents whose children participated in the trials spoke of having more time for other activities, this included working and hobbies. Parents also spoke positively of the perceived impact the extended number of hours had upon their child's learning and behaviour. The opportunity for access to outdoor learning was particularly welcome, with some parents reporting that their children were sleeping better and had increased in confidence.
The timeline at Annex C also demonstrates that the trials were not complete before:
The Scottish Government launched its consultation on the Service Model (including the National Standard and Funding Follows the Child model) in March 2018; and
Local authorities were asked to submit their local delivery plans in both September 2017 and March 2018.
Annex B
Early learning and childcare in England
Five hundred and seventy hours of funded childcare per annum for all three and four-year olds was introduced in England in 2010.1 This is usually taken as 15 hours a week over 38 weeks, although there is the ability to ‘stretch’ this entitlement so that fewer hours are taken over more weeks (it is not possible to condense the number of weeks).2
The entitlement to 570 hours was extended to disadvantaged two-year olds in 2013.1 Two-year olds are entitled to the 570 hours if their parent is in receipt of a qualifying benefit.4 This is similar to Scotland with a few differences as outlined in the below table. The primary difference is the amount of take-home pay per month a household in receipt of Universal Credit can receive.
| England | Scotland |
|---|---|
| Income Support | Income Support |
| Income-based Jobseeker's Allowance | Income-based Jobseeker's Allowance |
| Income-based Employment and Support Allowance | Income-based Employment and Support Allowance |
| Universal Credit, where household take-home pay is £1,283 a month or less, after tax | Universal Credit, where household take-home pay is £610 a month or less, after tax |
| Tax credits and you have an income of £16,190 or less a year, before tax | Child Tax Credit, but not Working Tax Credit (with income less than £16,105) |
| The guaranteed element of State Pension Credit | State Pension Credit |
| The Working Tax Credit 4-week run on. | Both maximum Child Tax Credit and maximum Working Tax Credit (with income under £6,420) |
| Support through part 6 of the Immigration and Asylum Act 1999 | Support under part 6 of the Immigration and Asylum Act 1999 |
| Incapacity or Severe Disablement Allowance |
mygov.scot and gov.uk
Department for Education (DfE) operational guidance for local authorities and providers states that authorities should encourage providers to deliver flexible packages of ELC, within the following parameters:
no session is longer than 10 hours
there is no set minimum session length
eLC is not provided before 6.00am or after 8.00pm
that sessions can take place on any day of the week, including Saturday and Sunday
a child can only receive ELC from a maximum of two sites in a single day
the quality requirements as set out in regulations and statutory guidance are met and
there are no artificial breaks in the day.5
In 2015, it was announced that some families would be eligible for an additional 570 hours of funded childcare, bringing the total amount per annum to 1,140 hours (30 hours a week, over 38 weeks).2 According to the DfE Policy Statement accompanying the Childcare Bill: "the new entitlement to 30 hours free childcare is intended to support working parents with the cost of childcare and enable them, where they wish, to return to work or to work additional hours."7
The extended entitlement applies to those three and four-year olds whose parent (and partner if applicable) are either in work or are either on parental, sick, or annual leave, and each earn at least the National Minimum Wage or Living Wage for 16 hours a week. Parents are not eligible for this extended entitlement if one earns more the £100,000 a year.2
The extended offer also applies to self-employed parents, but they are not required to meet the minimum income level for the first year. In order to demonstrate their eligibility for the additional 570 hours, parents must apply for a code through their childcare account. This code is then validated by the childcare provider.2
Funding and costs
Local authorities in England receive funding central Government to meet their duty to secure childcare. Authorities then pass the funding they receive on to ELC providers.1
The Early Years National Funding Formula (EYNFF) sets the hourly funding rate that each local authority receives from DfE to deliver ELC to three and four year olds. There are separate funding arrangements for two-year olds. This rate is calculated for each individual authority, however, there is minimum rate the government provides to local authorities of £4.30 per hour.2 1
The EYNFF has three elements:
a base rate of funding per child
an additional needs factor and
an area cost adjustment.
House of Commons Treasury Committee (2018).
The EYNFF has a minimum-pass through rate which ensures that local authorities pass on 95% of the funding they receive from the DfE to providers, limiting the amount that can be retained centrally by authorities to 5%.4
In 2017/18, the average hourly rate passed on to private, voluntary and independent childcare providers by local authorities was £4.34.1
In recognition that some local authorities pay different hourly rates to different childcare providers, based on their settings, from 2019/20, all local authorities will be required to pay a universal base rate to providers delivering ELC to three and four year olds.4
Early learning and childcare in Wales
The Welsh Government has committed to providing 30 hours of funded ELC to three and four year olds, of working parents, for up to 48 weeks a year. This is known as the Childcare Offer. 1 The Welsh Government has stated that the primary policy aims of the Offer are:
To enable more parents particularly mothers to return to work;
To increase the disposable income of those in work and help counteract poverty for those in low-paid jobs; and
To encourage child development and school readiness.1
The 30 hours are a mix of two elements: First, all three and four-year olds in Wales are entitled to a minimum 10 hours of week of Foundation Phase Nursery (FPN) provision.3 FPN is based upon the principle of learning through play and covers seven areas of learning:
personal and social development
language, literacy and numeracy
maths
Welsh language (unless the provider is a Welsh-speaking)
knowledge and understanding of the world
physical development and
cultural development.3
Second, those three and four year olds whose parents earn the equivalent of 16 hours per week at National Minimum Wage or National Living Wage (depending on their age) can access up to an additional 20 hours a week of ELC from a registered provider. Parents who earn over £100,000 are not eligible for the additional 20 hours.
The national rate paid by the Welsh Government to local authorities is £4.50 an hour. Providers are not allowed to pass on the costs of delivering childcare to parents but can charge for additional elements such as food and travel costs
Eligible children from disadvantaged areas aged two to three are entitled to 12.5 hours a week of childcare under the Flying Start programme.5 The programme forms part of the Welsh Government's Tackling Poverty Programme. In addition to the 12.5 hours a week care, Flying Start includes access to health visitors and parenting support. Eligible two and three-year olds are identified by their geographic region, not the benefit entitlement of their parents.6
Annex C
Scottish Government ELC expansion activity timeline (2014-2018)
2014
November: The Scottish Government announces: “in the years ahead we want to build upon that to almost double the number of free hours to 30 hours a week.”
2015
June: The Independent review of Scotland's early learning and out of school care workforces, commissioned by the Scottish Government, is published.
2016
January: The First Minister announces £1 million of investment for trials to test different models for increasing the ELC entitlement.
January: The ‘Early learning and childcare trials discussion paper’ is published.
January: The Early Learning and Childcare Strategic Forum is established.
June: The ‘Early learning and childcare trials discussion paper: analysis of responses’ is published analysing responses to the January 2016 discussion paper.
September: A ‘Financial review of early learning and childcare in Scotland: the current landscape’ is published.
October: The Scottish Government launches ‘A Blueprint for 2020: Expansion of Early Learning and Childcare in Scotland Consultation' outlining four guiding principles for the expansion of ELC: Quality, Flexibility, Accessibility and Affordability.
October: The ELC Programme Board is established.
November: The ELC Leaders Forum is established.
November: Aberdeen, Edinburgh and Scottish Borders are announced as the first three ELC expansion trial areas.
December: Eleven additional locations for ELC expansion trails are announced.
2017
January: The Scottish Government announces the expansion of the early years workforce to include 435 additional graduates in the most deprived areas by August 2018.
January: ELC trails commence in Aberdeen, Edinburgh and the Scottish Borders.
February: The Additional Graduate Working Group is established.
March: ‘A blueprint for 2020: the expansion of early learning and childcare in Scotland – consultation analysis report’ is published which analyses responses to the October 2016 consultation.
March: The ‘Blueprint for 2020: The Expansion of Early Learning and Childcare in Scotland - 2017-2018 Action Plan’ is published.
March: ‘Drivers and barriers to uptake of early learning and childcare among two year olds’ is published. This research was commissioned by the Scottish Government from IPSOS Mori.
March: ‘A Blueprint for 2020: Early Learning and Childcare Expansion Planning Guidance for Local Authorities’ is published.
June: The ELC Finance Working Group is established.
June: The ELC Service Models Working Group is established.
August: The Scottish Government issues a financial template to local authorities to assist in developing their initial expansion plans.
September: Local authorities submit initial ELC expansion delivery plans to the Scottish Government.
October: The ‘Expansion of early learning and childcare in Scotland: Quality Action Plan’ is published.
October: The Scottish Government announces that funding for ELC will increase to £840 million a year by 2021-22.
December: The first 'Expansion of Early Learning and Childcare: Evaluation Report' of the ELC expansion to 600 hours (and inclusion of eligible two-year-olds) is published.
2018
March: The Scottish Government publishes the ‘Early Learning and Childcare Service Model for 2020: Consultation Paper’.
March: Local authorities submit revised financial estimates to the Scottish Government.
April: A multi-year funding package for the expansion of ELC is agreed between the Scottish Government and COSLA.
May: The ‘Early Learning and Childcare Expansion delivery trials: evaluation’ report is published.
August: The ‘Parents' views and use of early learning and childcare: report’ is published.
September: The ELC Joint Delivery Board is established.
October: The Scottish Government publishes the ‘Early learning and childcare service model for 2020: consultation analysis’.
October: The ELC Partnership Forum is established with COSLA.
December: The 'Early learning and childcare: delivery progress report' is published.
December: The Scottish Government publishes:
Blueprint for 2020: The Expansion of Early Learning and Childcare in Scotland. Funding Follows the Child and the National Standard for early learning and childcare providers: Principles and Practice.
Blueprint for 2020: The Expansion of Early Learning and Childcare in Scotland. Funding follows the child and the national standard for early learning and childcare providers: Operating Guidance.
Blueprint for 2020: The Expansion of Early Learning and Childcare in Scotland. Funding follows the child and the national standard for early learning and childcare providers: Frequently Asked Questions for Local Authorities and Providers.
Blueprint for 2020: The Expansion of Early Learning and Childcare in Scotland. Delivery Support Plan for Early Learning and Childcare Providers.
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