Meeting of the Parliament

Meeting date: Wednesday, October 31, 2018

Official Report 1306KB pdf

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Early Years

The next item of business is a debate on motion S5M-14521, in the name of Alison Harris, on early years. I ask those who wish to speak in the debate to press their request-to-speak buttons.

15:53  

The Scottish Conservatives are pleased to bring this debate to the Parliament today. The motion in my name addresses a few serious points that, thus far, have been ignored by the Scottish Government. I hope that we can reach cross-party agreement today and send a signal to all the hardworking childcare partnerships in Scotland that their concerns will be addressed.

Four years ago, the Scottish National Party pledged to almost double childcare provision from 600 hours a year to 1,140 hours a year by August 2020 for all three and four-year-olds, and some eligible two-year-olds. It was quite the headline, but one question lingered: how would that be achieved?

It is clear that there has been a distinct lack of planning in following through on that promise, and if it is left to continue at its current pace, the 2020 target will not be met—in fact, the level of provision is likely to decrease. Almost half of the nurseries say that they are unlikely to meet the target of 1,140 hours, with many pointing to underfunding as a significant barrier to doing so. That has been echoed by Audit Scotland, which, in its recent report on the expansion of childcare provision, highlighted a staggering black hole of £160 million a year in the policy’s funding.

The motion focuses on one of the main reasons why the policy is failing: the lack of inclusion of the private sector, despite the minister’s constant assurances that it is a valued partner. There are more than 6,000 private childcare providers in Scotland. They play a huge part in developing Scotland’s children, but they are being swept aside. I have met several partnerships and local authorities, and one theme has been prevalent. There is a total lack of consistency and understanding in the roll-out of the 1,140 hours policy across local authorities.

The issues that private providers face can be boiled down to three major problem areas: the revenue funding rates across local authorities, the catastrophic staffing drain, and the lack of access to capital funding for private providers.

As things stand, there is no standard hourly rate of funding across Scotland. That means that private providers in some local authority areas receive significantly less than those in other local authority areas. Private providers receive varying rates across council areas, from £3.75 to £4.50 to £5.31. There is material variation and a total lack of consistency.

There is one thing that I want to make clear. The private sector nurseries are not big, multinational corporations; they are usually small, independent organisations with very tight profit margins. In operating at such a level, the slightest change in external factors can lead to difficult business decisions needing to be made. The lack of top-line funding prevents private nurseries from being able to pay many of their staff even the living wage, and the impact of that is that local authorities are able to attract staff who work in private nurseries to work for more money and fewer hours. That has a devastating impact on private providers and is causing a mass exodus of their childcare staff, which will ultimately affect the delivery of high-quality childcare in the long run.

That is why the Scottish Conservatives will support Mary Fee’s amendment. The staffing problem is a huge thorn in the side of the feasibility of the policy in delivering good-quality childcare for children across Scotland.

I turn to the third and possibly the most avoidable problem that private providers face: the lack of access to capital funding. Capital funding is supposed to be available to all childcare providers, but many private providers that I have met have noted with frustration that local authorities are denying them access to funding and instead almost exclusively awarding it to their own council-run nurseries, without even considering private partnerships. Worse than that, there is confusion in several local authorities about whether private providers are entitled to receive capital funding. Yesterday, I spoke to representatives from one local authority who were quite indignant at the idea of private providers expecting to receive capital funding. Another local authority basically said, “Oh no. They’re not entitled to that.”

That can be cleared up today. Will the minister write to each and every local authority to make clear the correct position regarding access to capital funding? I would be happy to give way to her now if she will confirm that she will do that.

I would be more than happy to write to clarify the position. There is an issue around state aid in respect of local authorities providing capital funding directly to private businesses. However, some—Angus Council in particular—have found a way round that. Angus Council provides capital grants funding. We are sharing that learning throughout the country through the early learning and childcare partnership forum. If Alison Harris would like me to write to all the local authorities to explain the situation, I would be more than happy to do so.

I would like the minister to do that straight away, please, because there is confusion. The fact that the minister mentioned one local authority although there are numerous local authorities out there is indicative of the Government’s and the SNP’s indifference to the scale of the problem and the apparent inability to take on board what everyone is saying.

There has been plenty talk of partnership and engagement, but those warm words are worryingly hollow. I worry that the lack of understanding of the true partnership that is required between local authorities and private providers is preventing any meaningful progress from ever being made. If the expansion is to succeed, that needs to change—and it needs to change now.

Although there is cross-party support for the 1,140 hours target, we have to take a sensible, practical approach to expanding childcare. In this day and age, flexibility is the number 1 childcare concern for many parents, but 90 per cent of council nurseries do not provide full-working-day childcare places and almost none of them offers places that start before 8 in the morning or which last until after quarter past five in the evening. That is just not adequate, because many parents and carers work outside the available time windows. As it stands, many parents are unable to access their full entitlement due to full-time work commitments.

Often, it is private providers that can offer more flexible hours, but if the partnership continues to break down, they will go out of business and that flexibility will disappear.

I hope that all parties will support the Conservative motion and Labour’s amendment. We all want Scotland to have a successful childcare system; we are all behind the 1,140 hours. Unfortunately, however, since the big headline announcement four years ago, the Scottish Government’s implementation has been poorly planned, staggeringly unclear and damaging to children, parents and nurseries throughout Scotland.

I move,

That the Parliament is committed to improving the availability of, and flexibility in, the provision of high-quality childcare; recognises that, in order to deliver the Scottish Government’s ambitions, there has to be much more effective partnership working between state and private sector providers; is very concerned therefore at the recent findings that have been issued by the National Day Nurseries Association, which show that fewer than one-third of private sector providers are currently in a position to expand place numbers because they feel that there has been a lack of engagement from both the Scottish Government and some local authorities when addressing their concerns about access to capital funding and the lower payments being made to many private sector providers; believes that these concerns are in line with those set out by Audit Scotland earlier in 2018, when it reported that there were “significant risks” within the current Scottish Government policy on childcare, and demands urgent action from the Scottish Ministers to ensure that private sector providers, as well as state sector providers, are able to meet their full potential when it comes to delivering expanded childcare.

16:01  

From August 2020, all three and four-year-olds and eligible two-year-olds will be entitled to 1,140 hours of high-quality early learning and childcare. Thousands of children in our most challenged communities are already benefiting from early phasing. This truly transformative programme has the potential to improve children’s outcomes and to make a significant contribution to closing the poverty-related attainment gap.

Quality sits front and centre of our vision. Throughout this debate, we must remember that children are at the heart of this expansion. That should be a powerful motivation for us all to work collaboratively to overcome the challenges that are inherent in such an ambitious reform programme.

We know that high-quality provision exists across the public, private and third sectors; we know that that provision can take many forms, including nurseries, forest kindergartens, playgroups, children and family centres, specialist voluntary settings, outdoor settings and childminding services. The funding follows the child approach empowers parents to choose the provider that best meets the needs of their child, so long as that provider meets a new national standard and has a place available.

I totally accept the Scottish Government’s aims and ambitions, but does the minister recognise that one sector feels very disadvantaged in promoting the Government’s policy, for exactly the reasons that Alison Harris set out in her speech? We need to address that problem, because unless we have a fully engaged private sector that feels very ambitious, we will not succeed.

Indeed, and I reiterate that this Government’s view is that the private sector will be crucial to our delivery of this ambition.

I will update Parliament later this year on the final standard, which will be informed by the views of the hundreds and hundreds of providers with whom we engaged during our joint consultation with the Convention of Scottish Local Authorities. The standard levels the playing field between local authority, private and third sector providers. All providers have to meet the same quality-driven criteria. There will be an end to locally set requirements to enter partnership and an end to the capping of funded places in private nurseries.

The national standard delivers one of the most important elements of the expansion programme: ensuring that all childcare staff delivering children’s funded entitlement are paid the real living wage. The initiative, which will raise the incomes of thousands of low-paid workers—the vast majority of whom are women—will ensure that we properly value the contribution that our early years professionals make to shaping the lives of our youngest children.

All members in the chamber should welcome this investment.

The minister rightly talks about the importance of standards and the necessity of paying people the real living wage. How does that square with the fact that the National Day Nurseries Association says that its providers are in deficit to the tune of £2 per child per hour? Is the NDNA wrong in its calculations, or is there a funding gap?

The funding deal that we reached with COSLA in April secures the money that is required to ensure the delivery of the living wage commitment. That landmark £1 billion package, which is protected for investment in early learning and childcare, will deliver sustainable rates for all providers from 2020. The hourly rate that is paid to providers across the country will increase significantly.

It is worth putting on the record that COSLA is fully behind a provider-neutral approach that puts quality first. However, I and my counterpart in COSLA, Councillor Stephen McCabe, recognise that more needs to be done to ensure that local cultures and systems fully realise our shared vision for a provider-neutral, quality-first approach.

I commend to Parliament the partnership working principles that were adopted in September by COSLA’s children and young people board. Those principles, which were developed in consultation with the NDNA, will be embedded in every part of Scotland, and I have already heard that they are driving improved relationships around the country.

We have established the early learning and childcare partnership forum, which enables providers from all sectors and their representative bodies, together with local authorities, COSLA and the Scottish Government, to work together to identify solutions to common challenges. It is early days—the forum met for the first time last week—but it is clear from the update that Councillor McCabe and I received at the ELC joint delivery board meeting this morning that a spirit of joint endeavour is already radiating from the forum. Councillor McCabe and I have committed to attend the forum, if necessary, to help to resolve any significant issues that might arise.

We will ensure transparency in the reporting of local authority progress data, which was reviewed by the joint delivery board this morning, so that local authorities are truly accountable for the local implementation of funding follows the child.

The concern is that far too many local authorities are not engaging in such partnership working. Will the minister clarify—particularly in light of what some of her high-profile SNP colleagues have said—whether she agrees?

You will need to be quick, minister.

I do not agree that that is the case throughout the country. I agree that there are pockets of troublesome, difficult and challenging partnership relationships but, across the country, there is a positive position to report.

We know that there is good practice out there. Last week, the partnership forum heard about actions that are being taken in Angus, Edinburgh and Moray that result in meaningful partnership and providers feeling genuinely valued. I assure providers that are currently experiencing strained relationships with their local authorities that meaningful partnership can and does exist, and Councillor McCabe and I will work tirelessly to ensure that it exists in every part of Scotland.

The Government is absolutely determined that we will support providers in the transition to 2020. Indeed, we have already acted. We introduced the 100 per cent non-domestic rates relief for private properties that are used as day nurseries, and we estimate that that relief will remove the burden of rates for up to 500 businesses. This year’s programme for government also commits us to developing a delivery support package.

Come to a close, please.

We have heard providers’ concerns about sustainability, relationship difficulties, workforce challenges and the need to communicate clearly with parents and families. Those issues will all be addressed in our support package, which we will launch before Christmas.

I call on the Parliament to recognise the commitment of the Scottish Government and COSLA to work tirelessly to support providers from all sectors.

I move amendment S5M-14521.2, to leave out from “recognises that” to end and insert:

“reconfirms its support for expanding the provision to 1,140 hours of funded, high-quality early learning and childcare for all three- and four-year-olds and for eligible two-year-olds through a provider-neutral approach; believes that all frontline staff delivering the 1,140 hours provision must be paid the real living wage; welcomes that funding for the real living wage formed part of the £1 billion multi-year funding package agreed with local government; recognises the concerns expressed by some private providers on local engagement and investment; further recognises recent progress, including the adoption of partnership working principles by COSLA and the creation of an Early Learning and Childcare Partnership Forum; believes that there is a need to ensure best practice on partnership working and investment, such as the approaches adopted in Angus, the City of Edinburgh and Moray that were commended recently by members of the partnership forum, and agrees that the Scottish Government must work with COSLA, individual local authorities and providers themselves to ensure that best practice is replicated in all parts of Scotland.”

16:09  

I thank Alison Harris for lodging her motion for debate.

Childcare is an important issue that impacts on the lives of thousands of families up and down the country every day. Scottish Labour believes that childcare should be flexible, affordable and of high quality, and we support the extension of childcare provision to 1,140 free hours per year for all three and four-year-olds and vulnerable two-year-olds. The debate provides us with an opportunity to assess how the expansion is being delivered and the working relationship between central Government, local government and private nursery providers.

The current childcare system is disjointed and inflexible. No one today would design a system from scratch that looked like that. It is in urgent need of reform. However, the mix of childcare providers that we have today is essential to deliver the extension to 1,140 hours.

Private nursery providers fill a massive gap that council-run providers cannot meet. That is why it is crucial that there are better working relations between Government and private providers. The Tory motion recognises that and justifiably highlights the concerns of private nursery providers. We in Scottish Labour will support the motion in Alison Harris’s name and also urge support for our amendment, which would add to the motion concerns about staffing to meet the expansion.

So far this year, I have twice asked the Minister for Children and Young People how many staff are in place to deliver the expansion. On both occasions, the minister could not answer. I would be happy to give way to her today if she would care to update the chamber on the exact number of staff in the system today.

There are 34,500 staff working in ELC across Scotland, 25,500 of whom are providing funded placements.

I thank the minister for that clarification. We know that 11,000 more childcare workers are needed by 2020. I appreciate that the minister has updated us on how close the Scottish Government is to the target and I would also appreciate it if she could keep us informed of how that progresses.

Nursery providers, both private and public, need assurance that the right staffing resources will be available to deliver the policy. Private nurseries are telling us that staffing remains a significant problem for them, particularly around the wage competition between private and public nurseries. One nursery owner wrote to me to say:

“We appreciate the importance of paying the living wage; however the current funding between council-run and private nurseries is not on a level playing field.”

We also hear that, after staff complete training provided by a private nursery, they often leave to work in a council-run nursery. The Scottish Government needs to ensure a level playing field.

Does Mary Fee accept that the funding arrangements that the Scottish Government has agreed with local authorities entirely address the issue about the rates that have to be paid to enable private providers to pay the living wage? That is part of the funding deal for the expansion of early learning and childcare; it is an implicit part of the agreement that we have reached.

I thank the cabinet secretary for that very helpful contribution and clarification.

Confidence in the private sector about delivering the policy is plummeting. That is evidenced in the responses to freedom of information requests from the Conservatives. The chief executive of the National Day Nurseries Association has warned:

“Our members are very concerned that the current situation with funded childcare in Scotland means that they won’t even survive to the expansion in 2020.”

In writing to the minister, an area manager of the Kirktonholme Childcare chain warned:

“The partner providers are literally on their knees and I believe this ambitious policy is about to implode”.

The NDNA also reports that only 30 per cent of private nurseries are able to deliver the 1,140 hours of free childcare. We support the extension of childcare to deliver for children and families, but the Scottish Government must own up to the problems that the policy faces and it must get serious about delivering this policy on time.

To repeat what I have already stated, the current childcare system is in urgent need of reform to benefit the mix of private and public providers and, most important of all, families and children.

I move amendment S5M-14521.1, to insert at end:

", and that this action should include publishing data on the size of the current workforce, as well as information on how the Scottish Government expects to meet staffing targets, given that it estimated that up to 11,000 additional early learning and childcare workers will be required by 2020 to deliver the planned expansion."

I call Tavish Scott to open the debate for the Liberal Democrats.

16:14  

Thank you, Presiding Officer. You caught me slightly unawares there, as I was looking towards the Green Party benches for the next speaker, but there we are.

I start with the example of Archie, who went through his pre-school years depending totally on private sector childcare because both his parents work. One of them has the temerity to live on Shetland quite a lot of the time—although I am told that he redeemed himself this summer by taking Archie to Anfield for a pre-season game. My point is that the dependence that we, as parents, placed on the private sector was complete. I want to reflect that in recognising the Government’s ambitions for the delivery and expansion of childcare by saying that those are things that parents absolutely want. However, as members on both the Labour and Tory front benches have rightly said this afternoon, its approach needs to adapt to and recognise the scale of the challenges that exist not just in some but in all parts of Scotland.

One childcare provider who is in the private sector, which is essential to delivery in this area, wrote to me to say:

“There is no doubt that private nurseries are the poor relation when it comes to an equitable distribution of the significant Government funding to support the expansion of Early Years funded hours. Private nurseries are going to be squeezed as cash for capital works to improve”

local authority

“settings and to upskill their existing workforce takes place.”

That reflects remarks that have been made by members of other parties. The childcare provider went on to say:

“The private sector will struggle thereafter to retain our best staff, due to the lure of a better paid council job. The private nurseries in turn face a double whammy of”

local authorities

“insisting that any support they get is dependent on demonstrating they are a Living Wage employer ... whilst the hourly rate they pay to partner providers is below the operating cost threshold of the business.”

Those are serious and significant concerns that need to be ironed out by the Government as it progresses the matter. If they are not, the concern is about the hours that will be offered for nursery places. What we are talking about here is the 9 am to 3 pm slot, which suits some people. However, most working mums and dads might start before 9 o’clock in the morning and will certainly finish after 3 o’clock in the afternoon. That is why the other parts of the service will have to pick up those times, both before the start of what is broadly considered to be the normal working day and very much later into the evening. In my part of the world, there is a range of jobs in which people work way outside those hours—I know more people who start work at 7 in the morning and finish at lunch time, or who work later at the other end of the day, than I do people who work traditional office hours. Seeing that is essential to understanding and therefore to designing a system that takes into account the challenges of the modern working world that we are in—whether someone is a teacher, a fish processor, a worker in the hospitality industry or whatever.

I recognise that this is a huge challenge, and by no means am I diminishing or decrying the Government’s effort to get it right. However, accepting the points that have already been made about tackling the challenge of the landscape that is the modern working world will be essential in its redesign—or, if that is too strong a term, reconsideration—of what is currently not working. I also take Mary Fee’s point in her question about additional staff. Many of the Government’s own figures illustrate the depth of the problems there.

If I might finish with one other point, it is to say that it is for the Government to recognise what it is asking of local government and the entire range of organisations that provide childcare. Just last month, Highland Council said:

“to satisfy the government that we are delivering this programme of changes requires that any planning, monitoring, tracking, data gathering and financial reporting ... is becoming more complex and more detailed.”

I ask the Government, in responding to the debate, to recognise that there must be a happy balance somewhere when it comes to the necessity of auditing the use of public money and dealing with—

Will Mr Scott give way?

I will happily give way, but I would like to finish my point.

I am sorry, cabinet secretary, but Mr Scott will not be able to take an intervention. Perhaps the point could be covered in your closing remarks.

There must be a happy balance somewhere when it comes to the necessity of auditing the use of public money and dealing with the range of reporting that is now being required, often of businesses that have very few people indeed.

Thank you, Mr Scott. I apologise for not giving you notice that you were about to be called. There was no speaker for the Scottish Green Party this afternoon.

We move to the open debate.

16:19  

I welcome the opportunity to contribute to today’s debate on what I believe is potentially one of the most important and far-reaching pieces of legislation currently on the Scottish Government’s books. Thirty hours a week of free childcare should be a major tool in the drive to tackle health inequalities and promote the preventative health agenda. It is also an opportunity to help tackle that stubborn attainment gap before it even starts to open. The goal must be to get all of our children to school age on as level a playing field as possible, irrespective of background or personal circumstances. Furthermore, it is also a huge boost for those who want to get back into work following the birth of their child.

We on the Conservative benches support the objectives of the Scottish Government’s legislation. To achieve those laudable objectives and create the prerequisite number of quality childcare places will require partnership working between local authorities and private nursery providers. I know that the minister has examples of where the attitude and approach from local councils is collaborative and reflects the way in which the Scottish Government has set out its delivery plan. However, the picture across the country of councils’ relationships with and treatment of partnership nursery care is in many cases far from that ideal.

Last week, I met a number of partnership nursery owners from across Scotland who have serious concerns about their treatment and the sustainability of the scheme. I do not have time to raise all their concerns, but here are some of the things that they told me. They reported one council balloting for 20 per cent of the places that should be available for partnership nursery places. Those successful in the ballot get 1,140 hours of free childcare at a rate of £5.31 per hour, and those who are unsuccessful—80 per cent of those who should be eligible—get 600 hours of free childcare at a rate of £3.43 an hour. I am pretty sure that that is not what the policy intended.

Does the member recognise that we are in the pilot stage of the delivery and that, although some of the mechanisms used might not have been ideal, we want to deliver across all areas by 2020? There was never going to be a situation where all nurseries would be able to offer 1,140 hours at this stage in the pilot, so does he recognise that lessons have been learned?

The people Clare Adamson needs to speak to are those in the gallery who brought the issue to my attention. I think that 2020 will be too late and that balloting for places is not the way forward.

We have councils that are supplying childcare for 38 weeks of the year but have the audacity to ask the private providers to deliver holiday cover. Not only is that grossly insulting, it most definitely does not have the child’s wellbeing at the centre of the policy. One council is allocating all Scottish index of multiple deprivation 1 to 4 places to the local authority, with SIMD 5 and 6 going to private nurseries. Where is the parental choice in that? Why are they forcing those SIMD 1 to 4 children out of the partnership nurseries that they are already settled in? That council is taking choice away and is labelling children.

I have listened to stories of local authorities that have openly stated that they do not believe in partnership nursery childcare and have no intention of working with private providers at all. They are going to take all their childcare in-house, rather than use nurseries that have delivered decades of top-quality care and have become an integral part of the community. Every nursery represented at the meeting highlighted the issue of local authorities recruiting directly from the partnership nurseries into local authority nurseries. They are losing so many of their highly trained, qualified staff that the Care Inspectorate is now downgrading them because of an increase in staff turnover.

There are huge discrepancies between what the SNP Government and the minister have asked local authorities to deliver, and what they are delivering. There are local authorities that are consulting and using partnership nurseries as a crucial part of scaling up childcare in Scotland. However, as I have tried to highlight today, a significant number are treating them as anything but partners.

I ask the minister to meet the representatives of partnership nurseries who are in the gallery today and to listen to their concerns directly. The minister and the Government must get this right. Aspiration is not enough without a proper plan and a continued audit of its implementation.

16:24  

There is no doubt that there is cross-party support for the transformation of free childcare to 1,140 hours. No one can argue that giving children the best-quality early years education is a bad thing. The Scottish Government is delivering on its promise with a £1 billion, multiyear funding package. That is an amazing commitment to children and families in Scotland and it heralds a new future for family life.

Of course a project of this size and complexity will not be plain sailing during the planning stages; I do not think that anyone would reasonably expect it to be. As the Government amendment recognises and as I have witnessed in my constituency, there is a disconnect at present between some private care providers and local authorities, so it is good that we are having this debate.

However, I do not believe that there has been “a lack of engagement” from the Scottish Government, as the Conservative motion says. The problem lies in how some local authorities have chosen to implement the roll-out. I have visited as many private and local authority nurseries in my constituency as I can this year, and I have been approached by private providers and childminders about the 1,140 hours roll-out. I have met East Dunbartonshire Council to relay concerns and to gain clarification on how its plans are progressing.

The passion and care of early years workers in all sectors, which I have witnessed during my visits, have been amazing, and I cannot praise them highly enough. On Monday in Rutherglen, the Education and Skills Committee hosted an early years forum that included private early years providers, local authority nursery workers and officers from a cross section of authorities. We heard that local authorities have individual approaches to the roll-out depending on the needs of the area, because one size does not fit all. However, by its nature, that muddies the waters for planning and implementation. We heard from private providers that communication and partnership working are far from perfect. North Lanarkshire Council is one of the worst offenders, but it is not alone. It has not consulted the private sector as an equal partner and has used the capital expenditure money to build new nurseries, contrary to Scottish Government guidelines that state clearly that councils need to maximise provision through their nurseries and expansion by partners to meet the demand of 1,140 hours, and only after they have done that build new nurseries. I was pleased to hear the minister say that she will clarify that point.

I also heard about the incident that Brian Whittle spoke about, involving the Scottish index of multiple deprivation and families being dictated to. If that is correct, it goes against all the principles of parental choice and flexibility that are a great strength of the Government’s commitment to this transformational policy. What I heard was shocking, and I will welcome the minister’s comments when closing about Government scrutiny of local authorities’ implementation of the roll-out and how the money is being spent. Private providers said that, although they are happy to pay the living wage, their funding allocation concerns are leading to an exodus of trained staff to local authorities and that childminders have been sidelined in some areas, despite being a major part of the blended model of childcare that should be offered to parents.

It is impossible to address all the issues in a four-minute speech, but I believe that the Government will work with local authorities to address the problems and will make this hugely important initiative work. We will learn from good practice, such as that in Angus, Moray and Edinburgh. Failure is not an option. We need to show that we are listening and that we are acting without delay on concerns that are raised. The bottom line is that this transformational policy will bring phenomenal benefits and huge opportunities for children and families throughout Scotland. By working together, I am confident that we can and will make it happen.

16:28  

I am not sure whether to declare an interest, as people can take it as read from the food stains on my suit that I picked up a three-year-old this morning to take her to her funded place. I am only too aware of how important quality childcare is. I truly believe that it should be made available to everyone, regardless of where they live or whether they can afford it.

That is why this commitment and this debate are important. We are merely months away from when the Scottish Government’s target is supposed to be met. As Alison Harris pointed out, it is important not just because it is a Government target or commitment but because doing the commitment in the wrong way has the very real possibility of making things worse by removing provision.

Does Daniel Johnson agree that one of the downsides of getting this wrong is that we will take childcare away from nought to three-year-olds?

That is exactly right. We need only look at the reality of the 600-hours policy and what nurseries have to do to make it work to realise why there is a problem. When we talk to nurseries about the 600-hours approach, the first thing that they say is, “Don’t call them free hours; they are funded hours.” That is because nurseries are having to top up that provision and find ways of cross-subsidising it. That is the reality of the £2 deficit per child per hour that the NDNA identified.

As Brian Whittle pointed out, as we increase provision to 1,140 hours, if places are insufficiently funded, wriggle room will be removed and the ability of nurseries to operate at all will be undermined, because we are talking about a much greater proportion of the total hours and the ability to cross-subsidise will be reduced. That is a fundamental point.

We need to be realistic about what parents need. Parents need up to 2,000 hours a year. They need provision from 8 am to 6 pm and they need flexibility, so that they can work. That is why partnership providers are needed. The flexibility is just not there in local authority provision.

In the local authority sector, 68 per cent of provision is for only half days. Fewer than half of our local authorities can provide lunch, and less than 3 per cent of local authorities can provide full-time, year-round—that is, not just in school terms—childcare.

That is not the fault of those providers; it is because provision is based on a model that is about supplementing school hours. What we need is holistic and flexible childcare, which is why we need partnership providers.

The NDNA has found that 46 per cent of nurseries will not be able to provide 1,140 hours, only 7 per cent can do so on current funding rates, and 53 per cent of nurseries that are looking to provide 1,140 hours will need top-ups to supplement the rates. That should sound alarm bells about the insufficient funding. Although the current funding levels might be increased, there is simply not enough funding to cover the deficit of £2 per hour per child.

The Scottish Government has only months to get this right. It has a mere matter of months in which to build the buildings that need to be built, train the people who need to be trained and, fundamentally, get a funding package right, so that the 1,140-hours policy can be achieved and does not end up removing childcare provision and capacity rather than increasing it.

16:32  

The policy of improving early learning and childcare by increasing early years provision from 600 hours to 1,140 hours is both ambitious and challenging. There is a need to increase the number of qualified staff, to increase building capacity and to ensure that local authorities, private nurseries and childminders will deliver the number of places that are required.

As a member of the Education and Skills Committee, like Rona Mackay, I attended Rutherglen town hall this week, where I took part in the focus groups discussing the introduction of 1,140 hours of funded childcare by August 2020. We discussed the issues with local authority representatives, private nursery providers and childminders. The major concern that they all raised was staff retention.

We are in a transition period as we move towards full implementation. Therefore, not all providers have moved to providing 1,140 hours, which is causing problems. As providers move over to the new contract, their hourly rate increases. For example, in Edinburgh, providers on the 600-hour contract receive £3.80 per hour from August this year, but those on the 1,140-hour contract are in receipt of £5.31 per hour. The result is that providers on the new contract are able to offer higher salaries, which makes it difficult for those on the 600-hour contract to retain their staff.

Will the member give way?

I have only four minutes.

I am aware that staffing levels are being addressed and that in 2018-19, the Scottish Further and Higher Education Funding Council increased further the number of childcare training places by delivering 1,500 additional places on higher national certificate courses and more than 400 additional graduate-level places. However, the staff retention problem will remain until enough newly trained staff are in place and all providers are on the 1,140-hour contract.

In relation to building capacity, we heard that many local authorities are examining how they use their existing nursery school estate and whether they can better utilise the buildings so that they can open from 8 am to 6 pm.

In Edinburgh, thanks to a capital grant from the Scottish Government of £40 million, the council has an expansion plan that will refurbish or rebuild nursery provision in many schools including—in my constituency—Dean Park, Canal View and Clovenstone primary schools, which will undergo refurbishment, and Nether Currie and St Mark’s primary schools, which will have new-build nurseries in 2019-20.

Of course, private nurseries in Edinburgh that plan to move over to the new contract can budget for a substantial increase in funding and, with 100 per cent rates relief for day nurseries and the possibility of receiving a capital grant, businesses are able to put together business plans to grow their nursery provision.

Since August 2017, 25 council-run nurseries in Edinburgh have been providing 1,140 hours of early years childcare. During phase 2, from August 2018, 38 local authority nurseries will offer up to 2,520 places. That represents nearly a quarter of the 11,000 three-year-olds and four-year-olds and eligible two-year-olds who currently receive 600 hours of funded childcare and are already on 30 hours a week.

There are issues that we need to address, but we should remember that the primary aim of the policy is to improve outcomes for all children and to close the attainment gap. The secondary aim is to support parents back into work, training or study that will help family budgets in the long term. I am sure that we can all support the policy intention, so we all need to work together to ensure that we deliver it for all of Scotland’s children.

16:37  

We all want our children to have the best start in life, and that could not be more important than when it comes to the quality and choice of childcare. I welcome the private providers to the gallery.

The Scottish Government has expanded the entitlement of hours of childcare over the years, which has been a positive and welcome step to help more parents to return to work. However, we know that the latest expansion attempt has been severely hampered by the Government’s poor planning and lack of preparation for the roll-out.

In February this year, Audit Scotland warned that there were significant risks to the expansion. If we do not address and discuss the issues, as we are doing today, they will continue to rumble on in the background, which will severely damage the viability and sustainability of private childcare providers.

I want to use the short time that I have to concentrate on a couple of issues and problems that private providers are facing. They need to compete, often unfairly, with the state sector. The problems include lack of engagement with local authorities, and not just in my constituency but throughout Scotland; lack of access to capital funding, as we have heard from Alison Harris; funding uncertainty; and increased competition from public nurseries, which should be complementing, not inhibiting, the existing private providers. To deliver the expansion, we need private nurseries to survive and thrive, not to shut their doors because they cannot compete. It is about parents being able to choose the best-quality care setting for their child.

I will give the example of a private provider that was concerned that it would need to make a staff member redundant this week, because the nursery has lost three children. I was told that the children left because they are registered with school nurseries from January—the term after their third birthdays—and if school nurseries have places available, they let children start as close to their third birthday as possible. I will quote from the provider:

“The Council’s answer to this is that if we have space and staffing then we can follow the same rule and let the children start their funded place as close to their 3rd birthday as we can, but the crux is that we won’t be paid by the Council for those places until January, or the April, depending on when their birthday falls. In this situation those children were due to leave in January—it’s not feasible to fund them from the business in the way the school will until January and as they were leaving anyway, to give them free hours doesn’t make sense. But the nursery will have planned for them leaving in January ... they’ve been poached for an early start at school nursery, and it leads to a shortfall in expected funds and so sadly a staff member has lost their job”.

I would like the minister to respond to the point about the lack of flexibility for partnership providers and fairness with regard to choice for parents. The minister constantly reassures us that the private sector is a valued partner, but the evidence suggests that it is not.

Private providers also face a lack of consistency over hourly rates. The letter that I quoted continues:

“the hub school at Chirnside is charging £3.20 per hour for wraparound in their nursery, which is open for 50 weeks of the year. The plan is for there to be a hub school nursery in every town with a high school, so for us we’ll be competing with the local schools from August 2019 for year round children. If they’re charging £3.20 per hour for their wraparound vs our £4.70 per hour (and many private nurseries are more than £5.00 per hour) then it looks like we can’t compete with that level of undercutting.”

On that point, clarity and consistency are needed. Again, if the Scottish Government is to be believed, it values the role of private providers. Perhaps listening to the concerns of the sector and acting on them would be helpful.

Staff retention is proving to be an increasingly large problem for private providers. We have heard examples of that today, so I will not go into specific examples.

The situation simply cannot continue. The Scottish Conservatives want early learning and childcare to be a true partnership between local authorities and the private sector. I urge all members across the chamber to support our motion without question. This is an untenable scenario that must be addressed urgently.

16:41  

What the chamber needs is a little positivity. We should not forget that the SNP Government’s commitment to double the number of hours of free nursery education is the most ambitious expansion of funded early learning and childcare that this country has ever seen, bar none. Doubling provision is a huge investment in terms of social infrastructure as well as bricks and mortar, and as we have heard, by 2021 the annual revenue investment in early years will be almost £1 billion, which is a phenomenal sum. By that time, 11,000 additional workers will have been employed.

I am aware of the concerns that some people in the private and third sectors have expressed—indeed, I have heard them at first hand in my constituency. An excellent childcare provider in my area is Sparklers Nursery, which operates in Gretna and Annan. The facilities are excellent and have won several awards, including for staff development. They offer everything that a local authority can offer, including the flexible wraparound care that we have heard about today.

Providers such as Sparklers have raised with me concerns about the fact that they were not involved in the planning of services in the past, and have expressed their frustration about councils expanding their provision in areas where good quality private sector providers already operate. I sympathise with those concerns, not least because those businesses were founded and built up by female entrepreneurs. That is why I welcome the minister’s assurance today that she has been listening to those providers and that the agreement that was reached in April represents only an early stage of the process, with more money being rolled out, and that the concerns of those providers will be taken on board.

The Government’s track record shows that, like me, it has been listening and responding to concerns. That is evident not least in the 100 per cent rates relief that has been extended to private sector providers, and in the funding follows the child model, which seeks to give parents a choice between a range of high quality providers, including childminders, who are an important aspect of provision in rural areas such as the one that I represent, because many villages do not have a nursery and childminders provide the flexibility that is needed.

Will the member take an intervention?

I am sorry, but I do not have time.

The Government has listened to the concerns of the National Day Nurseries Association and is acting on those concerns, which is important. We have heard that the NDNA asked for a better funding rate and that the Government reached with COSLA an agreement that will, among other things, enable all childcare workers to be paid the Scottish living wage by 2020 at the latest.

I also want to mention the deposit guarantee scheme, which particularly helps the private sector and third sector providers that we are discussing today. Thousands of parents no longer have to pay expensive up-front childcare deposits. In Edinburgh, Glasgow and Dumfries and Galloway, the Scottish Government will cover that cost for eligible families until December 2019. Almost half of parents in the pilot areas with a child under two who take up childcare for the first time can benefit from that scheme.

I also welcome the establishment of the ELC partnership forum, which will promote co-operation between local authorities and partner providers. That has also been welcomed by the NDNA’s chief executive.

Time and again in the chamber the Government is urged to work in partnership with local authorities and to respect democratic local decision-making. In my experience—and from what I have heard in the chamber today—many of the difficulties that have been outlined by private and third sector providers are related to decisions that have been made at council level, not by the Government. People cannot tell the Government that it should respect local democracy and simultaneously demand that it should blunderbuss councils that do not do as they are told.

The Government has suggested constructive ways to encourage everyone to work in partnership for delivery of our ambitious early years commitment. I hope that people will take the Government’s lead on that and will work in partnership and collaborate for the good of Scotland’s children.

Conclude, please.

At the end of the day, that is what it is all about.

We move to closing speeches.

16:46  

This is one of those afternoons on which the idle observer might think that we have managed to construct an argument out of something that we all agree on. Many speakers have made the point that we agree that the move to 1,140 hours is very welcome. However, disagreement lies around people’s confidence in the measures that the Government has taken, and is taking, to deliver the policy, and there is serious and significant evidence to fuel those concerns.

We have very strong evidence of the concerns of those critical partner providers, the private nursery sector. We also have the report that was published by Audit Scotland earlier this year and the experience of the previous policy commitment of 600 funded hours. Although that policy has been in place for many years, many families still find it difficult to access their entitlement.

The fair funding for kids campaign has told us for months and years about the lack of flexibility in the sector. Something like half of all nurseries—private or council run—provide only half days, and 90 per cent of council nurseries offer provision only in term time. In 19 local authority areas, no council nursery opens from 8 until 6 and there are cross-border problems for parents who want to place their children in a different authority from the one in which they live.

All those problems remain under the previous policy, and that is why some providers of childcare lack confidence that the new policy will be introduced properly and on time. The minister was very strong on her commitment that this policy is about closing the attainment gap and helping to address poverty, which is very welcome. However, under the current 600 funded hours policy, fewer than half of the vulnerable two-year-olds who have an entitlement have been able to take it up. It is those very children that the current policy has failed.

Audit Scotland commented on all that in its report and also made it clear that it did not believe that the 1,140-hour policy would be delivered on time. It said that planning started too late and that there was a difference of view on the finances that were available. Although the report came out before the agreement with COSLA, the evidence that Audit Scotland gave to the Education and Skills Committee took account of that. Audit Scotland also said that it could not see how the 11,000 additional workers would be found. It took account of the measures that the Government has introduced—the additional apprenticeship places and so on—but it still could not see how that would work.

The strongest concerns, which have dominated the short debate this afternoon, are those of the partner providers: funding shortfalls and the pressure of paying the national living wage. I heard Mr Swinney make the point—

Will the member take an intervention?

No. I heard Mr Swinney make the point that the agreement means that there should be enough funding for the funded hours to allow providers to pay the living wage, but only 3 per cent of private nursery providers are accredited living wage employers, so we have a long way to go.

Will the member give way?

I am sorry; I do not have time.

The private nursery providers are not convinced that they will be able to do this, which is why two thirds of them are saying that they will not engage with the 1,140 funded hours at all. That is a serious position. The minister says that it has been sorted. She says that

“a spirit of joint endeavour is radiating from the forum.”

However, those partner providers are not feeling bathed in the warmth of that spirit of joint endeavour. They are seriously concerned and we need to hear what more the minister will do to convince them that this expansion will work.

16:50  

The debate has largely focused on governance and in my closing remarks I aim to provide the reassurance that my colleagues seek.

We have the right and robust governance mechanisms in place. We have established a joint delivery board, which Councillor Stephen McCabe and I co-chair. It also has representatives from the Association of Directors of Education in Scotland, from the Society of Local Authority Chief Executives and from the directors of finance. Therefore, the people who are seeking data to assure us that the policy is being delivered appropriately are not the Scottish Government—it is very much a joint endeavour.

The board met earlier today in Greenock, where we discussed the first set of progress data that I have received from the local authorities, and we had an update on the meeting in the partnership forum. The board monitors workforce, uptake, capacity and infrastructure, and I am pleased to report that all are largely on target. We can identify where there are challenges, and we are ensuring that action is taken to quickly address those challenges.

I assure the chamber that we are also monitoring quality. We are determined to ensure that quality is maintained during the expansion. We plan to publish that information regularly, starting with the first data set in the next few weeks, to ensure that there is transparency about how the expansion is progressing.

We heard a report from the partnership forum today and we reaffirmed our commitment to attend if required. We will work tirelessly to ensure that the pockets of excellent practice become standard right across Scotland. Let me reassure members that we have not handpicked quiet wallflowers for the partnership forum; there was really good representation at the meeting from right across Scotland and from different sectors. I heard that there was robust challenge from many of the partner providers there, but it was an overwhelmingly positive meeting. The passion and the commitment that all the parties feel for this expansion was palpable, as was the sense of everyone working together to the same end.

I understand that there are private providers with concerns about their role in the expansion in some areas and I hope that I have provided reassurance in that regard. Our provider-neutral approach makes it clear that we value the role that private providers currently play and the role that they will play and we know that more can be done to improve engagement and involvement in the roll-out of our expansion plans.

I appreciate the minister’s commitment to this programme, but the people from partnership nurseries who are behind me in the public gallery have said to me that they feel that local authorities are setting themselves up in competition with partnership nurseries rather than working collaboratively as equal partners. Can the minister respond to that?

I can assure the member that in local authorities, private providers and childminders together currently provide 24 per cent of the provision and in 2021-22, local authorities expect them to still provide 24 per cent of the provision. I hear what members are saying about what is going on in their communities in relation to particular situations and providers. I want to reassure them that I have listened; I want to reassure them that my door is open and I am happy to meet any member to discuss particular issues or concerns about providers. In particular, I want to hear about the experiences of parents and children.

Although I accept that not everything is perfect in our roll-out programme, not everything is bad either. There has been progress and what we are doing is already making a difference in communities and to families up and down the land.

The minister says that she wants parents to be able to have choices and that the money should follow them. Will she comment on people’s right to have their free hours of childcare outside the area that they live in? I have been contacted by a number of constituents who want childcare where they work and not where they live.

I reassure the member that that is not going to be a problem. In the future there will be absolutely no barrier to an out-of-area placement because, as I have explained many times in the chamber, the only requirement for a parent is that the funded partner meets the national quality standard and has a place available.

The Government remains absolutely committed to this most ambitious expansion of early learning and childcare in the UK, and we have fully funded it. I assure members that we are making good progress. At the meeting today, I was really pleased to hear from the data return from local authorities—it is data that they are collecting anyway, so there is no extra work for them to collect it—that more than 1,000 two-year-olds right across the country are already receiving more than 600 hours of funded entitlement. I am delighted that uptake for eligible two-year-olds is exceeding our forecast at this stage.

Because of our policy decision to ensure that children who need it most benefit from the policy first, the first phase of the expansion was always going to involve largely local authority nurseries, because they are the nurseries that operate in areas of high deprivation.

I ask the minister to conclude.

However, I assure members that we remain committed to the provider-neutral approach.

We are making really good progress with our plans to transform early learning and childcare for current and future generations of Scottish families. I acknowledge that there is more that we can do and I will ensure that we deliver on our aspirations and commitment.

16:56  

I begin my speech by agreeing whole-heartedly with what Iain Gray said. He set out the context of the problem that we face.

I say to the minister that I entirely accept her ambitions, what she is trying to deliver and the efforts that she is making to make that happen. However, this debate is not just about the promises; it is about ensuring that we can put in place the ways in which we deliver the policies that we all aspire to. We must ensure that the two sectors, in the way in which they provide the childcare that we need, complement each other if we are to fulfil those policies.

I also say to the minister that it is so important that we listen carefully to the concerns that the private sector has set out, which were listed by my colleague Brian Whittle. Rona Mackay, in a very good speech, flagged up some of the concerns that she has heard in her constituency, and we heard Alex Neil, Kate Forbes and even Joan McAlpine echo some of the concerns that have been put about by the Conservatives this afternoon. It is important that we empower people in the private sector so that we can deliver on the policy requirements.

As with anything that the Government undertakes, if its policy is to be effective, there has to be a solid basis of evidence in front of us. As Rachael Hamilton set out—Tavish Scott and Mary Fee mentioned this as well—we must not ignore what was said by Audit Scotland and the Accounts Commission, because it was a stark message about what has to happen if we are to fulfil the policy.

I think that it was Daniel Johnson who mentioned the concern that we have not been able to move on significantly from the 600 hours policy in a way that satisfies people that we have the confidence of parents and that the private sector has the ability to engage. This debate is not just about extending the number of hours; it is about flexibility, parental choice and ensuring that people in the private sector can engage with those things. At present, the private sector is telling us that it does not feel that confidence and that it does not have the ability to take on board a lot of the things that it would like to do to ensure that so many of our children will be able to have the additional support.

We cannot just talk about this; we actually have to do something. As I said, the issue is not just about the extra hours and the financial commitment; it is about flexibility and structure in the system. If we do not do something about those issues, we are in danger of not being able to achieve what we want.

There are good examples of local authorities working on a partnership deal, but I say to the minister that the evidence shows that they are few and far between. If we are to ensure that all local authorities have partnership funding in the way that we want, we will have to take drastic action to make that happen. In some cases, the state sector is pushing out the private sector, which is not acceptable if we are to deliver the number of places that are required. I take on board the minister’s determination to do something about that.

Will Liz Smith give way?

I cannot give way on this occasion.

The minister has to clarify the advice that she gives to local authorities because, as Alison Harris rightly said, too many local authorities are not abiding by the policy, which is letting down many people in the private sector.

The debate is exceptionally important. We have no problems with the Scottish Government’s ambition, but we—and, I think, many SNP members—have a problem with exactly how we deliver that. We have to take on board the concerns that we are hearing from many people in the private sector.