Review calls for improved approach to rate setting for funded childcare

The Scottish Government and Cosla have jointly published a review of how private nurseries, childminders and other providers are paid to deliver funded early learning and childcare (ELC).

The review drew on evidence from funded ELC providers in the private sector, third and childminding sector and from local government.

In the review, the Government and Cosla recommends updating the current policy to provide a better approach to rate setting.

They also said clearer expectations should be set around engagement and communications for local authorities and funded providers.

Finally, they suggested exploring the central collection of more robust and reliable cost data, and collecting evidence on how local authorities support providers to meet the needs of children with additional support needs.

Children minister Natalie Don said: “The Scottish Government has been clear in its commitment to supporting a sustainable and diverse childcare sector.

“We have already seen a significant increase in the rates paid to private and third sector providers since the introduction of 1,140 hours for all three and four-year-olds, with the average rate for three to five-year-olds increasing by 57.6% between 2017-18 and 2022-23.

“I recognise that this has been a challenging period for the childcare sector, and this review is clear there is more to do to ensure that rates are set sustainably for all funded providers.

“I welcome the actions recommended within the review to further strengthen the rate-setting process.

“We will work with the sector and our partners in local government to take forward these actions over the remainder of this Parliament.

“Alongside this process, Cosla and the Scottish Government are continuing to work together to consider wider actions to further strengthen and improve sustainable rate-setting.”

A Cosla spokesperson said: “Local authorities in Scotland highly value their partnerships with funded ELC providers in the private, voluntary, independent and childminding sectors, recognising the key role they play in delivering high quality early learning and childcare and supporting our children and their families.

“Councils are committed to providing effective support for funded providers locally, including through payment of sustainable rates.

“Good progress has been made to date, with average rates paid for three to five-year-olds having increased by 57.6% since 2017-18.

“Local government will continue to work with Scottish Government and our partners across the sector to take forward the actions outlined in today’s joint sustainable rates review publication, to further strengthen rate-setting moving forward.”