Just half of nurseries in Scotland plan to offer 1140 free early learning and childcare hours when the Government’s policy comes in, National Day Nurseries Association reveals in its annual nursery survey report.

Fewer than 50% of private and third sector nurseries say they will offer extended ‘free’ hours – meaning many families may not be able to access funded places.

But NDNA believes the Government can still make 1140 hours a success if it listens to nurseries and acts now to put more money into the scheme. First Minister Nicola Sturgeon announced on Saturday a £50m investment by 2020 to ensure all private nursery staff are paid the Scottish Living Wage. To make a real difference to wages and the nursery sector recruitment crisis, this money must reach the nursery frontline.

Full roll out of 1140 hours – worth around £4,500 towards childcare costs for a working family with a three or four-year-old child – is set to happen in 2020.

Worries revealed in NDNA’s Annual Nursery Survey for Scotland are that the scheme will falter if hourly rates offered to private and third sector nurseries by local authorities for the ‘free’ provision are not enough to cover costs. 

Inadequate funding could mean nurseries opting out of 1140 hours or those who try to deliver it accruing large losses and pushing up fees to balance their books.

Purnima Tanuku OBE, Chief Executive of NDNA, said: “We are calling on the Scottish Government to be innovative and lead the way with their ambitious plans to overhaul the early years sector.

“The Early Learning and Childcare Policy Blueprint included some great ideas which could transform the landscape for families with pre-school children, including an online Early Learning and Childcare Account. This would enable parents to pay their chosen provider directly, supporting parental choice and reducing administration.

“With full roll-out not due until 2020, there is still time for the Government to get this right for providers and families. Getting enough people into the sector to create more childcare places is vital and better pay is a key factor here. We welcome Ms Sturgeon’s announcement about additional funding, but the whole policy needs to be scrutinised and thoroughly costed to ensure enough money does reach nurseries to pay staff the Scottish Living Wage."

Current funding rates for 600 hours per year for three and four-year-olds mean yearly average losses of £1,020 per child. Doubling this offer to working parents could lead to much bigger losses for nurseries.

Purnima continued: “Over half of respondents said their setting expected to break even or make a loss this year. Offering 1140 hours will exacerbate this.

“Three quarters of nurseries plan to increase their fees to parents in the next 12 months. So parents are ultimately paying for this policy. Free childcare should be free for families and providers. 

“We want the Scottish Government to take note of this research and our recommendations which will make a massive difference to families and enable many more parents to work or study.”

The survey also showed that parents are still not getting their choice of provider, with waiting lists at one in five nurseries. This results in some children being moved from one setting to another to receive their current 600 hours entitlement. 

Purnima said: “Restricting funded places means that some parents are forced to miss out on this financial support if they don’t wish to move their settled child.  This is bad news for families who are juggling work and home life along with their finances.”

NDNA’s Annual Nursery Survey 2017 found that:

Only half of nurseries who responded said they planned to offer 1140 hours 
85% of nurseries said local authority funding for “free” hours does not cover their costs – many more than last year’s results
Costs are rising and funding is too low to keep pace – nurseries can’t offer more “free” early learning and childcare and continue to remain sustainable
Over half expect to break even or make a loss
Business rates are soaring for many
Nursery payrolls are increasing by 7% 
As a result, 74% of nurseries are increasing fees to parents 
Staff are leaving nurseries to better-paid jobs within the public sector threatening almost half of these businesses
Only one in five plan to expand their nurseries – so where will the additional capacity come from to satisfy high demand?
One in five nurseries have waiting lists – but local authorities restrict/cap funded places at one in four nurseries

The survey took place in January and February, eliciting responses from 221 nurseries, 23% of the total number of private and third sector nurseries in Scotland.

Purnima continued: “Our recommendations and solutions include carrying out the suggestion announced by Nicola Sturgeon in October for an online Early Learning and Childcare Account. 

“As we expect the Government’s response today to the ELC Blueprint Policy, NDNA believes this is the perfect opportunity to get this right and put children at the heart of their policy-making. A lot of progress has already been made in Scotland, but adequate funding must reach the frontline nurseries to make these forward-thinking proposals a reality.”

Read the full report here