Mark McDonald MSP

Scotland’s Childcare Minister answers NDNA members’ questions

You gave us your questions for Scotland’s Minister for Childcare and Early Years, Mark McDonald MSP, about the childcare and early learning sector and its future. Here are his answers.

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What is your vision for early learning and childcare in Scotland, five years from now?

This is an extremely exciting time for early learning and childcare as we take forward the most significant expansion ever seen in Scotland – almost doubling free provision to 1140 hours by 2020. Five years from now families will not only benefit from an increase in free entitlement, but from access to high quality childcare which is more flexible and accessible to meet their needs. 

This provision will continue to help children develop the skills and confidence they need to flourish throughout their schooling and beyond, making a vital contribution to closing the attainment and inequality gaps in Scotland. And it’s not just the children who will benefit. Through the development of more innovative and flexible models of delivery, ELC will remove a barrier to parents and carers accessing meaningful opportunities for employment, training and study. 

Finally, as well as helping more parents and carers into work the expansion will provide a range of wider economic benefits that support our ambitions for inclusive growth. The expansion will provide new employment opportunities throughout the country, allowing newly qualified workers to enter the sector and offer exciting opportunities for the current workforce to progress their careers.

How can the Scottish Government support private nurseries looking to expand to support the 1140 funded hours for their families?

Private nurseries are already playing a role in many areas in Scotland, helping to deliver the current 600 hours of entitlement.  Their role as partner providers will continue in supporting the expansion to 1140 hours. In order to deliver greater choice we will need effective and sustainable partnerships between public sector providers and partner providers in the private and third sectors.

This is why as part of the consultation on the expansion of Early Learning and Childcare in Scotland, which closed on 9th January, we were keen to capture views on a number of key issues related to partner providers. This included questions on how we can ensure fair and sustainable funding for all providers offering the entitlement and how we can encourage partner providers, in both the private and third sector to extend capacity.  

The responses received will be incredibly helpful in planning for the future expansion and we will publish our response to these in the Spring.

The focus is currently on 1140 hours for three and four-year-olds and eligible two-year-olds. The youngest children are where there are the greatest opportunities for the earliest intervention, and for parents we know costs are particularly high and there is less financial support. What is the strategy for all other two-year-olds and under-twos?

We have prioritised around 25% of 2 year olds who will benefit most from free early learning and childcare. This includes children who are looked after, under a kinship care of guardianship order; or, whose parents are on out of work benefits or low income, as defined by free school lunch criteria.

However, our aim is to make high quality, flexible early learning and childcare accessible and affordable for all children and families. There is also a wide range of support for children and families from before birth that complements and integrates with the funded entitlement to early learning and childcare. For example: from Summer 2017, a Baby Box will be given to families of all newborns in Scotland. It will include essential items for a child’s first weeks to promote the equal start we want for every child, regardless of their circumstances. 

Using newly devolved social security powers, we will increase the financial benefits available to low income families. The Best Start Grant will replace the current Sure Start Maternity Grant and will provide increased financial support to eligible families at key points throughout the early years of a child’s life. This will see support for qualifying families increase from £500 payable only for the first child under the current system, to £600. It will restore birth payments for second and subsequent children of £300 and it will introduce two new payments of £250 at key transitions points in the early years.

We know that upfront childcare costs – which can include deposits, administration fees and the payment of the first month’s fees in advance – can create a barrier for some parents on low incomes. We will explore how the burden of these costs can be reduced for some low income households, including through a programme of pilot approaches in 2017-18 across Scotland. The pilots will, in particular, focus on the initial deposit that often has to be paid to secure a childcare place potentially through piloting a deposit guarantee scheme.

Support is also available through the tax and social security systems, for example through the Working Tax Credit element, or the Tax-Free Childcare scheme that will be introduced during 2017 and which can be used before or along-side the funded entitlement.  

How does the Scottish Government plan on addressing the additional workforce development needs for the expansion?

A high quality, diverse and well trained workforce is key to delivering the expansion. We are currently working with delivery partners and stakeholders to develop a Skills Investment Plan (SIP) for the early learning and childcare sector. The SIP will set out an action plan on how we will address issues such as raising the profile of a career in ELC and promoting routes in to the sector. 

The Scottish Government will invest in marketing in 2017/18 to increase awareness of routes in to Early Learning and Childcare (ELC) and to attract new recruits in to the sector.  We are currently undertaking research with target audiences to explore how to attract people to a career in the ELC sector. 

We are working with the Scottish Funding Council to ensure that colleges and universities provide the additional training courses required to fulfill the needs of the expanded workforce. In addition we are working with training providers in the private sector to ensure training provision is in place before the recruitment drive begins. 

Quality will be at the very heart of ELC provision.  We know that the skills and qualifications of staff have a vital role to play there, and that those young children who face the greatest disadvantages benefit most from high quality provision.  That is why we have committed to ensuring that all nurseries in the most deprived areas will benefit from an additional teacher or graduate with early learning expertise from 2018. We recently set out more details as to how this commitment would be delivered.

We welcome the Scottish Government’s aim to increase the funded hours available to parents to 1140 but the practical and financial aspects are concerning. How can the government fund this and ensure money reaches providers at the front line?

We have committed to fully funding the expansion to 1140 hours of funded early learning and childcare entitlement.  The draft budget for 2017/18 allocated over £60 million in new investment. This includes £31 million of revenue which will be used to build capacity in the sector; and £30 million of capital funding to support investment in new or expanded or enhanced Early Learning and Childcare settings.  We are engaging with local authorities on how to deploy this funding, to ensure that it is targeted to the most appropriate areas.

We are also working with the Scottish Futures Trust and local authorities to explore how this funding can be best used to meet the infrastructure requirement of the expansion.  This is likely to incorporate a mixture of new builds as well as extensions and conversions of existing estate.

How will the funding rate for 600 hours funded early learning and childcare and the move to 1140 hours be decided for partner providers? And will this be equal to local authority funding rates for their own settings to enable equity? Please could Scottish Government in future move to put a requirement on local authorities to disclose how much money they allocate to each nursery child in local authority provision? We would like to see the government insist that private and third sector nurseries are paid at the same rate as local authority provision. 

Partner providers play an important role in delivering the current 600 hours of funded Early Learning and Children entitlement, and will continue to have a role in the expansion in ELC entitlement to 1140 hours by 2020.  

As highlighted in the response to question 2 the consultation on the expansion of ELC in Scotland  asked for responses on a number of questions related to the role of partner provider, including how to ensure that the rates that all providers receives are fair and sustainable. 

As part of the consultation we also sought views on the overall funding model for delivering our ambitious vision for the transformational expansion of ELC entitlement.  This will require a funding model that supports an ELC sector that is varied, flexible, sustainable, and focused on delivering a high quality experience for our children.

The consultation set out four broad alternative funding models. Some of these models, such as a Funding Follows the Child approach or the introduction of Early Learning and Childcare Accounts, would provide parents with more choice in their selection of ELC provider.   

We are currently analysing and considering the responses to the consultation and we will set out our response in the Spring.

Should the funding follow the child so that there is real parental choice? 

Funding follows the child is one of four broad alternative funding models that we set out in our consultation on the expansion of Early Learning and Childcare in Scotland.  We are currently considering the wide range of responses that we received to the consultation  before making decisions on future policy on early learning and childcare, including on funding models. We will set out our response in the Spring.

Will the Scottish Government consider exempting private nurseries from business rates to enable a fair and level playing field in line with local authority settings? 

We have proposed a highly competitive business rates package as part of the 2017-18 budget.  Currently over a third of all nurseries benefit from rates relief under the Small Business Bonus Scheme. The scheme will be extended from 2017-18, so that over 100,000 properties in Scotland are lifted out of rates altogether.

We want to pay our dedicated staff the Scottish Living Wage but this is out of reach on current funding levels and without fees becoming unaffordable to parents. How can the government enable this?

The Scottish Government is committed to promoting Fair Work practices across all sectors, and our aspiration is that all workers should be paid at least the Living Wage.
I am concerned by the findings highlighted in the Financial Review of Early Learning and Childcare published on 27th September 2016, which revealed that 80% of practitioners in partner provider settings in the private or third sector were earning below the Living Wage.  

It is vital that partner providers continue to deliver Early Learning and Childcare that is of the highest quality. We know that this depends on having well qualified and motivated staff. We want to work with the sector to ensure that well qualified people are encouraged to join and remain in the delivery of ELC in the private and third sectors.  We recently ran a consultation which asked participants about a range of issues including how payment of the Living Wage and wider Fair Work practices could be encouraged across the ELC sector. We will set out our response to the consultation this Spring.

An edited version of this question and answer session appears in the March edition of NDNA’s members’ magazine, Nursery News.