Key concern for 1140 hours is sustainable funding

The Scottish Government consultation on the expansion of early learning and childcare to 1140 hours reports the main concern is a sustainable funding rate.Scottish Government logo

The analysis presented by Rocket Science UK Ltd is a fair representation of what NDNA members are telling NDNA Scotland. Common themes come through in the analysis, which align with findings from the NDNA Annual Survey 2018: funding rates, workforce retention and access to capital funding. 

The key concern from respondents to the consultation was sustainable funding. This was acknowledged with the report stating:

“The still to be determined funding rate is the ultimate deciding factor whether the National Standard ensures high quality, accessibility, flexibility and affordability.”

The call for a standardised rate across the sector was supported by local authorities as well as private and third sector providers. Some respondents suggested there should be the same funding rate for different provider types as it was felt that this would lead to provider neutrality. Many were in agreement that there should be a transparent process of how local authorities arrive at the hourly rate. 

What was clear from the report was that many of the issues and concerns raised by NDNA in the last year are also being felt by the wider sector. These issues were raised in the parliamentary opposition debate last week (31 October 2018) with concern being shared from cross party MSPs.  

Jane Malcolm, NDNA Scotland’s Policy Manager said: “NDNA urges the Scottish Government to take heed of the messages that are being reiterated in this report to ensure not only the success of the expansion policy but also the sustainability of a sector which is in danger of collapsing. 

“The warning signs were clearly set out in the NDNA Annual Nursery Survey from both 2017 and 2018. These were mirrored in the Audit Scotland Report in 2017 which stated there were ‘significant risks’ to the expansion of funded childcare.”

The report highlights the following issues, amongst others:

  • Funding rate should be standardised
  • Higher cost structure of private and third sector providers should be considered
  • Sustainable funding rate will be deciding factor in success
  • Access to capital funding for partner providers would be helpful in preparing for the expansion
  • Unambiguous, realistic funding paid in advance and covering all relevant costs
  • Funding rate needs to be high enough to pay Living Wage, if not payment of Living Wage could threaten business sustainability
  • Biggest workforce risk to private and third sector providers is the loss of qualified and experienced staff to local authority services
  • Partner provider at a disadvantage to local authorities in relation to infrastructure, cost and workforce – funding rate must take account of this
  • Clear, consistent guidance on implementing the standard for all provider types ahead of expansion
  • Parents must be supported in their understanding of offer


The report analyses the responses to all eight questions asked in the consultation

NDNA Scotland responded to the consultation following a Network Chairs event in June 2018 bringing together all member voices into one formal response. There were also three NDNA Networks which responded and out of 49 private nursery responses, 71%  were NDNA members.

NDNA Scotland Annual Survey 2018 

Members rated the top three challenges for nurseries this year as increasing staff wages, recruiting and retention of staff, achieving profit/surplus.

79% of nurseries say funding for three and four-year-olds doesn’t cover their costs, with the shortfall increased to £1.98 per hour or £1,188 per year

Likelihood of getting involved with 1140 hrs scheme – 30% said it was likely/v likely compared with 51% in 2017; 23% not sure; 46% are  unlikely/v unlikely to be involved compared with 24% last year

81% said a better funding rate would enable them to offer 1140 hours, 53% being able to make mandatory charges for “extras” such as food, day trips etc, 44% being allowed to set session times

Half of nurseries are increasing their fees and by more than last year (5.8% compared to 4.2%)

Fewer nurseries predict a profit or surplus (38% compared with 46% in 2017) but more predict losses – 16% compared to 12% last year

More nurseries are losing staff to the public sector – average of 3 per year for better pay and conditions