Most LAs paying unit cost identified in Scottish Govt Financial Review

FFollowing an FOI request to all Scottish Councils, 11 of the 16 who confirmed their new funding rates will be paying £5.31 for delivering 1140 hours for three and four year olds from August 2020.NDNA Scotland logo

The amount of £5.31 identified by the Scottish Government for the Financial Review 2016, was simply the top 10% of partner provider unit costs.

This research was carried out by Ipsos Mori in 2016 on a business model offering 600 hours of funded childcare per year and did not allow for profit and investment in the business. This figure has also not kept up with inflation.

The Scottish Government has responded to NDNA’s request to re run this survey and has made it clear they will not be doing this.

The Government has commissioned Scotland Excel to produce guidance on procurement and setting sustainable rates for childcare.

As councils and providers wait for this guidance there is a lot of uncertainty within the sector about the future, which makes business planning more difficult.

NDNA Scotland Policy Manager Jane Malcolm said: “The Scottish Government said they would not commit to setting a national rate because of the differences between urban and rural areas - but most councils appear to be choosing this figure. Edinburgh is paying £5.31 but so is Highland Council, despite them being very different areas.

“The Scottish Government multi-year funding package has an inflationary uplift built into it to allow the sustainable rate to keep pace with inflation. But some councils including Glasgow are setting rates for three years, despite inflationary costs and wages increasing.”

The question of payment for meals is also causing confusion with some councils expecting the hourly rate to cover this while others are planning to make separate payments. 

FOI details:  Funded Rates for 2019/20 – 2020/21

Funded Rates for 2019/20 and 2020/21

[u-urban r-rural]

Those delivering 600 hours for 2019/20

Those involved in phasing in the delivery of 1140 hours for 2019/20

Proposed ELC hourly rate for settings in 2020/21

 

2s

3-5s

2s

3-5s

2s

3-5s

 

Aberdeen City [u]

NR

NR

NR

NR

NR

NR

 

Aberdeenshire [r]

£4.22

£3.94

£6.00

£5.31

NYA

NYA

 

Angus [r]

NYA

NYA

n/a*

n/a*

£6.51*

£5.05*

 

Argyll & Bute [r]

£6.00

£5.31

£6.00

£5.31

£6.00

£5.31

 

Clackmannanshire [r]

£5.00

£5.00

n/a*

n/a*

£5.45

£5.45

 

Comhairle… [r]

£4.50

£4.50

£5.31

£5.31

£5.31

£5.31

 

Dumfries & Galloway [r]

NYA*

NYA*

NYA*

NYA*

NYA*

NYA*

 

Dundee City [u]

n/a

£4.50

n/a

n/a

NYA

NYA

 

East Ayrshire [r]

£3.58

£3.58

£5.50

£5.50

£5.50

£5.50

 

East Dunbartonshire [r]

£5.31

£5.31

n/a

n/a

NYA

NYA

 

East Lothian [r]

NR

NR

NR

NR

NR

NR

 

East Renfrewshire [r]

£5.60

£3.50

n/a*

n/a*

NYA

NYA

 

Edinburgh [u]

£3.90

£3.90

£5.31

£5.31

£5.31

£5.31

 

Falkirk [u-r]

NYA

NYA

NYA

NYA

NYA

NYA

 

Fife [r]

£4.40

£4.40

£4.40

£4.40

NYA

NYA

 

Glasgow City [u]

£5.40

£5.40

£5.40

£5.40

£5.40

£5.40

 

Highland [r]

£5.00

£4.41

£5.00*

£4.41*

£5.31

£5.31

 

Inverclyde [r]

£5.00

£5.00

£5.31

£5.31

£5.31

£5.31

 

Midlothian [r]

NR

NR

NR

NR

NR

NR

 

Moray [r]

£5.85

£5.00

£5.85

£5.00

£6.00

£5.31

 

North Ayrshire [r]

£4.50

£4.50

£4.50

£4.50

£5.31*

£5.31*

 

North Lanarkshire [r]

£4.50

£3.65

£5.80

£5.55

NYA

NYA

 

Orkney Islands [r]

£5.00

£5.00

n/a

n/a

NYA*

NYA*

 

Perth & Kinross [r]

£5.50

£4.00

n/a*

£4.50

£5.50

£5.05

 

Renfrewshire [r]

£8.00

£5.00

£8.00

£5.00

£8.50

£5.31

 

Scottish Borders [r]

£5.10

£4.75

£5.10

£4.75

£5.65

£5.31

 

Shetland Islands [r]

£4.58*

£4.58*

£4.58*

£4.58*

£5.31

£5.31

 

South Ayrshire [r]

£4.70

£4.25

£5.31

£5.31

NYA

NYA

 

South Lanarkshire [r]

NR

NR

NR

NR

NR

NR

 

Stirling [u-r]

£4.50

£4.50

£5.45

£5.45

NYA*

NYA*

 

West Dunbartonshire [r]

£4.00

£4.00

£5.31

£5.31

£5.31

£5.31

 

West Lothian [r]

NR

NR

NR

NR

NR

NR

 

 (Comhairle nan Eilean Siar - Western Isles)

NR = No Response

NYA – Not Yet Announced

Five councils have not responded to NDNA Scotland’s query and ten have not yet decided on their rates. 

The phasing in rate covers providers involved in delivering a portion of the 1140 hours ahead of 2020 but may not include paying staff the Scottish Living Wage.

Many whose nurseries who are not involved in the phasing in of 1140 hours will lose out on additional funding – for example, East Ayrshire council is paying £3.58 to those delivering 600 hours compared with £5.50 for delivery of 1140 hours, a difference of £1.92. Edinburgh nurseries not phasing in will lose out on £1.41 per hour, North Lanarkshire nurseries £1.90 and Aberdeenshire £1.37.

Jane added: “We need rates that are reasonable and sustainable so business can pay their staff the Living Wage and invest in their business in order to keep the quality high. These rates must also keep pace with inflation.

“We know the Scottish Government want this policy to succeed and continue to work with them to address the concerns of the sector. We will continue to lobby Government for fair rates to cover all areas.

“We survey nurseries in Scotland every year to find out how many think this will cover their costs and if there is a shortfall, how big that shortfall is and its impact on their nursery.”