Funded Childcare (Partner Providers)

– in the Scottish Parliament on 24th January 2019.

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Photo of Brian Whittle Brian Whittle Conservative

5. To ask the First Minister what the Scottish Government is doing to ensure that partner providers are part of a sustainable solution for the roll-out of 1,140 hours of funded childcare. (S5F-03006)

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I make it clear that we value highly the role of private providers in delivering high-quality and flexible early learning and childcare to families across Scotland. The funding-follows-the-child model empowers parents to access their child’s 1,140 hours entitlement from any high-quality setting in the public, private or third sector that meets our new provider-neutral national standard.

We have established a partnership forum to ensure that providers’ voices are heard and responded to. In our delivery support plan, which was published in December, we set out a range of actions to help providers to transition to 2020.

The funding deal that we reached with the Convention of Scottish Local Authorities to deliver the expansion secures sustainable and significantly increased funding rates for all providers. That is exactly what providers called for in a recent member survey from the National Day Nurseries Association.

Photo of Brian Whittle Brian Whittle Conservative

I assure the First Minister that Conservative members fully support the principle of increasing support for childcare and recognise the crucial role, which she referred to, that partner providers must play if the policy is to succeed.

I bring to the attention of the First Minister and the Scottish Government the fact that the investment that they have provided for the policy is not in many cases creating collaborative working between councils and partner providers. It has repeatedly been brought to the attention of me and my colleagues that partner providers are being frozen out of the process and valued at a rate that is far lower than that for council-run facilities. The result is that they and after-school care providers are losing key staff to council-run facilities at an alarming rate. In short, the remuneration that they receive for the excellent service that they continue to provide does not allow them to compete with the salaries that are being paid in the public sector. With that in mind, will the First Minister further commit her Government to ensuring that, as part of the 1,140 hours childcare roll-out, partner providers across all councils are treated fairly? If we lose them, this important policy will fail.

The First Minister:

Again, I do not disagree with the substance of the question. I am aware that there are concerns on the part of private providers about the roll-out of the policy and its potential implications for them. That is why we are working through some of the arrangements that I spoke about during my initial answer to make sure that there is proper collaboration between local authorities and providers in the private and third sectors. This policy will be delivered only with the contribution of the different sectors. Maree Todd is leading that work for the Government and she is working hard to ensure that the concerns are understood, recognised and responded to.

The funding agreement with COSLA took a lot of time and negotiation, and involved the Government giving more money than had originally been considered. It includes funding for the payment of sustainable rates to providers from 2020. Hourly rates across the country will increase significantly during the period to 2020. The funding package is underpinned by a shared commitment to paying sustainable rates to providers in the private and third sectors that reflect the cost of delivery. That is an important part of assuring providers in the private sector that they will remain competitive when it comes to attracting staff.

We recognise those concerns and I hope that the member will be assured that a considerable amount of work is being done to recognise those concerns and to respond to them appropriately.

Photo of Mary Fee Mary Fee Labour

Many private providers in nursery education regrettably cannot match the staffing costs of local authorities. If a partner provider pays the living wage, that could increase the cost of childcare over and above the 1,140 free hours, especially for children who are below the age threshold for a funded placement. What specific steps can the Scottish Government take to stop childcare costs rising in private nurseries as a result of providers paying the living wage?

The First Minister:

The funding settlement that we reached with COSLA has a commitment to pay the living wage to staff in any sector who are providing the 1,140 hours. That is an important commitment and it is supported by members from across the chamber.

That commitment will involve an increase in the hourly rates that are paid to private providers. That is inevitably for discussion between individual local authorities and providers in their areas, but the funding settlement envisages that increase in hourly rates in order that private or third sector providers are able to pay the living wage and are being paid at a sustainable level so that they can attract the staff and deliver the quality service that we are asking them to deliver.

I reiterate this point because it is important. It is in everybody’s interests for us to take private providers with us on this journey, because the policy will not be delivered without their valuable contribution. We recognise the anxieties and concerns and we will continue to work with providers to address and respond to them in a systematic and patient way. I hope that members take some assurance from that commitment.