Democracy Spraffa

Early Learning and Childcare Payment of Sustainable Rates to Funded Providers ECSPB

Renfrewshire Council · 2 November 2023
Back to Education and Children's Services Policy Board — 2 November 2023 and its agenda

Text extracted from the council's PDF. Layout and reading order may differ from the original.

Original council PDF · Download plain text

Page 1

To: Education and Children’s Services Policy Board 
On: 2 November 2023 
Report by: Interim Chief Education Officer 
Heading: Early Learning and Childcare – Payment of Sustainable Rates to
Funded Providers 
1. Summary
1.1 Renfrewshire Council has a statutory duty to provide early learning and childcare
(ELC) places to all eligible children. The Council has continued to observe this duty
through the provision of places in local authority, private and voluntary sector
nurseries and with childminders. Renfrewshire Council’s Flexible Framework for
Early Learning and Childcare Places, reference RC-CPU-20-113 (“Council’s
Framework") enables the Council to purchase placements in private and voluntary
sector nurseries and with childminders (these private and voluntary services and
childminders are identified as Approved Funded Providers or AFP). 
1.2 The Scottish Government’s Funding Follows the Child and the National
Standard sets out the principles and practice for funded early years providers
delivering ELC within a local authority area. A key aspect of the National Standard
is for a locally determined sustainable rate for ELC. 
1.3 The purpose of this report is to propose an increase in the hourly rate paid by
Renfrewshire Council to AFP on the Council’s Framework to deliver funded ELC. 
2. Recommendations 
2.1 The Education and Children’s Services Policy Board is asked to: 
(i) approve an increase to the hourly rate paid to Renfrewshire Council’s
Funded Providers for the provision of funded early learning and childcare
from £5.71 to £5.97 from 16 August 2023 for any child aged 3 to 5 years
accepted for funding under the Council’s Framework; and
(ii) approve the continuation of the existing hourly rate of £8.50 paid to approved
Funded Providers for early learning and childcare for any eligible child aged
2 to 3 years and agree to a review of this rate for future years.

Page 2

3. Background 
3.1 Section 1 of the Education (Scotland) Act 1980, as amended by the Standards in
Schools etc. Act 2000 and The Children and Young People (Scotland) Act 2014
(“2014 Act”), directs authorities on their duty to provide pre-school education.
Renfrewshire Council has continued to observe this duty through the provision of
places in local authority, private and voluntary sector nurseries and with
childminders. 
3.2 The Scottish Government’s Funding Follows the Child Policy tasks Councils with
the responsibility of ensuring flexibility and choice, ensuring that there is a range of
options for families in their area.  The National Standard sets out the required
standards for early years providers; with Councils required to be guarantors of
quality in enabling Providers to meet the requirements of the National Standards. 
The aim is to ensure the provision of a quality service to support children to
develop, learn and attain. 
3.3 The National Standard also sets out a requirement for providers to pay those staff
delivering funded ELC the real Living Wage; with the aim of supporting recruitment
and retention of staff, professional learning and investment in their services. 
3.4 Since the Covid pandemic in 2020 to the present time there has been some
flexibility in meeting the National Standards.  The Funding Follows the Child and
National Standard Operating Guidance for 2023 are currently being revised by the
Scottish Government; these revisions have not yet been published. It is anticipated
that core principles within the guidance will not change. 
3.5 The Renfrewshire Council’s Flexible Framework for Early Learning and Childcare
Places, reference RC-CPU-20-113 (“Council’s Framework"), provides a robust
scrutiny and assessment process to ensure quality ELC provision and AFP
commitment to meeting the National Standards in relation to quality of provision,
payment of the real Living Wage, quality staffing and staff retention. 
3.6 Renfrewshire Council’s expansion of ELC to 1140 hours ensured that parents were
offered a range of options for accessing their child’s free ELC entitlement across
each geographical area. In each area parents can choose from a range of
Providers, including Council and AFP; and a range of options such as term time
and 52 weeks per year, full day, and part-time places. 
3.7 In Renfrewshire, approximately 1500 eligible children currently access their funded
ELC placement in an AFP setting. The Council is dependent on AFP to fulfil its
statutory duty to deliver high quality ELC to all eligible children - private, voluntary
sector nurseries and childminders settings in this sector need to remain financially
viable and meet the required standards set to ensure the provision of high-quality
ELC services. 
3.8 In determining the sustainable rate for AFP in Renfrewshire Council area, the
Council complied with the current Scottish Government guidance on rate setting
(published May 2022).  There is an expectation from the Scottish Government that
the hourly rate paid to AFP is reflective of the cost to deliver ELC, takes cognisance
of inflationary increases, payment of the real Living Wage and provides scope for

Page 3

reinvestment; to reflect a measure of profit in a private sector setting or surplus in a
third sector setting. 
3.9 The national guidance also highlights that from a local authority perspective the rate
must be affordable for local authorities in terms of available budget. 
3.10 Updated national guidance on rate setting was expected, with the hope that this
would guide the sustainable rate setting process for this current academic session.
The Scottish Government and COSLA are conducting a joint review of sustainable
rate setting process nationally to include further guidance and, it is now understood
that this will not be published until later in 2023.  This delay in publication will impact
rate setting processes for 2024. 
3.11 On the 7 September 2023 the Scottish Government wrote to Councils to advise on
the Programme for Government 2023 – childcare commitments. In this letter the
Scottish Government advised of their commitment to provide funding to uplift pay to
at least £12 per hour for those in the Private and Voluntary sector delivering funded
ELC, anticipating this commitment will be progressed via the sustainable rate
setting process.  Once there is further clarity on this commitment a further report
may be required to be submitted to the Policy Board. 
3.12 In October 2022 the Education and Children’s Service’s Policy Board approved a
rate of £5.71 for any eligible child aged 3 to 5 years and £8.50 paid for eligible 2-
year-olds.  This rate was paid from the start of the academic session 2022/23. The
rate took cognisance of inflationary increases, payment of the real Living Wage and
reinvestment. At the same time the rate was reflective of the cost to deliver ELC as
determined by the Ipsos MORI national costs collection exercise which was carried
out in early 2022.  This exercise was commissioned by the Scottish Government
and COSLA to support Councils in the rate setting process. 
3.13 In addition to the rates noted in 3.12 above, AFP receive £3 per meal for an eligible
child in line with the 1140 hours of ELC entitlement, this is in addition to the hourly
rate and the separate £0.58 per session per child as part of the Scottish Milk and
Health Snack Scheme. 
3.14 The current (and previous) hourly rate paid to AFP does not represent the other
additional services the Council provides as part of the Council’s Framework.  The
additional benefits include high quality continued professional learning; a
designated link Partnership Support Officer; professional advice and support on
quality improvement; access to an Early Years Graduate (in line with SIMD status)
and to an Early Years Teacher; financial support towards external workforce
training costs to assist in the compliance with SSSC requirements; and other
support services such as Educational Psychology. This in-kind support enables the
Council to discharge its duty as guarantor of quality. 
3.15 If a sustainable rate is not paid, there is a risk of AFP services closing.  If ELC
services were to close in Renfrewshire this could reduce choice and local provision
for parents and impact on the Council’s ability to fulfil its statutory duty in some local
areas.

Page 4

4. Renfrewshire Council - Sustainable Rate 
4.1 In reviewing the rate for session 2023/24, the Council has been seeking to determine
a sustainable rate which supports AFP to deliver ELC in accordance with the National
Standard and Council’s Framework, while at the same time ensuring best value for the
Council. 
4.2 To establish an agreed approach to setting a revised hourly rate Council officers
worked collaboratively with a representative group of AFP to agree a way forward.
The group of 10 AFP representatives and Council officers from Children’s Services
and Finance & Resources agreed the approach to rate setting required to accord with
guidance from the Scottish Government and the Council’s budget. The AFP
representative group confirmed they did not wish a further cost collection exercise and
agreed to a revised rate being set that reflects the real Living Wage, inflationary
pressures, seasonality of provision, and allows for an appropriate margin to provide
support for the reinvestment. 
4.3 The AFP representative group were consulted on the timeline for confirming a revised
sustainable rate for session 2023/24 and agreed to proposals being presented to this
November 2023 policy board, in the hope that the updated national guidance on
sustainable rates would have been published in advance of this policy board cycle. 
As the national guidance is not yet available the revised rate for Renfrewshire has
been developed to accord with the current national guidance (published in 2022) and
in agreement with the AFP representative group 
4.4 The AFP representative group were advised that the revised sustainable rate
represents a percentage uplift in staffing and non-staffing cost such as inflation,
seasonality, and re-investment, with the proposed rates being considered an
affordable rate to the Council.       
4.5 Members of the AFP representative group also request a rate to reflect children with
additional support needs (“ASN”). Renfrewshire Council centrally manages support for
children with ASN to ensure that their specific needs are appropriately considered, this
is supported and addressed via the Getting it Right for Every Child and Staged
Intervention Framework. This centrally managed arrangement ensures the appropriate
interventions are deployed and equity of resource allocation across the Council.
Increasing the rate to funded providers would not have a direct correlation to ensuring
effective support arrangements for identified children with ASN.   
4.6 The proposed hourly rate to AFP for the provision of funded early learning and
childcare places for an eligible child aged 3 to 5 years is £5.97, this represents a 5%
uplift on staffing costs and 3% on non-staffing cost including inflation, seasonality and
re-investment.   
4.7 There is no proposal to increase the rate paid for an eligible children aged 2 to 3 year
olds as Renfrewshire’s rate continues to be one of the highest in Scotland for this age
group. It is proposed that a review of the 2 year old rate is undertaken to consider
future rates, which reflect the cost to deliver ELC for this age group and remains
affordable to the Council. 
4.8 It is proposed that the rate increase for an eligible child aged 3 to 5 years is
backdated, to the date the eligible child was approved for funding during this
academic year or where the eligible child continued the placement from academic
term 3 in 2022 from 16 August 2023 uprated.

Page 5

4.9 AFP will continue to receive £3 per meal for any eligible child in accordance with the
1140 hours of ELC entitlement and in addition to the hourly rate.  In addition, £0.58
will also be paid for each child, per session as part of the Scottish Milk and Health
Snack Scheme. 
4.10 The other additional in-kind services the Council provides to AFP, as outlined in
paragraph 3.14, will continue to be provided, this is also in addition to the hourly rate
paid to AFP. 
4.11 In considering this revised rate, the Council officers remain mindful of the financial
pressures facing the Council and in ensuring it remains affordable within the current
financial year, and for future financial years. The proposed increase in the hourly rate
for 3 to 5 year olds represents a significant cost pressure to the Council, estimated to
be in the region of £416,000 per year.   
Implications of this report 
1. Financial
The overall cost of the proposed increase to the hourly rate payable to AFP for ELC is
expected to be in the region of £416,000 per year, approximately £260,000 of cost
falling within the current financial year to 31 March 2024. This will require to be met
within the Council’s existing budget available for ELC. 
2. HR and Organisational Development 
None 
3. Community/Council Planning 
Our Renfrewshire is thriving -  Ensuring the best start in life for
children and young people. 
Our Renfrewshire is well -  Early intervention will lead to
healthier outcomes for children and
young people. 
Our Renfrewshire is safe -  Local services will benefit children,
young people and members of the
community.     
Building strong, safe and
resilient communities 
-  The quality of community life is
enhanced by supporting parents,
children and young people. 
Tackling inequality, ensuring
opportunities for all 
-  Effective governance arrangements
ensure that the organisations
receiving funding comply with
legislative requirements.

Page 6

Creating a sustainable
Renfrewshire for all to enjoy 
Support to families and flexible
childcare placements will support
parents into and sustain
employment, training or enter
education. 
4. Legal 
Services from AFP will continue to be procured in accordance with the Council’s
Framework and the Council’s Standing Orders Relating to Contracts. 
5. Property/Assets  
None 
6. Information Technology 
None 
7. Equality and Human Rights 
No negative impacts on equality groups or potential for infringement of individuals’
human rights have been identified arising from the recommendations contained in the
report because the service is being extended. If required, the actual impact of the
recommendations and the mitigating actions will be reviewed and monitored, and the
results of the assessment will be published on the Council’s website. 
8. Health and Safety 
None 
9. Procurement
Services from AFP will continue to be procured in accordance with the Council’s
Framework and the Council’s Standing Orders Relating to Contracts. The process for
the proposed variation to the rate will be dealt with in accordance with the Flexible
Framework for Early Learning and Childcare Places and formal letter issued by the
Corporate Procurement Unit to each of the appointed Providers for their agreement. 
10. Risk
If the Council does not increase the hourly rate to a level that enables AFP to be
sustainable, there is the risk that: 
i.   There will be a reduction in the level of choice and local provision for parents and
possibly impact on the Council’s ability to fulfil its statutory duty and compliance
with the Funding Follows the Child Policy and National Standard of ensuring
sufficient places, which could result in additional cost for the Council as it will
need to expand existing Council ELC services and/or open new Council operated
ELC services. 
ii. There may be reputational damage to the Council if ELC services close due to not
being sustainable, leading to disruption to children and families lives, loss of local
provision, choice and flexibility for families, loss of employment and community-
based services. 
iii. Providers in the private and voluntary sector may not be able to recruit and retain
staff or meet the National Standard if they are not able to pay the real Living Wage. 
iv. Potential reduction in the quality of service provided if qualified and experienced
staff cannot be recruited.

Page 7

11. Privacy Impact
None
12. COSLA Policy Position
COSLA is working with the Scottish Government to jointly review the sustainable
rate setting process to agree further national guidance to support the rate setting
processes.
13. Climate Risk
None
List of Background Papers
- Funding Follows the Child and the National Standard for ELC Providers - Updated
Interim Guidance on Setting Sustainable Rates Annex A of the Interim Guidance
provides updated guidance on setting sustainable rates for August 2022, Scottish
Government, May 2022. Link - https://www.gov.scot/publications/funding-follows-child-
national-standard-early-learning-childcare-providers-interim-guidance-update-
requirements-early-learning-childcare-settings-local-authorities-august-
2022/documents/
- Early Learning and Childcare – Payment of Sustainable Rates to Funded Providers,
Education and Children Policy Board, October 2022. Link -  ..\..\..\Archive\Children's
Services\Pdfs\2022\Final PDFs 27 October\Early Learning and Childcare Payment of
Sustainable Rates to Funded Providers ECSPBSQ.pdf
- Programme for Government 2023 – Childcare commitments; letter from the Scottish
Government, 07.09.2023.
Link –
The foregoing background papers will be retained within children’s services for inspection
by the public for the prescribed period of four years from the date of the meeting.
The contact officer within the service is Kathleen McDonagh, Education Manager,
07799034553 - kathleen.mcdonagh@renfrewshire.gov.uk
KMcD
25 October 2023
Author: Kathleen McDonagh, Education Manager, Telephone Number 07799034553
kathleen.mcdonagh@renfrewshire.gov.uk