Democracy Spraffa

Item 08 - Increase Sustainable Rate paid to Funded Early Learning and Childcare Providers

West Dunbartonshire Council · 28 May 2025
Back to Educational Services Committee — 28 May 2025 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

Some pages contain no extractable text. They may be blank, graphics or scanned pages. OCR has not been applied.

Page 1

WEST DUNBARTONSHIRE COUNCIL 
Report by Chief Education Officer 
Education Services Committee:  Wednesday 28 May 2025
_______________________________________________________________ 
Subject: Increase Sustainable Rate paid to Funded Early Learning and
Childcare Providers   
1. Purpose 
1.1 This report proposes an increase in the hourly rate paid by West
Dunbartonshire Council to contracted private providers for funded Early
Learning and Childcare (ELC). 
2. Recommendations 
2.1  It is recommended that Committee: 
(a) Refer to the guidance for setting sustainable rates contained in the
‘Funding Follows the Child and the National Standard for Early Learning
and Childcare Providers – Guidance for setting sustainable rates for the
delivery of funded early learning and childcare (ELC) in 2025-26’,
published in February 2025, which recommends a minimal increase of
3.75%
(b) Agree one of the percentage uplift options outlined as an increase in the
hourly rate paid to Early Learning and Childcare private providers,
including childminders, for the provision of funded ELC, with 3.75%
being the minimum.
Age Current
Rate
3.75% 4.00% 4.50% 5.00%
2-3 £6.42 £6.66 £6.68 £6.71 £6.74
3-5 £6.28 £6.52 £6.53 £6.56 £6.59 
(c) Note the external factors influencing the sustainability of the hourly rates
paid to contracted providers of funded ELC in West Dunbartonshire,
including rising costs and to enable payment of the real Living Wage to
those childcare workers delivering the funded entitlement. 
ITEM 8

Page 2

3.  Background 
3.1 Approximately one quarter of children eligible for a funded Early Learning and
Childcare place, access their place in the private sector in West
Dunbartonshire Council. The Council is dependent on these places to fulfil its
statutory duty. Therefore, settings in this sector need to remain financially
viable and the Scottish Government requires Councils to establish and pay a
rate that ensures this sustainability. 
3.2 If a sustainable rate is not paid, there is a risk of services in the private sector
closing which would incur capital and revenue costs for the Council and,
would reduce choice and local provision for parents. The closure of services
who also provide childcare which is paid for by the parents would have a
negative impact on the local economy, with parents not being able to access
work or training. 
3.3 As a result of continuing concerns regarding financial sustainability by funded
providers, the Scottish Government issued the Sustainable Rates Guidance,
published in April 2019. The report highlighted that the rate should support
delivery of a high quality ELC experience and should allow for investment in
the setting in terms of staff, resources and the physical environment. It should
also enable the payment of the real Living Wage for those childcare workers
delivering the funded entitlement. 
3.4 The guidance issued in February 2025, advises that councils should, ‘apply a
minimum 3.75% uplift to 2024-25 rates to reflect the estimated increase in the
average staff cost element of the sustainable rate required to meet the £12.60
per hour (real Living Wage) pay commitment in 2025-26’. The uplift reflects
the estimated increase in the average staff cost element of the sustainable
rate required to meet the real Living Wage uplift from April 2025. This reflects
staffing costs accounting for, on average, 75% of the sustainable rate. It also
noted that, ‘if sustainable rates for 2025-26 are set after April 2025, any
payments that reflect the increased real Living Wage should be backdated to
1 April 2025’.   
4. Current Position 
4.1  The hourly rate paid by West Dunbartonshire Council to our funded private
ELC providers, including childminders, to deliver an hour of funded ELC to
Eligible 2 year olds is currently £6.42 per hour and for all children aged from 3
years old to pre school age it is currently £6.28 per hour. Last session the rate
for children aged 3 and above was increased by 7.6% from £5.84 to £6.28
and the rate for eligible 2 year olds was increased by 10% from £5.84 to
£6.42.

Page 3

4.2  Across the West Partnership, as of January 2025, the hourly rates are as 
undermentioned: 
Local Authority 2 year old hourly rate 3 year old hourly rate
East Dunbartonshire £7.63 £6.34
East Renfrewshire £6.32 £6.32
Glasgow £7.65 £6.46
Inverclyde £6.32 £6.32
North Lanarkshire £6.76 £6.46
Renfrewshire £8.50 £6.45
South Lanarkshire £6.54 £6.53
West Dunbartonshire £6.42 £6.28 
4.3 The current hourly rate that West Dunbartonshire Council pay does not
represent all of the other benefits of the partnership arrangement which we
have with funded providers. These benefits include free access to all
professional learning, involvement in working groups and annual mandatory
training, leaders’ meetings, partner provider meetings, early stages teacher
support, inclusion in the related educational psychology support meetings,
guidance from the central Early Years team, including pre inspection support,
and access to workforce development funding. 
4.4 Improving outcomes for children and reducing the attainment gap is at the
heart of ELC provision. Therefore, as well as meeting the requirements of the
National Standard to pay staff the real Living Wage, settings in the private
sector need to be able to recruit and retain staff, support staff training and
invest in their services. Commitment to an increase would provide
reassurance to providers, protect jobs and enable providers to invest in their
services and to put effective business plans into place. The Scottish
Government requires Councils to establish and pay a rate that ensures this
sustainability. 
5.  People Implications 
5.1 A significant number of families in West Dunbartonshire Council access ELC
at private providers. At the moment, this equates to approximately one
quarter of children accessing ELC across West Dunbartonshire Council. 
Parents and carers rely on funded providers of their choice; to provide flexible
childcare at funded provision to enable them to access work and training. If
providers cease to be sustainable, there would be significant work and
resource required to increase the number of local authority places to ensure
that the Council meets its statutory duty. 
6.  Financial Implications 
6.1 The hourly rate paid has increased over time to achieve the current rate of
£6.42 for all eligible 2 year olds and £6.28 for all other eligible children.

Page 4

6.2 The increase in the hourly rate paid to childcare providers can be increased
by 3.75% covered from existing budgets and the funding from Scottish
Government of £125,000. Any percentage uplift above will cost as
undermentioned: 
2-3 3-5 Total
3.75% £16,000 £110,000 £126,000
4.00% £17,000 £119,000 £136,000
4.50% £19,000 £134,000 £153,000
5.00% £21,000 £149,000 £170,000 
6.3 The hourly increase does not include the £3.00 allocated per day, per child,
for food and the £0.58 paid for each child, per session, as part of the Scottish
Milk and Healthy Snack Scheme. 
6.4    This hourly rate proposal captures an increase in the Scottish Living Wage. 
7.   Risk Analysis 
7.1 The Key Risks: 
If the Council does not increase the hourly rate to a level that enables
providers in the private and voluntary sectors to be sustainable, there is the
risk that: 
• There will be insufficient places in West Dunbartonshire Council to
enable parents to access their children’s funded ELC entitlement which
will incur additional cost for the Council as it will need to expand existing
services and/or open new services; 
• There will be a risk to the policy of Funding Follows the Child which is
part of the National Standard and fulfilling the statutory duty; 
• There may be reputational damage to the Council if services close due
to not being sustainable, leading to loss of local provision, choice and
flexibility for families, loss of employment and community based
services;
• 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; 
• Potential reduction in the quality of service provided if qualified and
experienced staff cannot be recruited. 
8. Equalities Impact Assessment (EIA) 
8.1  An Equalities Impact Assessment has not been undertaken for this report.
The proposal to increase the hourly rates for funded ELC has no negative
impact on people with protected characteristics but has the potential to impact
positively on the ELC workforce, which is predominantly female.

Page 5

9. Consultation 
9.1  Regular consultation with funded providers. 
9.2  Legal Services and the Section 95 Officer have been consulted in relation to
the content of this report. 
10.  Strategic Assessment 
10.1  This report reflects the Council’s aspiration that all West Dunbartonshire
children have the best start in life and are ready to succeed. Families are
supported in accessing education, learning and attainment opportunities and
improved life chances for all children, young people and families. 
Laura Mason
Chief Education Officer 
___________________________________________________________________ 
Person to Contact:  Alison Bowers, Senior Education Officer, Education,
Learning and Attainment 
Email: Alison.bowers@west-dunbarton.gov.uk 
Background Papers: Sustainable Rates Guidance 
Financial Sustainability Health Check 
Funding Follows the Child and the National Standard for
ELC Providers: Interim Guidance 
Ipsos National Cost Collection Report 
Wards Affected:  All

Page 6

No embedded text on this page.