Watchdog report on Scotland's 1,140-hour expansion of funded childcare

The Scottish Government and councils have done well to implement the SNP’s flagship childcare expansion policy, a watchdog has said.

But the 1,140-hour expansion for three and four-year-olds and eligible two-year-olds has left private nurseries on the brink of closure and has seen local authorities spend more than £100m over planned capital project budgets.

Audit Scotland’s report released on Thursday warned that making the increased funded hours a statutory duty of councils has left the childcare sector “fragile”.

While the majority of infrastructure projects and recruitment required to implement the 1,140-hour expansion has been successfully completed – Scotland’s councils are concerned a reduction in their funding for early learning and childcare may effect delivery in future.

Last week, the Scottish Childminding Association gave a stark warning about the future of the private childcare sector.

“We have some very serious concerns about the manner in which the expansion was implemented – there have been a series of unintended consequences,” the body’s chief executive Graeme McAllister said.

He said there has been a drop of 34% in the childminding workforce, while almost 2,000 childminding businesses have closed, meaning more than 11,000 places have been lost, and he warned that trend could potentially double by 2026.

Key points from Audit Scotland’s report

Scottish Government and councils did well to put in place 1,140 hours of funded early learning and childcare by August 2021, during the Covid‑19 pandemic
Take-up among three and four-year-olds remains high
Most parents are happy with the flexibility available
More two‑year-olds are receiving funded ELC, but an estimated 86% of eligible toddlers are not registered
Budget pressures and risks around workforce and the sustainability of funded providers risk limiting flexibility and choice for families

Data from Scotland’s council showed that more than 8,000 nursery and childcare staff have taken sick leave because of stress or mental health concerns since 2017/18.

The expansion, which went live in August 2021 after delays, required a substantial capital investment from councils, funded by £496m from Government.

But projections, as of August 2022, place the final cost at £598m to councils – a more than £100m overspend.

Councils reported overspends were caused by the pandemic, rising constructions costs, delays and contractor errors.

Opposition politicians warned that budget pressures and staffing issues had to be addressed if the 1,140-hour commitment was to be sustainable.

Scottish Conservative deputy leader Meghan Gallacher, a new parent herself, said the problems “risk limiting future childcare options for families”.

“This timely report emphasises how fragile Scotland’s early learning and childcare sector is under the SNP,” she said.

Scottish Labour education spokeswoman Pam Duncan-Glancy said the report exposed “just how much work that the SNP government still needs to do to meet their child care targets”.

Children and young people minister Natalie Don welcomed the report and said flexible, accessible and affordable early learning and childcare was critical to giving children the best possible start.

“Despite the significant challenges of the pandemic, this report by Audit Scotland shows what we can achieve when we work closely with our partners to deliver for Scotland’s children and families”, she said.

“It builds on recent independent polling showing 97% of parents with a three to five-year-old have accessed funded ELC places since August 2021 and that, of those, 97% are satisfied with the quality of provision.

“The Scottish Government will consider the findings carefully and work closely with every part of the childcare sector to understand and address the challenges currently facing providers as a result of the cost-of-living crisis and workforce pressures.”