Funded early learning and childcare - sustainable rates 2025-2026: data collection report

Introduction

1. Funding Follows the Child provides the underpinning policy framework to support the delivery of funded Early Learning and Childcare (ELC). A key aspect of Funding Follows the Child is the payment of sustainable rates to providers in the private, third and childminding sectors for the delivery of funded ELC.

2. In April 2019, guidance was published to support local authorities to set sustainable rates. This guidance was produced based on feedback gathered from across the sector and sets out the principles that should underpin any approach to setting sustainable rates; and options for taking forward the process.

3. The Scottish Government provided an additional £9.7 million to local authorities in 2025-26 to support an increase in the pay of childcare workers in the private and third sector delivering funded ELC so that they can be paid at least the Real Living Wage from April 2025. The commitment was also to be delivered in a fair and sustainable way for childminders delivering funded ELC.

4. This new investment in 2025-26 follows the additional £16 million the Scottish Government provided in 2024-25 to enable childcare workers delivering funded ELC in private and third sector services to be paid at least £12 per hour from April 2024.

5. The Scottish Government and COSLA jointly published the Funded early learning and childcare (ELC) - setting sustainable rates 2025 to 2026: guidance on 20 February 2025, which confirmed that the additional funding will be passed to all funded ELC providers (including childminders) in 2025-26 through a minimum 3.75% increase in sustainable rates.

6. The final sustainable rate(s) for 2025-26 should also reflect other, non-staffing, cost elements and the 2025-26 guidance. This includes providing scope for reinvestment.

7. As set out in the Sustainable Rates Guidance, published in April 2019, the rates paid to providers in the private, third and childminding sectors for the delivery of funded ELC by local authorities should be sustainable and should meet the following criteria:

• the rate will support delivery of a high quality ELC experience for all children;
• it will be a rate that reflects the cost of delivery, including the delivery of national policy objectives;
• the rate will allow for investment in the setting – staff, resources and physical environment; and
• it will enable payment of the real Living Wage for those childcare workers delivering the funded entitlement.

8. The 2019 guidance also highlights that from a local authority perspective the rate must be sustainable for authorities in terms of the budgets available, and that:

• the rate does not have a detrimental effect on the local authority’s ability to continue to pay for the service in the long-term;
• the wider package of ‘in-kind benefits’, available to funded providers as part of their contract with the local authority in addition to the sustainable rate, is considered; and
• the rate does not need to be cross-subsidised by parents and carers through charges for non-funded hours.

9. The Scottish Government and COSLA jointly published new sustainable rates guidance on 16 March to support rates setting from 2026-27 onwards, which confirmed that the additional funding will be passed to all funded ELC providers (including childminders) in 2026-27 through a minimum 5.2% increase in sustainable rates. The Scottish Government is committed to collecting and publishing data on sustainable rates annually and will collect data on the rates set in 2026-27 from Local Authorities in late 2026.

Data Collection

10. The Scottish Government is committed to collecting and publishing data on sustainable rates annually. The previous report on sustainable rates, with information for 2024-25, was published on 31 March 2025.

11. The Scottish Government wrote to local authorities on 27 October 2025 to request information on the hourly rates that they have set for providers for the delivery of funded ELC in 2025-26; as well as the payments to funded providers for delivery of the free meal commitment. Local authorities subsequently reviewed the draft report and analysis for accuracy ahead of publication.

12. The 2025-26 data collection exercise focused solely on rates and meal payments. To minimise the reporting burden on local authorities, we did not request information this year on any additional support or ‘in‑kind’ packages provided to private and third sector providers. The most up‑to‑date information on these elements is available in Annex C of the 2024–25 Sustainable Rates Data Collection Report.

13. This report is inclusive of corrections made by local authorities to 2024-25 data since the 2024-25 Sustainable Rates Data Collection Report was published and affected figures have been updated or calculated in line with corrected data.

14. This document is only intended to set out the information provided by local authorities in response to this request.

Summary of the Returns

15. Annexes A-B set out the following information provided by local authorities:

• Hourly rates paid to providers, for the delivery of the funded ELC entitlement in 2024-25 and 2025-26 to 3 - 5 year olds, and eligible 2 year olds [Annex A].
• Payments to providers for delivery of free meals [Annex B].

16. To allow for consistent comparisons of sustainable rates across local authorities – and in line with the Funding Follows the Child guidance (i.e. meeting the costs of delivering an hour of ELC to one child) – the rates presented in Annex A do not include any top-ups to the sustainable rate for the delivery of the free meal commitment and/or for snacks (these payments are presented separately in Annex B).

Hourly Rates paid by local authorities for the delivery of funded Early Learning and Childcare

17. All 32 local authorities have confirmed rates for 2025-26. Tables A1 and A2 outline the hourly rates paid by local authorities for 2 year olds and 3-5 year olds in 2024-25 and 2025-26, as well as the percentage change between the two years.

18. In Orkney, all non-local authority ELC provision is currently provided by childminders. For consistency, their rates are excluded from the minimum and maximum rates, and the calculation of averages highlighted in this summary. All sustainable rates paid to childminders for the delivery of funded ELC are provided separately in Tables A3 and A4.

19. 29 of the remaining 31 local authorities pay a higher rate for 2 year old children than for children aged 3-5 years old. The other two local authorities pay the same hourly rate for 2 year old children as for children aged 3-5 years old in 2025-26. In comparison, in 2024-25, four local authorities paid the same hourly rate for 2 year old children as for children aged 3-5 years old.

20. Due to the variation in approaches to funding children with Additional Support Needs, enhanced rates for these children are not included.

3-5 year old rates

21. In 2024-25, the hourly rates paid to providers (excluding separate rates for childminders) to deliver funded ELC for 3-5 year olds varied from £6.03to £7.48 per hour, and the average reported rate across local authorities for 3-5 year olds was £6.56per hour.

22. This rate has increased across all local authorities. In 2025-26 the hourly rates paid to providers (excluding rates for childminders) to deliver funded ELC for 3-5 year olds varied from £6.29 to £7.98 per hour, and the average reported rate across local authorities for 3-5 year olds was £6.87 per hour (an increase of 4.7%).

23. Average rates paid to providers for 3-5 year olds receiving funded ELC have increased by around 86.7% between 2017 and 2025, from £3.68 per hour in 2017-18 to £6.87 per hour in 2025-26.

24. In 2024-25 the difference between the lowest rate (£6.03 per hour) and highest rate (£7.48 per hour) paid for 3-5 year olds was £1.45 per hour, or 24%.

25. In 2025-26, the difference between the lowest rate (£6.29 per hour) and the highest rate (£7.98 per hour) paid for 3-5 year olds is £1.69 per hour, or 26.9%. The percentage gap between the lowest and highest rate paid for 3-5 year olds has increased by 2.9 percentage points since 2024-25.

2 year old rates

26. In 2024-25, the hourly rates paid to providers (excluding separate rates for childminders) to deliver funded ELC for eligible 2 year olds varied from £6.32 per hour to £9.08 per hour, and the average rate across local authorities for eligible 2 year olds was £7.26 per hour.

27. As part of the implementation of the Sustainable Rates Review, the joint 2025-26 Sustainable Rates Guidance encouraged local authorities to make progress towards setting a higher rate for two year olds, recognising the different staffing requirements for this age group, ahead of fully embedding this within the rate-setting process from 2026-27.

28. This rate has increased in 2025-26 for all local authorities. In 2025-26 the hourly rates paid to providers (excluding rates for childminders) to deliver funded ELC for 2 year olds varied from £6.56 per hour to £9.49 per hour, and the average reported rate across local authorities for 2 year olds was £7.66 per hour (an increase of 5.4%).

29. In 2024-25, the difference between the lowest rate (£6.32 per hour) and highest rate (£9.08 per hour) paid for eligible 2 year olds was £2.76, or 43.7%.

30. In 2025-26, the difference between the lowest rate (£6.56 per hour) and the highest rate (£9.49 per hour) paid for eligible 2 year olds was £2.93 per hour or, 44.7%. The gap between the lowest and highest rate paid for 2 year olds has increased by 1 percentage points since 2024-25.

Childminding rates

31. This section sets out the hourly rates paid to childminders to deliver funded ELC for 3-5 year olds and eligible 2 year olds.

32. Tables A3 and A4 outline the hourly rates paid to childminding providers. In the majority of local authorities, childminders receive the same rate as private and third sector funded providers. However, in some local authorities, childminders are paid different rates.

33. Paragraphs 35 – 42 provide a summary of the rates paid to childminding providers across all 32 local authorities. Paragraphs 43 – 35 summarise the rates paid to childminders where these rates are different from those paid to private and third sector providers.

34. As part of the implementation of the Sustainable Rates Review, the joint 2025-26 Sustainable Rates Guidance encouraged local authorities to make progress towards bringing rates for childminders in line with other types of provision, ahead of fully embedding this within the rate-setting process from 2026-27.

Childminding rates across all local authorities

Childminding rates for 3-5 year olds

35. In 2024-25, the hourly rates paid to childminders across the 32 local authorities to deliver funded ELC for 3-5 year olds varied from £5.57 per hour to £7.48 per hour, and the average reported rate across local authorities for 3-5 year olds was £6.45 per hour.

36. In 2024-25, the difference between the lowest rate (£5.57 per hour) and highest rate (£7.48 per hour) paid to childminders for 3-5 year olds was £1.91 per hour, or 34.3%.

37. In 2025-26, the hourly rates paid to childminders across the 32 local authorities to deliver funded ELC for 3-5 year olds varied from £6.05 to £7.98 per hour, and the average reported rate across local authorities for 3-5 year olds was £6.76 per hour (an increase of 4.8%).

38. In 2025-26, the difference between the lowest rate (£6.05 per hour) and highest rate (£7.98 per hour) paid to childminders for 3-5 year olds was £1.93 per hour, or 31.9%. he gap between the lowest and highest rate paid for 3-5 year olds has decreased by 2.4 percentage points since 2024-25.

Childminding rates for 2 year olds

39. In 2024-25, the hourly rates paid to childminders across the 32 local authorities to deliver funded ELC for eligible 2 year olds varied from £5.57 to £9.08 per hour, and the average rate across local authorities for eligible 2 year olds was £7.03 per hour.

40. In 2024-25, the difference between the lowest rate (£5.57 per hour) and highest rate (£9.08 per hour) paid to childminders for eligible 2 year olds year olds was £3.51 per hour, or 63%.

41. In 2025-26, the hourly rates paid to childminders across the 32 local authorities to deliver funded ELC for eligible 2 year olds varied from £6.05 to £9.49 per hour, and the average rate across local authorities for eligible 2 year olds was £7.42 per hour (an increase of 5.5%).

42. In 2025-26, the difference between the lowest rate (£6.05 per hour) and the highest rate (£9.49 per hour) was £3.44 per hour, or 56.9%. The gap between the lowest and highest rate paid to childminders to deliver funded ELC for 2 year olds has decreased by 6.1 percentage points since 2024-25.

Overview of approach where local authorities set separate Childminding Rates

43. In 2024-25, seven local authorities paid a different rate to childminders from the rate paid to private and third sector providers. These rates varied from £5.57 to £6.49 per hour for eligible 2 year olds. These rates varied from £5.57 to £6.46 per hour for and 3-5 year olds. The average rate for 3-5 year olds was £6.01 per hour, and the average rate for eligible 2 year olds was £6.13 per hour.

44. In 2025-26, seven local authorities paid a different rate to childminders from the rate paid to private and third sector providers. These rates vary from £6.05 to £6.81 per hour for eligible 2 year olds. These rates vary from £6.05 to £6.71 for 3-5 year olds.

45. The average rate paid to childminders by the seven local authorities who pay a separate rate in 2025-26 for childminders for 3-5 year olds was £6.32 per hour and £6.45 per hour for eligible 2 year olds.

Payments for delivery of the free meal commitment

46. Every child attending a funded ELC session – which is any session that includes funded hours, regardless of whether they are mixed with 'paid for' hours – from August 2021 is provided with a free meal.

47. Local authorities provide settings with the funding to deliver the free meals, unless, in cases where a setting does not have onsite catering facilities, there may be an agreement that the local authority will provide meals to the setting.

48. Funding to deliver this commitment is additional to the sustainable rate and, as set out in the Funding Follows the Child guidance, local authorities must ensure that they are transparent as to the funding being provided to private and third sector providers for the delivery of the free meal commitment.

49. As part of the implementation of the Sustainable Rates Review, the joint 2025-26 Sustainable Rates Guidance encouraged local authorities to make progress towards setting a separate payment rate for the free meal commitment to improve clarity and transparency for funded providers, ahead of fully embedding this within the rate-setting process from 2026-27.

50. The most common approach in 2025-26 was for local authorities to provide settings with a payment for each meal (with 22 local authorities following this approach). 10 local authorities provide payments for meals through a top-up to the hourly sustainable rate. One local authority changed how they made the payment to providers for the free meal commitment between 2024-25 and 2025-26.

51. Across all 32 local authorities, 16 increased the rate paid for meals in 2025-26, while 16 maintained the same rate as 2024-25.

52. In most local authorities childminders received the same level of payment for delivering the free meal commitment as private and third sector funded provider. However, some local authorities reported that they paid a separate rate to childminders. Where this has been reported the details are set out in Annex B, and a short summary is provided below in the relevant section (either payment per meal or payment via a ‘top-up’ to the sustainable rate).

Local authorities choosing to set a separate meal payment

53. In 2025-26, where local authorities provided a payment per meal, the average paid was £2.97 per meal, representing an increase of 3.1% from the 2024-25 figure (£2.88 per meal).

54. 11 of these 22 local authorities increased their rate in 2025-26, while 11 maintained the same rate as 2024-25.

55. Where a payment was made per meal this varies from £2.00 to £4.23 per meal in 2025-26, a difference of £2.23 (or 112%) between the lowest and highest meal payment. These figures are unchanged from 2024-25.

56. One of the local authorities that pays a top‑up meal rate, Falkirk Council, reported that it pays a separate daily meal rate of £2.21 per child, specifically for children receiving funded ELC, and this applies to childminders only.

Local authorities choosing to ‘top-up’ the sustainable rate

57. In 2025-26, where local authorities provided a top-up to the sustainable rate for delivery of the meal commitment, the average paid was £0.45 per hour, which has remained the same to 2024-25.

58. Five of these 10 local authorities increased their rate, whilst five maintained the same rate as 2024-25.

59. Where local authorities provide a top-up to the sustainable rate for delivery of the meal commitment, this top-up varies from £0.32 to £0.57 per hour, a difference of £0.25 per hour, or 78.1%. In comparison, in 2025-26, top up rates for the meal allowance remained the same as 2024-25.

Rate setting timeframes

60. All 29 local authorities reviewed their rates for 2025-26.

61. In 2025-26, two out of 32 authorities agreed and set their rates in advance of their introduction at the start of the financial year (1 April 2025).

62. 30 local authorities reported that they either introduced their 2025-26 rate by April 2025, or backdated their new rate to April 2025. One Local authority reported that they did not backdate to 1 April 2025.