There are two key aspects to affordability: (1) the costs faced by parents and carers; and (2) the costs to the public sector of delivering the overall system.
Reducing the Burden of Childcare Costs for Parents
The expansion will almost double the number of free hours of ELC entitlement available to parents and carers, substantially reducing the childcare costs that they face. It is estimated that this will result in an average saving of £2,000 per child compared to the free entitlement currently available (600 hours), and a saving of £3,000 per child when compared to the entitlement available prior to 2007.
A range of support is available to parents to help support them with their child's early years (see Box 6).
Parents may require additional hours from their ELC provider, beyond the funded entitlement. For some parents, particularly those on lower incomes, these costs can provide a barrier to participating in the labour market or in further or higher education.
For example, upfront childcare costs - which can include deposits, administration fees and the payment of the first month's fees in advance - can create a barrier for some parents on low incomes who require hours beyond the entitlement. For some parents they may not have the money to hand to cover these initial costs, particularly if they are just entering the workplace and therefore awaiting their first set of wages. In some circumstances this can prevent them from entering into employment, increasing their hours of employment, or from studying.
We will explore how additional support can be tailored to help reduce the burden of upfront childcare costs for some parents in low income households, including a programme of pilot approaches in 2017-18 across Scotland. The pilots will, in particular, focus on the initial deposit that often has to be paid to secure a childcare place potentially through piloting a deposit guarantee scheme.
Targeted support with childcare costs is available for certain groups, including, for example, students. As part of the Review of Student Support, which will report in Autumn 2017, consideration will be given to the effectiveness of the current student support system for providing support for students with childcare costs.
Box 6: Supporting Families to Give Children the Best Start in Life
Supporting children and families is at the heart of this Government's programme. We know that investing to create the conditions for the best start in life pays dividends: enabling each child to develop fully his or her potential, to learn, to contribute, and enjoy a happy, fulfilled life.
This begins at pre-birth, with appropriate pre-natal care and advice for mothers and continues throughout the child's journey with support including:
- From spring 2017 free vitamins will be offered to all pregnant women.
- In 2017 there will be a full roll-out of the baby box which will offer essential items for a child's first weeks to the families of all newborn babies in Scotland, to promote the fair and equal start we want for every child, regardless of circumstance.
The creation of a new Best Start Grant ( BSG) will bring together the system for Healthy Start food vouchers and the UK Sure Start Maternity Grant ( SSMG) when powers transfer to Scottish Ministers. This is part of our focus on reducing inequalities in early years, and subject to the outcome of the Consultation on the Future of Social Security in Scotland  .
This will simplify and improve the service for parents and carers by streamlining the application process, providing more joined up support. It will also make clearer what families are entitled to from pregnancy through to children starting school, ensuring we minimise the impact of UK Government welfare cuts on children's health and wellbeing.
The BSG will pay £600 on the birth of a first child, £300 for second and subsequent children and will make additional payments of £250 around the time that children start nursery and school, providing greater support for families through early years.
Healthy Start food vouchers will help families access affordable nutritious food. We will promote this scheme for parents and carers to improve the current take up of the grants, meaning that more families receive the support they are entitled to and more children are given the best start in life.
Support is also available through the tax and social security systems. For example, Tax Free Childcare  , which, under current plans, will be fully rolled out by spring 2018; whilst some parents or carers may still receive support through employer-based childcare vouchers.
We want to ensure that support is as coherent, comprehensive and easy for parents to access as possible. This could involve improving the linkages across the range of childcare support, covering existing support and potential new schemes, to ensure that they are accessible and clear to parents.
Question 17: Do parents and carers face any barriers in accessing support with the costs of ELC provision (beyond the funded entitlement)? What more can we do to ensure additional hours are affordable?
Ensuring the Long-term Sustainability of the ELC Sector
It is vital that the overall ELC sector is sustainable over the long-term, has appropriate capacity, and allows for diversity in providers across the public, private and third sector, as well as a wide range of innovative delivery models.
As highlighted earlier, this includes ensuring the sustainability of partner providers within the system.
The expansion to 1140 hours will be delivered to ensure long-term financial sustainability, for example through future-proofed infrastructure that allows for future evolution of delivery models.
Delivery solutions which create greater integration with wider service and asset agendas help to deliver greater long-term value for money from the ELC expansion investment; whilst the improved outcomes for children, particularly those from disadvantaged backgrounds, improves long-term financial sustainability by preventing future budget pressures.
Question 18: How can ELC providers, particularly private and third sector providers, be encouraged to extend capacity?