Childcare Sector Working Group minutes: February 2025

Attendees and apologies

• Care And Learning Alliance (CALA)
• Care Inspectorate (CI)
• Convention of Scottish Local Authorities (COSLA)
• Scottish Childminding Association (SCMA)
• Early Years Scotland (EYS)
• National Day Nurseries Association (NDNA) 
• Association of Directors of Education in Scotland (ADES)
• Scottish Social Services Council (SSSC)
• Scottish Out of School Care Network (SOSCN)
• Scottish Government (SG), Chair

Items and actions

1. Welcome, apologies, minutes and actions

The Chair opened the meeting and welcomed the group. 

Minutes from the previous meeting were agreed by the group and have now been published online. 

The Care Inspectorate (CI) was asked to provide an update on the nappy changing guidance.

Action: CI to provide an update to the group on the nappy changing guidance.

2. Updates from the Scottish Government (SG) 

Storm Eowyn impacts

SG officials provided an update on the situation with Storm Eowyn on 21 January, and invited feedback from members on the impacts on PVI services. It was noted that: 

• questions from providers were mostly around insurance and legal status of advice not to travel. SG confirmed the guidance was not legally binding and that it is for organisations to make their own decisions on opening settings
•  ADES member confirmed ELC funding within their council area would not be impacted if settings closed
•  members requested that comms with an agreed position for PVI settings be issued in the event of any future severe adverse weather

Action: Arrange discussion on comms during severe weather occurrences between SG, COSLA and ADES.

Employer National Insurance contributions

SG officials provided an update on employer National Insurance Contributions (ENICs) following the Cabinet Secretary for Finance and Local Government’s appearance at the stage 1 debate on the 2025 to 2026 Scottish Budget Bill on 4 February. As the Cabinet Secretary said, the great unknown is the net impact of the UK Government’s new policy, which we estimate could add more than £530 million in directly employed public sector staff costs. If we include the costs of staff delivering wider public services, such as general practitioners, dentists, ELC and social care staff, the figure would increase to more than £700 million. It is therefore essential that the UK Treasury fully funds the actual costs for Scotland’s public sector but it has indicated that we will instead receive a much lower-value Barnett share of spending in England. We need an urgent decision on this to give employers the clarity they need to plan their budgets for this year. 

Although we do not yet have figures from the Treasury, Ms Robison has confirmed that, as things stand, funding that covers 60 per cent of the reported costs for directly employed staff in public services will be provided for all portfolios. This passes on the indicative UK Government funding in full. Public sector organisations are being asked to make plans to meet the remaining costs from within their budgets.

This indicative funding assumption does not include the costs of delivering commissioned services, which is an issue the Scottish Government and our partners in CoSLA we will continue to raise with the UK Government. We will provide a further update on this as soon as we can. 

SG and CoSLA appreciate the timing pressures that both providers and local authorities are facing in order to undertake their financial planning for 2025 to 2026. It with this in mind that the Scottish Government and CoSLA are looking to issue the sustainable rates guidance and funding allocations relating to the real Living Wage commitment as soon as the necessary finance and governance processes relating to this Budget commitment have concluded. We will endeavour to provide this as quickly as possible. 

In discussion, it was noted that:

• members have serious concerns around the financial impacts of the ENICs changes across the childcare sector, and felt that the estimated impact (£5 million for funded ELC provision) may be low. Members reported that services fear closure or having to hugely increase prices for non-funded childcare. 
• there is an urgent need for clarity about sustainable rates for 2025 to 2026 and the extent to which ENICs pressures will be reflected in ELC funding
• there may be varying levels of awareness about the ENICs changes across the daycare of children sector, with some services not yet fully aware of the changes to costs from April 2025
• COSLA’s view remains that costs for funded services should be met in full between SG and the UK Treasury

Action: SG to update on the sustainable rates guidance and approach to ENICs in 2025-26 as soon as possible. 

School Age Childcare

SG officials provided an update on school age childcare (SACC) developments in light of announcements in the draft budget. This includes the £3 million for the Bright Starts Breakfasts (BSB) commitment. BSB is planned to support delivery of more breakfast provision and earlier drop off times to support parents/carers.

Currently around half of schools in Scotland are providing breakfasts, and the Improvement Service has been working with SG to understand the data and level of provision already available. Work is underway to develop plans for delivery, but this remains subject to Parliamentary approval of the Budget. Proposed timelines are to launch the fund in spring this year, and issue payments ahead of next academic year commencing.

SACC colleagues are also continuing work on the digital project and have awarded NEC software solutions the contract. This is the next step towards delivering a digital childcare project in Scotland, and they are seeking to understand needs and carry out business analysis. This is the first phase of a wider piece of work.

Members asked whether BSB fund applies only to breakfast clubs, or if it might be available to other settings such as childminders. Detail of the fund are in development and still to be scoped, and this ask will be fed back to the BSB lead to provide clarity as plans develop. 

ELC Parental Survey

SG is planning to launch the third iteration of the ELC Parent Survey in the spring, with the previous surveys completed in 2017 and 2022. This will aim to provide information on families’ patterns of use of, and views on, ELC. ScotCen has been appointed to undertake the research. This will be an online survey which SG will ask for stakeholders’ support in distributing. Qualitative research will be included for specific families such as those who have children with additional support needs. The survey will be as light touch and straightforward as possible. SG is aware that some local authorities may be running similar surveys at the same time, due to their statutory duty to consult families every two years, and will seek to align where possible.

ELC National Standard update

The National Standard requires updating due to the publication of the Quality Improvement Framework. Over the next few months SG will be carrying out a review of this for factual accuracy and alignment with the latest versions of key documents. This is not a full scale review, however SG would welcome feedback if members are aware of any minor details that need updated. 

Action: SG to update the group in more detail on the National Standard update at the May meeting. 

Sustainable Rates Guidance 2025 to 2026 

Finance and governance processes for the updated Sustainable Rates Guidance for 2025 to 2026 are underway. Along with confirming how the additional £9.7 million real Living Wage funding that was announced in the Draft Budget will be delivered to providers, the guidance will also take forward some of the ELC Sustainable Rates Review recommendations. SG and COSLA will share with members as soon as possible.

3. Feedback from the sector on current issues 

Members highlighted challenges regarding staff morale across PVI and local authority services. This is resulting in high staff absences and professionals leaving the sector. Meeting the needs of children with Additional Support Needs (ASN) continues to be challenging. Concerns are also being reported around sustainable rates, compounded by ENICs increases. Some members expressed disappointment with the new shared Quality Improvement Framework. They also expressed concerns about a lack of clarity regarding SG core funding in 2025 to 2026. 

Work on the Curriculum Improvement Cycle has been well received and ELC professionals are happy to have the opportunity to contribute. 

4. Additional Support Needs in ELC

Following members’ request for a deep dive discussion on ASN, SG circulated a paper to support the scoping of next steps towards identifying priority actions to address the challenges local authorities and their funded providers are currently experiencing in respect of meeting the needs of children with ASN in ELC settings. 

Members were invited to consider the questions posed within the paper including identifying additional issues not captured in the paper and sharing their views on the proposal to establish a short-life working group to consider the current evidence and identify next steps.

It was agreed that the challenges outlined within the paper are sector wide and have always been present, but increasing due to challenges around the lasting impacts of the pandemic and 1140 expansion. The need for effective staff training around child development was highlighted. The SSSC led review of National Occupational Standards (NOS) and the focus on embedding child development into every NOS should strengthen initial training. The importance of promoting leaders with significant experience in supporting children’s development, and closer working with healthcare workers such as health visitors was emphasised. Members also discussed the sensitivity of labelling children as violent, particularly those under 5 when behaviours are often due to undiagnosed support needs. 

Members agreed the recommendation to form a short life working group.

Action: SG to take forward ASN short life working group including CSWG members. 

5. Workforce update 

Skills for Growth pilot

The Skills for Growth pilot was developed in response to engagement with stakeholders which highlighted challenges in creating time for staff to undertake professional learning, particularly in PVI services. The Skills for Growth programme, delivered by Skills Development Scotland (SDS), offers a tailored, fully funded skills diagnostic service designed to support businesses in identifying development opportunities. SDS will provide insights and recommendations that can help services create efficiencies, enhance staff learning opportunities and improve overall sustainability.

ADES Early Years Network members were invited to nominate PVI providers. All nominations were accepted, with a total of 12 settings selected to participate across six local authorities. SDS is now in contact with settings to begin their engagement in the coming weeks. We expect initial outcomes the first months of the new fiscal year, and are hoping the programme will create case studies and inform policy development. Following this phase SG will advise CSWG on its impacts and consider further expansion of the programme.

Continuous Professional Learning portal

SG are working with SSSC colleagues to enhance functionality of the portal. Guidance reference documents are also available in the portal. The refreshed site will be launched around the end of the fiscal year, and we hope to integrate this with the SSSC Learning Zone in due course.

Real Living Wage implementation

Following the recommendation by Audit Scotland to SG and Local Authorities to urgently put in place a mechanism to monitor payment of the real Living Wage (rLW), SG circulated a proposal developed with COSLA and ADES colleagues.

SG has engaged with some members of the group individually but welcomed the opportunity to take views from this group.

Most recent data from the Financial Sustainability Health Check showed around 80 per cent of settings are paying rLW. It has been identified that practice across LAs in monitoring payment of the rLW is variable.

The paper includes proposals:

• to use the Care Inspectorate Annual Return to ask providers directly if they pay the rLW (next collection will take place in December 2025); and
• to provide a route for escalation for any staff working in partner providers not being paid the rLW, similar to what currently exists in adult social care 

This will be supported by Improvement Service sharing best practice. The next step will be to take these proposals to the Real Living Wage and Fair Work Implementation Group. SG was asked to clarify legal position in respect of partner providers paying the rLW.

Action:

• SG to provide clarity on legal position on payment of rLW. 
• Comments and feedback on the proposals in the paper welcomed to SG Workforce team. 
• Fuller discussion on workforce issues to take place at next meeting.

SSSC Fee Review

SSSC fee consultation has closed and analysis is currently being undertaken. There were over 3000 responses, with the majority from the children and young people sector. Implementation of updated fees is due on 1 April, with a focus on ensuring these remain fair and sustainable.

SSSC workforce wellbeing survey 

SSSC have launched their first Have Your Say Workforce Wellbeing Survey, which closes on 14 February. They are looking to hear from staff on their experience of mental and physical health and general wellbeing. SSSC to provide an update at the next meeting if data is available.

National Occupational Standards review

The group were reminded that the SSSC’s National Occupational Standards Development group and Stakeholder Advisory Group are currently running and to get in touch with SSSC if they would like to be involved in these groups. 

6. Forward look to agenda for next meeting and AOB 

PVG Fee Review

Following Disclosure Scotland’s consultation, a decision has been taken that PVG fees will remain at their existing levels. 

Next meeting 

The next meeting is due to take place on 7 May. This will include a deep dive discussion on workforce issues. Meantime, a short written update on quality will be circulated to members, given the lack of time to cover this at the meeting.