Childcare Sector Working Group minutes: February 2026

Attendees and apologies

• Care Inspectorate (CI)
• Care and Learning Alliance (CALA)
• Scottish Childminding Association (SCMA)
• Early Years Scotland (EYS)
• National Day Nurseries Association (NDNA)
• Association of Directors of Education in Scotland (ADES)
• Scottish Out of School Care Network (SOSCN)

• Scottish Social Services Council (SSSC)

• Convention of Scottish Local Authorities (COSLA)

• Scottish Government (Chair) (SG)

Items and actions

1. Welcome, apologies, minutes and actions

The Chair opened the meeting and welcomed the group. The Chair introduced the new interim Unit Head for Quality, Equity and Workforce. 

Minutes from the previous meeting have now been published online. 

The Chair updated on actions from the previous meeting.

These actions are complete: 

• SG to follow up with colleagues on the discussion about the modules noted in the ELC Improving Quality Group paper. – SG have followed up and information has been circulated with members 

These are still underway:

• Arrange discussion on comms during severe weather occurrences between SG, COSLA and ADES - Officials are progressing a plan to improve reporting of closures and impacts of severe weather and similar emergencies – including exploring a process for alerting all providers where appropriate.
• SG to circulate survey to members for feedback on the CSWG – to be circulated following February meeting.
• Follow up conversation to be held between NDNA and SG in relation to specific concerns – meeting between SG and NDNA being arranged. 
• Follow up conversation to be held between EIS and SG in relation to specific concerns - meeting between SG and EIS being arranged. 

2. Updates from the Scottish Government 

ELC Division Updates 

Publication of Draft Scottish Budget 2026 to 2027

The draft Scottish Budget for 2026 – 2027 has now been published and this will not be finalised until it passes stage 3 in parliament. Given that the draft budget wasn’t published until January, due to a later than usual UKG budget statement, it will require accelerated progress to get the budget bill passed. 

1140 funding

The most significant element of the funding for childcare is no longer within the education and skills portfolio as the funding for the 1140 expansion has had its ringfence removed and is part of the larger local government settlement. The overall local government settlement is around £15.7bn and that covers the funding that goes to the 32 LAs to deliver services across the country – this is a 2% real term increase on last year. The total amount published last year to deliver 1140 was £1,027,185,000 and exact funding for 2026 - 2027 will be confirmed shortly. 

ELC and School Age childcare programme funding 

Table 6.05 on page 66 of the published budget document shows a line for Early Learning and Childcare. This has a total for £101.2m, 46% of this total relates to ELC and the remaining 54% to School Age Childcare. It is important to note that SG haven’t confirmed budgets or spending plans for the coming year yet.

SACC 

On the school age childcare side that includes funding for the bright start breakfasts programme, both a repeat of the £3m that was pledged in 2025 - 2026 and an additional £15m in 2026 - 2027 to achieve roll out of a national offer by August 2027. 

Also for School age childcare side, 40% (21.75m) of the total budget is funding that goes directly to local government to support holiday food options for children who would receive a free school meal during term time. The remainder of the funding supports the delivery of key projects across the SACC programme, including the Extra time programme, the Early adopter communities, Access to Childcare Fund and Digital.

ELC 

On the ELC side, which accounts for 46% of the £101m total figure, the largest amount can be seen on in Table 4.15 on page 46 of the budget publication under a line called Early Learning and Childcare (ELC) Private and Third Sector Pay and for 2026 - 2027 that is sitting at 36.7m, which is an additional £11m or a 43% increase on the previous year’s total. This is additional funding identified and paid directly to local government to support pay in the PVI sector and to support the RLW commitment. 

The remainder of the funding covers all of the activity of the ELC programme, funding that ranges from the costs of supporting the sector, costs like funding the improvement service for the work that they are carrying out on supporting LAs, driving increases in 2s uptake and working on the outcomes framework for funded ELC for example. It also covers all the internal running costs of the ELC programme. 

Discussions are still underway between Scottish Government and COSLA on behalf of local authorities on a number of issues they have raised relating to the local government settlement.

SG appreciate the significant concerns that have been raised by members about the impact of the delayed UK Government Budget on Scottish Government’s ability to provide assurance of funding for 2026 to 2027 in good time.

All colleagues in receipt of CYPEIF & ALEC core funding should now have heard from the Corra Foundation confirming Scottish Government’s intention to fund in 2026 - 2027. Both ELC and SACC Divisions are working through specific projects and letters of comfort are being issued as soon as possible. Teams should be in touch directly but if members have any concerns they should reach out. Grant Offer Letters will follow once the 2026 – 2027 Budget Bill has passed Parliament, which is currently scheduled to be the end of February.

Members queried whether the 1140 hours being 2% above inflation included the rLW. It was noted that the 2% relates to the overall LG settlement.

Members queried the timeline for sustainable rates guidance – it was noted SG are working with COSLA to draft guidance and taking this through COSLA and Scottish Government governance processes. This is expected to take place at the end of February so aiming to publish early March.

Members highlighted the knock-on effect of delays on Local Authorities and providers in receiving the uplifted rate. It was noted that SG and COSLA are conscious of the implications of the delayed budget and they are aiming to get through the process in the next few weeks.

It was also noted that the Childcare Sector Representation and Sustainability Fund was not covered by the 2026 – 2027 budget.

Action – SG to respond to previous communication from sector representative bodies regarding the CSRS Fund.

Sustainable Rates Guidance for 2026 to 2027

Following the publication of the draft Scottish Budget and local government finance settlement for 2026 - 2027, Scottish Government and COSLA are working together to revise guidance for local authorities on setting sustainable rates for 2026 - 2027.

The guidance will take account of the additional funding for real Living Wage confirmed in the draft Budget. We are working through our internal Scottish Government and COSLA processes as quickly as we can, and we will be in touch with the Sustainable Rates Review Implementation Working Group about setting up a further meeting soon. 

Scottish Government updated that the Diffley Partnership are undertaking final quality assurance of the report and supporting data tables from the Funded ELC Costs Survey which would be published by the Scottish Government in the Spring.

Additional Support for Learning Short Life Working Group (SLWG)

Further to the last CSWG ASN discussion in February 2025, when the group endorse a recommendation to form a SLWG, members were updated on progress against the group’s agreed priorities included: Initial training and CPL, LA support for funded provider of ELC, and national guidance and resources. The SLWG has met 4 and is next due to meet in March, when the group will be wound up. The Scottish Governments focus and collaborative work with partners to scope and progressing actions to support the sector to meet the needs of children with ASN has been universally welcomed by stakeholders.

It was noted that the group had discussed a range of issues, including capacity, ratios and resourcing, however the remit of the group did not include work on sustainable rates.

Members also noted that resources being developed by the group would be hosted in different locations and stressed the importance of linked up different source of information. This has been considered by the group and they are being brought together in the SSSC portal, including ASL CPL and guidance resources.

Whilst the group is due to come to an end in March, the SLWG has laid the groundwork for future collaborative work with the sector on ASL, helped to develop a shared understanding of the data and the sector’s needs.

Early Years, Speech, Language and Communication Action Plan

The Early Years Speech, Language and Communication Action Plan was published in December 2025 and sets out a national, preventative approach to strengthening early communication development.

The Plan focuses on improving early identification and support, building workforce confidence, and ensuring families receive help as early as possible.

It brings together commitments across education, health and local government, recognising that improving early SLC requires coordinated action across the whole system. A key aim is to reduce developmental concerns identified at the 27–30 month review by a quarter by 2030, supporting the wider ambition to give every child the best start in life.

The Plan builds on existing national programmes, including 1140 hours ELC, health visiting, Family Nurse Partnership, Bookbug and Play, Talk, Read, and strengthens coordination rather than creating new burdens. Delivery will be supported through ongoing engagement with partners, sharing of effective practice, and a focus on equity to ensure children across Scotland benefit from high quality early communication support.

Workforce Team Updates

A quick reminder of some important deadlines coming up which SG encourage members to participate in:

• Care Inspectorate Annual Returns are due by 17 February
• SSSC Have Your Say survey for all staff is open until 20 February - Have Your Say Workforce Wellbeing Survey
• SSSC Consultation on revised SVQs closes on 25 February: SVQ and Apprenticeship Consultation 2026

1140 evaluation

It was noted that the 2018 - 2025 1140 expansion outcomes evaluation package would be published by the Scottish Government in the Spring, and that it would be helpful to bring the reports to a future meeting of the CSWG for discussion.

School Age Childcare Division Updates

Budget 

It was noted that this was covered in the overall Budget update. The main announcements relating to School Age Childcare were: 

• By August 2027 providing a universal breakfast club offer for primary school children in Scotland. This will give children access to a nutritious breakfast as well as supporting parents to get to work. 
• Continuing to invest over £5.5m in our Extra Time programme in partnership with the Scottish Football Association which currently supports 5,000 children most at risk of living in poverty to access free after school and holiday clubs. 
• In addition, we will invest up to £2.5m in work with the SFA, and key delivery partners to test delivery of a wider after school activities offer for primary school children, improving outcomes for both children and parents.
• Continuing to fund school age childcare services for families most at risk of living in poverty through our Access to Childcare Fund and Early Adopter Community projects, supporting parents to enter and sustain employment.

Feasibility study

Outputs:

• Delivered 5 online sessions with SOSCN members between 8 December 2025 and 21 January 2026, reaching around 120 stakeholders (a range of services, local authorities and interested parties). 
• The Regulation Review: Feasibility Study – Final Options Appraisal was published on 17 December 2025. 

Next Steps:

• A consultation and relevant impact assessments have been drafted.
• A summary note of the SOSCN sessions will be shared with attendees, partners, and included for analysis alongside the consultation. 
• In-person sessions are being arranged in partnership with local authorities, targeting a geographic spread as well as a mix of rural and urban experiences. 

Members noted that it was good to see a rollout of activity provision beyond the SFA and that they would like to see more provision in rural and island communities. It was noted that this is something that is being considered, the SFA are working with Shetland to see how they can support the development of activity provision and they will take forward key learning from this. 

3. Feedback from sector representatives on current issues 

Members noted that the SCMA are dealing with a live issue in terms of childminding and HMRC’s Making Tax Digital. HMRC have announced that they are making an amendment to the ‘wear and tear allowance’. Historically there has been an agreement that the first 10% of a childminder’s earnings could be attributed to wear and tear. This will now need to be submitted to HMRC on a line-by-line basis. It was noted by members that this will have an impact on childminders and an increased administrative burden. SG noted that while this is a reserved matter for the UK Government to decide on, concerns have been raised with Scottish Ministers who will be writing to the UK Government on the issue. 

Members noted a trend of children being moved to school-based nurseries in the term before they start school. There seems to be misinformation circulating that school nurseries make children more school-ready. There is a misunderstanding amongst parents about the quality across PVI and LA providers. It was noted by SG that there has been no shift in the policy. 

Members noted an issue concerning CI guidance on nappy changing. Current guidance specifies that soiled clothing should be sent home with a note on how to launder the clothes. Members noted that the issue is that this guidance specifies clothing should be washed separately and this can cause difficulties for parents in terms of the cost of living. 

Action – CI to provide an update on nappy changing guidance discussed. 

Members noted issues in terms of cross-border placements and the potential issue of a breakdown in reciprocity across LAs who will be considering budgets for next year. It was noted that there is not a statutory duty on LAs however this does not align with the statutory guidance of Funding Follows the Child. Members noted that they would continue to monitor and engage where required on this. 

4. Review of Childcare Sector Working Group Terms of Reference and membership ahead of new Parliamentary term

The pre-election period is due to begin on 26 March ahead of the Scottish election on 7 May. Today’s meeting will therefore be the last meeting of the Childcare Sector Working Group during this parliamentary term and an opportune point to review the Terms of Reference, operation and membership of the group.

Scottish Government highlighted an intention to issue a short questionnaire to all current members seeking feedback on their experience of the group and their input to the refresh ahead of the next Parliamentary term.

5. Forward look to agenda for next meeting and AOB 

This meeting is the last in the current schedule of meetings and the pre-election period will begin on 26 March. The next meeting would be due to be held in May however given the pre-election period, SG proposed to move this to mid-June. Members were content with this approach. 

Members will be aware that Ms Don-Innes is stepping down from Parliament so there will be a new Minister with responsibility for ELC. The team will work with the Minister’s office once they are in post to look at introductory meetings with representative organisations. SG will bear these in mind when scheduling to ensure calendars are not overwhelmed.