Funded early learning and childcare in private, third sector and childminding settings: delivery costs

Appendix C: Day Care of Children Guidance

Early Learning and Childcare Cost Collection Survey - Guidance

This document supports providers completing the ELC Cost Collection survey. This survey is being carried out by Diffley Partnership, an independent research company, on behalf of Scottish Government and COSLA. Each question is explained with:

• Why it’s being collected – context for informing sustainable funding rate setting.
• What we are collecting – the data point required.
• How/where to find it – practical help for locating the information.

Section 1: Provider Information

Question

Which of the following do you operate? (Childminder / Day care of children)

Why it’s being collected

To compare costs across different service types.

What we are collecting

The type of childcare service you operate.

How/where to find it

This is on your Care Inspectorate certificate or online registration listing.

Question

What is the name of the service that you operate?

Why it’s being collected

To uniquely identify each provider and match with regulatory data (confidentially). Also to ensure no provider appears twice in the dataset.

What we are collecting

Your service name, as used in formal registration.

How/where to find it

As shown on your Care Inspectorate certificate.

Question

Please provide the Care Inspectorate Registration number(s) of your setting?

Why it’s being collected

To uniquely identify each provider and match with regulatory data (confidentially). Also to ensure no provider appears twice in the dataset.

What we are collecting

Your official Care Inspectorate registration number(s).

How/where to find it

On your registration certificate or Care Inspectorate website.

Question

Which of the following best describes your setting? (Private / Third Sector)

Why it’s being collected

To capture information regarding variations in the costs of delivery across different types of providers.

What we are collecting

The governance or ownership type of your organisation.

How/where to find it

This is usually part of your legal status or constitution. Please select ‘Third sector’ if your service is registered as ‘voluntary or not for profit’ with the Care Inspectorate.

Question

Would you describe your setting as a specialist outdoor service and where children spend the majority of time outdoors?

Why it’s being collected

Different types of settings may have different cost structures (e.g. facilities, staffing).

What we are collecting

Outdoor play is an integral, everyday part of early learning and childcare in Scotland. In many settings children will have access to both indoor and outdoor play and learning opportunities throughout the time they attend. However, there are also predominately outdoor-based services. The Care Inspectorate define an outdoor-based service as one that describes itself as a specialist outdoor service and where children spend the majority of time outdoors.

Please only answer yes to this question if your service meets this definition of an outdoor service.

How/where to find it

Based on your daily delivery model.

This may also be reflected in the conditions of registration section of your Care Inspectorate registration.

Question

What is the postcode of your setting?

Why it’s being collected

Allows geographic analysis of costs to inform local authority rate decisions.

It also allows for comparisons between rural, remote, island, and urban services.

What we are collecting

The full postcode of your childcare setting.

How/where to find it

Refer to your official address or registration details.

Section 2: Capacity and Operations

Question

Please provide the following information

a) The number of weeks of the year your service is open?

b) The number of hours per week that your service is open?

Why it’s being collected

Shows operational scale and enables calculation of hourly cost estimates.

What we are collecting

Number of weeks per year and hours per week your setting is open.

How/where to find it

Use your timetable or calendar.

Question

What is the maximum number of places for children that your service is registered to provide?

Why it’s being collected

To help capture any variations in costs of delivery across services of different sizes/capacity.

What we are collecting

The total number of children you're registered to care for.

How/where to find it

Listed on your Care Inspectorate certificate under conditions of registration.

Question

Please provide an estimate of the percentage of children who attend your service who have additional support needs (note - please cover all cases where additional support is required, and your response should not be limited to just cases where there is a formal diagnosis)

Why it’s being collected

ELC provision must be delivered in a way that ensures equality of access for, and accounts for the varying needs of, all children. This will mean that some children will require more support, which could be through increased staff time, access to specialist staff support, or through access to specific equipment.

Responses to this question will help to inform our understanding of how supporting children with a disability or additional support needs impacts on overall costs of delivering funded ELC; and how this may vary across different types of providers.

What we are collecting

A child has additional support needs if, for any reason, they need extra or different help to benefit fully from their ELC experience.

How/where to find it

Information may be included on your registers or management systems. If information is not easily accessible then please provide an estimate.

Question

Has the number of funded ELC hours you have been commissioned to provide increased, decreased or stayed the same over the last year?

Why it’s being collected

To understand the contribution that delivery of funded ELC makes to providers, and how this can vary across different types of providers.

What we are collecting

Whether, in the current year, you have faced an increase, decrease, or no change in the funded hours that you are delivering.

How/where to find it

Use attendance logs, management systems, or registers.

Question

Which of these best describes your premises?

Why it’s being collected

Different property arrangements can create different costs .

What we are collecting

Your tenure status (renting, owning, etc.).

How/where to find it

Lease, mortgage, or funding agreements.

Section 3: Sessions and Fees

Question

Please enter the typical number of hours provided for each of the following type of sessions

a) Hours per half day session

b) Hours per full day session

Why it’s being collected

To understand how care is structured and compare delivery models.

What we are collecting

Length in hours of half-day and full-day sessions.

How/where to find it

Check your programme schedule or offer to parents.

Question

Standard fee structure

Why it’s being collected

To understand fee levels.

What we are collecting

Fees charged for sessions and wraparound hours by age group. The question asks for a split by under 3s and over 3s. If you have a different age group pricing structure then you can provide any additional information in the next question.

How/where to find it

Use your pricing list.

Question

Is there any further information you would like to provide on your fee structure?

Why it’s being collected

In order to enhance our understanding of fees.

What we are collecting

Any additional information you wish to provide.

How/where to find it

Reflect on your fee structure.

Section 4: Income and Expenditure

Question

Preferred reporting period:

• April 2025
• Financial Year

Why it’s being collected

To understand which time period data is being reported for.

What we are collecting

Your choice of April 2025 or yearly data reporting.

How/where to find it

Choose based on how you maintain financial records or what makes providing subsequent information easiest for you.

Question

What financial year do you use?

• April-March
• January-December

Other [please specify]

Why it’s being collected

To understand which time period data is being reported for.

What we are collecting

Financial year for the data being collected.

How/where to find it

-

Question

For each of the following age groups please provide either: (1) the total number of hours; or (2) the number of half-day and full-day sessions you delivered on average per week during the time period for which you are providing financial information?

Why it’s being collected

To understand the total amount of childcare that you are contracted to deliver by age group.

This supports the calculation of estimated cost per hour.

What we are collecting

Volume of childcare provision at your setting.

We understand that providers will have their own management systems, which will capture this information differently.

We also understand that there will be times when children are unable to attend due to illness or holidays. You do not need to adjust for this as the survey just requires information on the childcare that you are contracted to deliver.

Please choose the option that is easiest for you to complete. If you are able to provide the total number of hours by age group then you do not need to provide any information on the number of half-day and full-day sessions (and vice versa).

How/where to find it

Use management systems, invoicing systems or registers.

Question

Please provide the following information?

• Total annual/monthly income
• Total annual/monthly expenditure

Why it’s being collected

Foundational for calculating cost per hour.

What we are collecting

Total expenditure and income for the reporting period.

How/where to find it

Use bookkeeping, accounts, or financial statements.

Question

Can you please break your expenditure down by the following (£)?

• Staff Salaries
• National Insurance Contributions
• Taxes other than NI contributions
• Pension Contributions (including personal pension contributions)
• Mortgage/rent
• Other running costs (excluding mortgage/rent)

Why it’s being collected

Breaks total costs into specific categories to identify major cost elements.

This will enable understanding across different types of providers of the share of costs accounted for by these elements.

This extra level of detail, in particular on staffing costs, will enable better understanding of the potential impacts on the costs of delivery for providers of any policy changes. For example, the recent changes to employer National Insurance Contributions by the UK Government which took effect from April 2025.

What we are collecting

Amounts spent on staff salaries, National Insurance, pensions, property, and other running costs.

How/where to find it

Use your accounting software or breakdowns in financial reports.

Question

What is the average level (percentage) of net surplus/profit/return on investment that your setting needs to return to remain sustainable?

8. 0-5%

9. 6-10%

10. 11-15%

11. 16-20%

12. 21-25%

13. 26-30%

14. 30%+

Why it’s being collected

The sustainable rate should be set at a level that will allow for investment in your setting – whether this is in staff, resources and/or physical environment (please see the sustainable rates guidance for more information).

In order to inform future rate setting we require estimates of average levels of reinvestment/surplus across different childcare providers.

We will be able to produce an estimate of reinvestment/surplus, using the expenditure and income data you provide, for the period of time covered in your return. However, we appreciate that reinvestment/surplus levels can fluctuate between years, dependent on decisions taken by individual services. Therefore, this question asks you to provide the average level (percentage) of net surplus/profit/return on investment that your setting needs to return to remain sustainable.

What we are collecting

The average level (percentage) of net surplus/profit/return on investment that your setting needs to remain sustainable.

We understand that this can fluctuate on an annual basis, so we are looking for the average rate that you may look to achieve over a number of years.

How/where to find it

Reflect on your financial planning or business model.

Question

Would you be willing to provide a more detailed breakdown of your income. Note, this is optional and will be used to better understand the income and expenditure of settings providing funded ELC. This information is optional.

Why it’s being collected

To understand whether you would be interested in providing more detailed income information.

What we are collecting

Whether you would like to provide more detailed income information.

How/where to find it

Discretionary based on your preference.

Question

Thinking about this income, what percentage of your total income came from the following? If a particular income source does not apply please enter ‘0’ in the box.

• Funded ELC Payments: _______________(%)
• Private Fees from Parents: _______________(%)
• Other Government Funding: _______________(%)
• Non-Government Grants: _______________(%)
• Donations and Fundraising: _______________(%)
• Other (please specify): _______________(%)

Why it’s being collected

The responses will inform our understanding of sources of income across different types of providers. In particular, it is important to understand the contribution that income received for delivering funded ELC hours makes to providers overall income.

What we are collecting

Income from funded hours, parent fees, donations, and other sources.

Not all of the potential income sources will be relevant for all types of providers. You only need to provide information for the sources relevant to your setting.

How/where to find it

Use accounting records or income breakdowns from your financial system.

Section 5: Cost of Delivering ELC

Question

What is the average estimated cost to your organisation per hour of delivery regardless of whether funded or not?

Why it’s being collected

The cost of delivering ELC to 2 year olds is expected to be higher than for 3-5 year olds, reflecting the differences in staff ratio requirements (with 1 adult to 5 children for 2 year olds to under 3s, and 1 adult to 8 children for 3-5 year olds) and space requirements.

Reflecting this, the majority of local authorities pay a higher sustainable rate for delivery of funded ELC to 2 year olds, than they do for 3-5 year olds.

However, as previous cost collection exercises have not requested separate data for 2 year old provision, robust evidence on the extent of variations in the cost of delivery is not currently available. There is also currently greater variation in the rates being paid to funded providers for 2 year old children across local authorities relative to the variation in rates paid to 3-5 year olds.

What we are collecting

Your estimated average cost to deliver an hour of ELC for each group.

How/where to find it

Divide total cost by total hours delivered for each group.

We understand that many, non-staffing, costs are for the whole setting and they cannot be apportioned to one age group. However, where possible, when providing your estimates it would be helpful if you were able to reflect differences in your average staffing costs requirements for delivering to 2 year olds relative to 3-5 year olds.

Question

What accounts for any differences in costs across 2 year olds and 3-5 year olds?

Why it’s being collected

Captures the reasons for differing costs, e.g. higher ratios for 2 year old children relative to children aged 3-5 years old.

What we are collecting

Any additional information that you wish to provide regarding cost differences in delivering childcare to children aged 2 years olds relative to 3-5 year olds.

How/where to find it

Reflect on staff ratios, space, and material needs by age.

Section 6: Meals

Question

Do you provide meals in your setting?

Why it’s being collected

To understand whether meal provision is part of your delivery model.

What we are collecting

Whether meals are provided as part of your service.

How/where to find it

Reflect on your daily routine of delivery.

Question

How are meals provided by your setting?

Why it’s being collected

To understand how meals are delivered in your setting. This will also help to determine if differences in how the meal is delivered can impact on the cost of meal provision in settings.

What we are collecting

Sources and preparation method for meals.

How/where to find it

Review your contracts, in-house kitchen setup or council support.

Question

What is the estimated full cost of providing the free meal commitment per meal for each child (£)?

Why it’s being collected

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 – is to be provided with a free meal.

Your response to this question will help to ensure that we have robust and reliable information on the full costs to providers of delivering this commitment.

To fully quantify meal-related costs borne by the setting. This will help to inform future payments to funded providers for the delivery of the free meal commitment.

What we are collecting

Actual cost per meal delivered under the free meal commitment.

You should provide an estimate of the total cost of providing a free meal to each child. This should reflect all costs involved in delivery of the meal and should not be limited to just the costs of purchasing the food.

Where meals are delivered to your setting, either by an external caterer or your local authority, you should also consider any costs related to serving the meal within your setting.

How/where to find it

Calculate cost of ingredients, preparation, staff time, utilities.

Section 7: Staff Costs

Question

What is the average percentage contribution that you make towards a pension scheme for employees?

Why it’s being collected

To quantify the financial impact of pension contributions and ensure sustainable funding rates can account for typical employer contributions across the sector.

What we are collecting

The average percentage you contribute to pension schemes for your eligible employees.

How/where to find it

Look at pension scheme documentation or payroll records to calculate the average across contributing employees.

Question

Do you currently claim the Employment Allowance for reducing employer National Insurance Contribution costs?

Why it’s being collected

To understand how many childcare providers are currently claiming the Employment Allowance.

Eligible employers can claim the Employment Allowance, which can reduce your Employer National Insurance Contribution costs.

The UK Government has published additional guidance on the Employment Allowance for childcare providers. This includes clarifications on eligibility and how the allowance applies to early years providers. For any further inquiries regarding the guidance, please contact HMRC directly.

What we are collecting

Whether you claim the Employment Allowance to reduce your National Insurance Contribution liabilities.

How/where to find it

Ask your payroll administrator or accountant. This will be visible in HMRC submissions if claimed.

Question

Do you currently pay at least the Real Living Wage to staff in your service?

• Yes – all staff
• Yes – only staff delivering funded Early Learning and Childcare
• No

Why it’s being collected

Sustainable rates should be set at a level that enables staff delivering funded ELC in private and third sector services to be paid at least the real Living Wage.

In line with the requirements for Living Wage accreditation, and as set out in Section 2 of the Funding Follows the Child Operating Guidance, apprentices do not have to receive the real Living Wage. If apprentices in your setting are paid below the real Living Wage, but all other staff, or all other staff delivering funded ELC, are paid at least the real Living Wage then please select one of the ‘Yes’ options for this question.

What we are collecting

Whether your service pays the Real Living Wage to all, some, or no staff.

How/where to find it

Compare your pay rates with the current Real Living Wage rate (available on the Living Wage Scotland website) and check payroll records.

Question

Do volunteers currently carry out any roles to support the running of your setting (e.g. administrative tasks or giving up time to be on your committee)?

Why it’s being collected

Volunteers can play key roles in supporting the running of some childcare services. For example, parents/carers who volunteer to take committee roles in some voluntary services.

What we are collecting

Whether unpaid individuals regularly contribute to your operations (e.g., admin, governance, or in-kind labour).

How/where to find it

Consider committee members, parent helpers, or other regular volunteers involved in running the setting.

Question

Would you be willing to provide the hourly pay of staff in your setting across a range of roles? This information is optional.

Why it’s being collected

To establish whether you would be happy to provide hourly pay for different levels of staff in your setting.

What we are collecting

Whether you would like to provide more detailed staff cost information.

How/where to find it

Discretionary based on your preference.

Question

Average gross hourly pay (before tax, national insurance and other deductions) by role.

Why it’s being collected

To understand pay differentials within settings, and across different types of providers, which can help with informing analysis of any future policy changes.

What we are collecting

Average gross hourly rate for key roles.

How/where to find it

Check payslips, payroll software or wage summaries.

Question

Please use the box to set out average gross hourly pay for any other staff you employ in your setting. This could include specialist staff who provide dedicated support for children with profound and multiple learning disabilities; and/or sectorial, maintenance, catering, or domestic staff.

Why it’s being collected

To allow you to provide additional supporting information, if you wish, regarding gross hourly pay for different staff roles in your setting.

To understand pay differentials within settings, and across different types of providers, which can help with informing analysis of any future policy changes.

What we are collecting

Average gross hourly rate for any additional staff roles in your setting not covered by the roles in the previous question.

How/where to find it

Check payslips, payroll software or wage summaries.

Section 8: Anticipated Future Costs

Question

Please set out your current expectations with regards to cost pressures for your setting over the coming year. For example, you may wish to highlight specific costs that you anticipate will rise by substantial amounts or above inflation?

Why it’s being collected

To identify your current expectations on costs and any outlier expenses that could affect future costs.

What we are collecting

Your anticipation of future cost pressures.

How/where to find it

Look at upcoming projects or maintenance plans.

Section 9: Additional Comments

Question

Comments on delivering funded ELC sustainably

Why it’s being collected

Provides qualitative insights to supplement financial data.

Please use this question to provide any further additional information that you wish to provide to support your previous answers.

What we are collecting

Your perspective or suggestions on funded ELC delivery.

Any further information to support your previous answers.

How/where to find it

Based on your operational experience.