Expansion of funded early learning and childcare to 1140 hours: 2018-2025 national outcomes evaluation

2. Background and context

2.1 Planning for the ELC expansion

The Scottish Government (2014) set out the commitment to increase funded ELC from 600 to 1140 hours per year in late 2014. Local authorities have a statutory duty to ensure a funded ELC place for all eligible children in their area. This can be delivered through their own local authority run services, or through commissioned ELC providers in the private and third sectors, including childminders. The mix of provider types delivering funded ELC is different across local authorities, reflecting local markets and demand.

It was recognised that existing local ELC provision would have to be transformed to deliver the expansion. All 32 authorities submitted their first expansion plans in autumn 2017, in line with ELC Expansion Planning Guidance (2017a). The Scottish Government provided over £60 million funding to begin phasing in investment in the workforce and infrastructure from 2017-18 onwards to ensure that the required capacity was in place by 2020. While the statutory entitlement to 1140 hours came into force from August 2021, expanded provision was phased in over four years. The approach to phasing of expanded hours was intended to consider the Scottish Index of Multiple Deprivation (SIMD) to ensure that those who stood to benefit the most from the expansion benefitted first. The SIMD is a measure of the relative deprivation of an area across a number of domains.

In February 2018, Audit Scotland published an Audit of ELC, exploring planning for the 1140 expansion. It noted that, given the amount of work required at national and local level, the Scottish Government should have started detailed planning earlier to help councils progress their local plans. The report highlighted a number of risks, including increasing the infrastructure and workforce to the levels required. Audit Scotland's follow-up audit of ELC in March 2020 reported that the Scottish Government and local authorities were “making steady progress to deliver the expansion”. However, it highlighted that risks remained in relation to “getting enough people and buildings in place to deliver”. This was particularly because around half of the infrastructure work was planned for completion in the final few months before August 2020.

2.2 Governance arrangements for the ELC expansion

Several groups were set up to plan the expansion after the announcement in 2014. These included strategic groups and programme boards. Key members included Scottish Government, COSLA, Association of Directors of Education networks, inspectorate and quality improvement agencies, representative bodies and other sector stakeholders. Most key groups began from late 2016.

The Early Learning and Childcare Joint Delivery Board was established in 2018 to provide overall governance of the programme, and to manage and monitor progress to ensure that the ELC expansion was delivered on time and within budget. The Board was jointly chaired by the Minister for Children and Young People and the COSLA Spokesperson for Children and Young People. The Joint Delivery Board sat at the top of a developed structure that drew together several working groups and project management bodies focussed on specific elements of the expansion roll out. At the outset, the Board undertook work to agree outcomes for the expansion. A Delivery Assurance team was set up, which worked closely with all local authorities to understand their delivery plans and progress. Summaries of data gathered by the Improvement Service and SFT were presented to the Board and used to monitor whether delivery was on track. Clear routes for escalation of local issues were set out.

In their follow-up audit, Audit Scotland (2020) found that the Scottish Government, COSLA, local authorities and stakeholders were continuing to work well together at a national level and that there was effective national oversight of the expansion.

With the delivery of 1140 hours, the ELC expansion moved on to a different phase of governance focussed on realising the benefits of the expansion for children and families. At its final meeting in March 2022 the Joint Delivery Board supported proposals for a new light touch approach to governance arrangements. As part of that approach and in line with the recommendations of the 2023 Audit Scotland report, the Scottish Government has worked with the Improvement Service and other key partners to develop the ELC Insights Dashboard. It is jointly owned by the Scottish Government and local government, and brings together key data to support local authorities in the planning and delivery of funded ELC.

Other important aspects of policy and delivery of funded ELC have been updated regularly, including a review of Sustainable Rates in 2023, refreshed early years national practice guidance in 2020, and Updated Funding Follows the Child and National Standard Operating Guidance in 2025.

2.3 Funding for the ELC expansion

Prior to the 1140 expansion, local authorities received funding each year through the Local Government General Revenue Grant to fund ELC. In April 2018, a multi-year funding revenue and capital package for the expansion of ELC was agreed by Scottish Ministers and COSLA. This was based on individual finance templates, which were submitted by local authorities, reviewed, and adjusted through joint Scottish Government and COSLA processes. The funding methodology affected individual local authority allocations: some received more money under the financial template approach than they would have under a formula-based approach and vice versa. The funding for the expansion transitioned to a formula-based allocation from 2022-23 onwards.

Under the multi-year agreement, the Scottish Government committed to provide revenue funding of an additional £567 million per year by 2021-22, bringing annual public spend on ELC to £990 million by 2021-22. In addition, local authorities would be provided with total capital funding of £476 million to support buildings projects to create new capacity to deliver the expansion.

At the conclusion of the initial multi-year agreement, the Joint ELC Finance Working Group undertook an annual process to review financial performance and ascertain costs and equitable distribution. The work was detailed and brought together Scottish Government and local government partners to define what was required for a fair funding settlement. Throughout this period the funding was primarily made up of two elements: pre-expansion funding and expansionary funding. The expansionary funding was ring-fenced for use in funded ELC until 2024-25, when ring-fencing was reduced as part of Scottish Government’s commitment under the Verity House Agreement to review ring-fenced funding. In 2022-23, the ring-fenced component of the ELC budget was reduced by £15 million, largely reflecting data showing that there were 7.5% fewer three- and four-year-olds eligible for the universal offer than anticipated when the multi-year funding agreement was reached. From 2024-25 onwards, funding for delivery of the expansion – around £1 billion per year – has been distributed to local authorities through the General Revenue Grant. Additional funding to support delivery of the real Living Wage commitment was also provided in 2024-25 and 2025-26.

Based on Local Government Finance Statistics, gross expenditure on funded ELC (for the full 1140 hours, rather than just the expansion) in 2023-24 was £1,051,261,000 (Scottish Government, 2025b). In 2024-25, gross expenditure was £1,066,785,000 (in 2024-25 prices) (Scottish Government, 2026).

2.4 Wider context of the ELC expansion

2.4.1 The wider Scottish and UK policy context

There have been other changes in ELC policy since 2017, which are likely to impact on the delivery of the expansion and/or the outcomes being evaluated. The most notable of these are:

• real Living Wage: In March 2017, the Scottish Government announced that, by the end of the parliament, staff delivering funded ELC in private and third sector services, would be paid at least the real Living Wage.
• Deferred school entry: from August 2023, eligibility for funded ELC was changed so that all children who defer their entry to primary school are automatically entitled to funded ELC in their deferred year. This was piloted by 10 local authorities between 2021-22 and 2022-23.
• Equity and Excellence Leads: Since 2017-18 all local authorities have been funded to provide an additional graduate post in ELC settings in the most deprived areas to help support children's outcomes.

Other Scottish Government policies, strategies and funding streams implemented during the same period are also designed to contribute to improving outcomes for children, parents, and families. Most notably, these include: work to promote and support maternal health and wellbeing, and early child development; policy on care and family support, including The Promise; work on closing the poverty-related attainment gap, including the Scottish Attainment Challenge; the Tackling Child Poverty Strategy and delivery plans, which include action on fair work and employment support such as Fair Start Scotland; and the creation of the Scottish Social Security system, particularly the introduction of the Scottish Child Payment in 2021.

UK-wide policies also affect outcomes for children and families in Scotland. It is important to note that the Scottish Government does not have (full) control over some key policy levers, including parental leave and some aspects of social security (particularly Universal Credit and Child Benefit). The most significant policy changes during the period are the impacts of UK Government welfare reform on household incomes since 2010 and wider economic impacts of EU exit from 2020. While increases to the UK National Living Wage have had a substantial effect on raising the incomes of the poorest workers (Cribb et al., 2021), UK Government welfare reforms have reduced disposable income for many households with children on the lowest incomes. Scottish Government analysis found that reversing key welfare reforms that occurred since 2015 would bring an estimated 70,000 people out of poverty in Scotland in 2023-24.

2.4.2 Wider societal and economic context

Most significantly, the expansion of funded ELC has coincided with a number of societal and economic shocks. The ongoing impacts of COVID-19 and protective public health measures from 2020 placed significant pressures on local authorities, ELC providers, and families. This has been compounded by economic instability, persistent inflation, and the cost-of-living crisis from 2022. The ‘cost-of-living crisis’ refers to the ongoing economic pressures facing households and businesses who have seen the cost of everyday essentials, like food and energy, increase at a faster pace than household incomes. Many of the cumulative impacts of the societal and economic shocks have been most acutely felt by the most disadvantaged.

Impacts for the childcare sector and delivery of the expansion

The period during and since the pandemic was extremely challenging for businesses and professionals working in the childcare sector. This involved two periods of extended closure of most childcare providers in Scotland (in 2020 and early 2021), furloughing of staff, responding to new and changing restrictions and guidance, financial pressures, and changes in demand for childcare (Kustatscher et al., 2023). ELC staff were reported to experience increased levels of stress due to these increased demands and responsibilities, and research has found impacts on staff morale, wellbeing and mental health (Kustatscher et al., 2023).

The average cost of delivering childcare to children aged three to five years was estimated to increase by 10% because of the pandemic, for a variety of reasons including enhanced cleaning requirements and increased staffing costs due to self-isolation requirements. During 2022-23, childcare providers and local authorities, alongside the whole Scottish economy, faced significant inflationary pressures as a result of the cost-of-living crisis. Inflation, as measured by increases to the Consumer Price Index, reached 11% in the year to October 2022, which creates upward pressures on wages. The pandemic and inflationary pressures also led to slower progress in completing planned infrastructure projects for some local authorities.

The Scottish Government worked closely with the sector to provide support over this period. However, there were implications for the expansion. Ongoing issues in recruiting and retaining qualified staff were exacerbated by the combination of the impacts of the pandemic on the ELC workforce and the increased staffing needs created by the expansion (Audit Scotland, 2023; Kustatscher et al., 2023). Funded ELC providers reported relatively less impact on sustainability as funding was maintained for provision of expanded ELC throughout periods of closure. Impacts on other parts of the childcare sector were more acute. Full implementation of some aspects of the policy was delayed in recognition of challenges facing the sector, including the suspension of routine inspections by Care Inspectorate and Education Scotland and disruption to professional learning and qualifications (Scottish Government, 2021a; Kustatscher et al., 2023).

Impact on outcomes for children, parents, and families

The pandemic had a profound impact on the lives of all families in Scotland, whether they experienced illness or not. Access to ELC as well as many other public services was restricted. Protective public health measures also limited social interaction, and children spent more time at home. The impacts of the pandemic on the labour market included an adverse effect on household incomes, as many workers were made redundant, furloughed or had their working hours or wages cut. This resulted in financial distress and hardship for many families, particularly for those already experiencing socio-economic disadvantage (Scottish Government, 2020; Scottish Government, 2023b).

Many studies in the UK have found that mental health was negatively impacted by the pandemic, across the adult population as a whole and for some groups in particular (Scottish Government, 2020). For example, Naumann et al. (2022) reported that the negative effects of the pandemic on mental wellbeing in the UK were stronger for parents with children compared to non-parents.

Evidence from Scotland and the UK shows that the pandemic exacerbated existing inequalities in employment, with women, particularly young women and mothers, experiencing disproportionate labour market disruption. In Scotland, survey data from Close the Gap (2022) highlighted that women faced elevated job losses, reduced hours, and increased unpaid care demands. In the UK, data from the Office for National Statistics (ONS) (2022) indicated further pressure on mothers. Mothers’ employment remained relatively high overall in 2021. This coincided, however, with a persistent gendered difference in working patterns, with mothers more likely to work from home and rely on flexible arrangements.

In Scotland, recent analysis of national early childhood development surveillance data from 2019 to 2023 has shown that COVID-19 public health and social measures were associated with increased developmental concerns at 13-15 and 27-30 months (i.e. around age one and age two and a half years old) (Hardie et al., 2026; White et al., 2025). This suggests these children’s development had been affected by the pandemic prior to starting funded ELC. These findings are consistent with international evidence from population-level analyses and large cohort studies. While the longer-term impacts of the pandemic on children are still unknown, overall, the evidence suggests that a number of cohorts of young children have been negatively affected (Alcon et al., 2024; Jing et al., 2024; O'Connor et al., 2025). Some studies also indicate a disproportionate impact on those who were already disadvantaged (O'Connor et al., 2025; White et al., 2025). There are, however, limitations in relation to the variety of study approaches and contexts. The pandemic may have particularly affected development in early childhood as children have so many developmental milestones in such a short period of time (O'Connor et al., 2025). During early childhood, children's development is also very sensitive to various environmental factors, including potentially negative influences such as exposure to poverty and poor parental mental health (White et al., 2025).

The cost-of-living crisis has had the greatest impact on low-income households who are likely to spend a greater proportion of their income on essentials and who have few financial resources to cope with increased costs. Many parents have struggled with acute financial pressures. Early evidence suggests a significant impact on the wellbeing and mental health of adults and children living in low-income households (Scottish Government, 2023b).

Overall, this provides a challenging context for achieving the aims of improving outcomes for children, parents and families, as many studies have already observed negative impacts on these outcomes in the wider population over the period of the ELC expansion.

2.5 Delivery of the ELC expansion

In March 2020, at the outset of the COVID-19 pandemic, the Deputy First Minister announced that all local authority schools and ELC settings in Scotland would close, other than for the provision of critical childcare. In April 2020, Scottish Ministers decided to delay the full statutory implementation of the ELC expansion, and the duty on education authorities to provide 1140 hours of funded ELC was revoked.

From August 2020, Funding Follows the Child was subject to Interim Guidance, reflecting the impact of the pandemic. This provided a small number of flexibilities for local authorities and providers on aspects of the National Standard. Updates to the Interim Guidance were published in March 2021 and in May 2022, including interim guidance on sustainable rate setting, to reflect both the cost impacts of the pandemic and the emerging impacts of the cost-of-living crisis. Updated guidance was published in December 2023 to support full implementation of Funding Follows the Child and the National Standard.

Throughout the pandemic, the Scottish Government supported local authorities to work towards the delivery of 1140 hours of funded ELC where they were not already doing so. A majority of local authorities were able to implement expanded hours during 2020-21. In December 2020, Scottish Ministers and COSLA Leaders agreed that August 2021 would be the earliest feasible date for the implementation of the full expansion, following a review of readiness. The Children and Young People (Scotland) Act 2014 (Modification) Order 2021 was laid in Parliament on 22 January 2021 to reinstate the statutory duty from 1 August 2021.

In early August 2021, all local authorities confirmed to the Improvement Service that they were able to offer a place to all eligible children who applied for 1140 hours of funded ELC. In the Improvement Service (2021) September 2021 Delivery Progress Report, data returned by local authorities indicated that, as of the end of August 2021, 90,890 children were accessing funded ELC. Of these, 87% were accessing 1140 hours. Local authorities also reported that 510 of the 587 (87%) infrastructure projects identified as being necessary for the start of the expansion were complete.^[2]

Audit Scotland’s most recent review of progress on delivery (2023) highlighted that “the Scottish Government and councils did well to put in place 1140 hours of funded ELC by August 2021, during the COVID‑19 pandemic.” It noted that councils had completed most of the infrastructure projects and had significantly expanded the workforce. However, the report concluded that the “sector is fragile” and suggested that budget pressures and risks around workforce and the sustainability of private and third sector providers risked limiting flexibility and choice for families.