Funding follows the child and the national standard for early learning and childcare providers: transition options guidance on contracting

This document outlines options for local authorities to consider when developing their processes to contract with private and third sector providers.

Section 1: The Policy Landscape

1.1: Funding Follows the Child

8. Funding Follows the Child places choice in the hands of parents and carers allowing them to access their child’s funded entitlement from any setting – in the public, private or third sector, including from a childminder – who meets the National Standard, has a place available and is willing to enter into a contract with their local authority.

9. The key aspects of Funding Follows the Child which will affect a local authority’s service provision, including any contractual relationship with funded providers are:

  • Families will be able to access high quality funded ELC with the provider of their choice if that provider meets the criteria set out in the National Standard, wishes to deliver the funded entitlement, has a space available, is able to offer the funded hours in line with local ELC delivery plans (subject to the setting’s overall capacity) and, where the provider is willing to enter into a contract with the local authority;
  • The choice of setting (for example, a nursery, childminder, etc.) available to families is not restricted to their own local authority boundary;
  • Information for parents and carers will be clear and accessible to make them aware of the options available to them, in particular, the different types of settings that can be chosen when accessing their funded entitlement;
  • Settings must ensure that the funded hours are free at the point of access and parents and carers are not required to purchase additional hours beyond the funded entitlement in order to access their child’s funded hours at a setting;
  • Local authorities retain the statutory responsibility for ensuring that the funded entitlement is available to all eligible children in their area, and will be the primary guarantors of quality and key enablers of flexibility and choice – ensuring that there is a range of options for families in their area;
  • Local authorities and providers should work together meaningfully and in genuine partnership in delivering flexible ELC provision, while continuing to ensure that a high quality experience for children is maintained and accessible to all;
  • Funded providers who agree to deliver the funded entitlement will commit to paying the real Living Wage to all childcare workers delivering the funded entitlement and commit to operating Fair Work Practices; and
  • A commitment to simplifying the process for, and reducing the burden on, providers to deliver the funded entitlement. All providers will face the same National Standard for becoming, and continuing to be, a funded provider.

Key Consideration

The process used to appoint funded providers should align with the policy objectives, including being flexible enough to permit new providers to provide services throughout the contract lifetime.

1.2: The National Standard for ELC Providers

10. The National Standard sets out the criteria for all funded providers, regardless of whether they are in the public, private or third sectors or childminders need to meet in order to deliver the funded entitlement beyond August 2020.

11. The criteria focus on what children and their families should expect from their ELC experience, regardless of where they access their funded entitlement. This will ensure that, as part of the ‘provider neutral’ Funding Follows the Child approach, there is consistency of high quality provision across all funded provider types. It is also underpinned by the regulations in the Public Services Reform (Scotland) Act 2010 which applies to all care services across Scotland, including daycare of children and childminding settings.

12. The National Standard criteria cover:

  • Staffing, leadership and management;
  • Development of children’s cognitive skills, health and wellbeing;
  • Physical Environment;
  • Self-Evaluation and Improvement;
  • Parent and carer engagement and involvement in the life of a setting;
  • Inclusion;
  • Business Sustainability;
  • Fair Work Practices, including payment of the real Living Wage;
  • Payment Processes; and,
  • Food.

13. All settings, regardless of whether they are in the public, private or third sectors or childminders, must provide sufficient evidence to assure the local authority that they meet all of the National Standard criteria and relevant sub-criteria.

14. Private and third sector providers, including childminders, wishing to deliver funded hours will enter into a contract (or written agreement) with the local authority to become a funded provider and must meet the requirements outlined in the process, including agreeing to the terms and conditions and the sustainable funding rate.

Key Consideration

A local authority’s process for contracting or entering into an alternative arrangement with ELC providers must include the National Standard criteria. Providers must provide evidence to assure the local authority that they meet the National Standard criteria to become a funded provider.



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