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

Section 4: Current Processes and Considerations

24. From 2020, local authorities will need to ensure their process for commissioning the delivery of funded ELC from providers is compliant with law and guidance including procurement regulations, its own internal procedural standing orders as well as relevant policies, such as Funding Follows the Child and the underpinning National Standard.

25. To ensure compliance with procurement regulations, local authorities are required to have consideration to the application of certain rules and regulations when spend exceeds a stated threshold for this type of service (see Table 1).

Table 1: Thresholds for public procurement at April 2019

26. The value of a contract is calculated by having regard to relevant regulations, for example, in the 2015 Regulations, the relevant provision is regulation 6(13), which calculates the value by reference to all contracts “of the same type” likely to occur in the 12 months or financial year period following the delivery of the first contract, so the value would be calculated on the basis of all funded provider contracts. This is the total external spend on ELC services within a 12-month period by the local authority.

27. Considering the applicable rules, Scotland Excel’s view would be that the procurement Regulations apply when contracting for these services. Where the value exceeds the threshold under the 2015 Regulations, currently £615,278, the Light Touch Regime set out for services of this type in the Public Contracts (Scotland) Regulations 2015 will apply. The Light Touch Regime is explained in more detail in section 5.1. Below the Light Touch Regime threshold value provisions of the 2014 Act apply.

28. The Light Touch Regime sets out a flexible and compliant route to market which is relevant for this type of service and should enable the outcomes required for the local authority, funded providers and families. The requirement of this process is lighter than other procedures set out in the Regulations including, for example, negotiated procedures. Local authorities may, however, consider that other procurement procedures are necessary to meet their needs and requirements once they have gained advice from their own advisers.

Key Consideration

A local authority may need to change or adapt their route to market to ensure it aligns with both Scottish Government policy (including Funding Follows the Child and the National Standard) and procurement regulations. This may mean developing a new process.