Cost of early learning and childcare provision in partner provider settings

1 Introduction

This report presents data collected by Ipsos MORI on behalf of the Scottish Government on the costs and income associated with providing early learning and childcare ( ELC) among private and not-for-profit 'partner providers' ^[1] in Scotland. It is intended to inform Scottish Government analysis of options for extending free ELC provision from the current 600 hours to 1,140 hours for eligible two, three and four year-olds. This introductory section provides a brief background to the research, while the remainder of the report provides technical details. The report is accompanied by detailed data tables, in Excel format. As the purpose of this report is to inform further modelling, narrative about the results is kept to a minimum, bar a brief summary in Chapter Four. Our primary focus is on explaining how the figures were arrived at and any issues that need to be taken into account in interpretation and further analysis.

1.1 Background

Research has clearly established the social and cognitive benefits of high quality ELC for children. ^[2] Social and behavioural outcomes for children are enhanced for those who are attending high quality pre-school provision, ³ while academic ability is more developed for those children cared for by better-qualified ELC staff. ^[4] At the same time, ELC provides one of a number of levers for supporting parents from low income families back into work. As such, the availability of appropriate and affordable ELC has a major role to play in tackling child poverty, improving educational attainment, reducing intergenerational poverty ^[5] and reducing social welfare payments.

High quality ELC provision has been a core strand of Scottish Government policy over the last decade, with the dual aim of improving child outcomes and supporting parental (particularly maternal) employment. Since April 2002, Local Authorities have had a duty to secure a funded part-time ELC place for every 3 and 4 year-old whose parents wish it. From August 2014, the Children and Young People (Scotland) Act 2014 extended ELC entitlement, giving all three and four years olds entitlement to 600 hours ELC per year, as well as extending provision to two year olds whose parents are in receipt of eligible benefits (looked after two year-olds were eligible from 2012). ^[6]

The Scottish Government is committed to extending this entitlement to 1,140 hours a year of ELC for all 3 and 4 year-olds and eligible two year-olds by 2020. Initial Scottish Government analysis indicated that achieving this may result in expenditure increasing to around £800 million per year. However, the Scottish Government requires more detailed and up to date information about the actual costs of delivering high quality ELC in Scotland in order to inform modelling and planning around how to meet its future commitments to high quality funded ELC places.

1.2 About this study

Ipsos MORI Scotland was commissioned by the Scottish Government to fill this gap by conducting research among private and not-for-profit ELC providers across Scotland. An online survey of 'partner providers' (those currently providing government-funded hours for eligible two, three and four year-olds) collected detailed information about costs, income, capacity and occupancy. Cost information was also collected from a small sample (n = 10) of childminders across Scotland. ^[7]

The aim of the providers' survey was to provide as accurate estimates as possible of the costs associated with their provision of ELC for children under school-age, in order to inform Scottish Government planning and economic modelling for extending government-funded hours. Interviews with childminders were intended to assess the potential level of variation in costs incurred by childminders. Local Authority ELC providers were not included in this research - they were the subject of a separate research exercise undertaken by the Scottish Government.