Early learning and childcare - Sustainable Rates Review Implementation Working Group: terms of reference

Background

The payment of sustainable rates to funded providers in the private, third and childminding sectors is vital to supporting financial sustainability, and is a key aspect of Funding Follows the Child.

During 2023, COSLA and Scottish Government conducted a joint Review of Sustainable Rates. This was an evidence-led review, with input from local government and the childcare sector, that examined the process for setting rates for 2022-23 to identify where rate-setting processes could be improved further and how to ensure rates are set in line with the aims of the guidance.

The Review set out a wide range of actions, which can be summarised as:

a. Updating the Sustainable Rates Guidance with a view to greater standardisation and a focus on improvements in relation to 2 year old rates, meal rates, childminding rates and provider engagement

b. Working with local government and funded providers to consider options for obtaining more robust and reliable cost data, including considering a more central approach. This will include consideration of timescales for implementing any recommended changes and how the impact of any changes would be monitored

c. Collecting evidence on how local authorities are supporting funded providers to meet the needs of children with Additional Support Needs, to determine if further consideration of this policy area would be beneficial

d. Facilitating Improvement Service support of local authorities with provider communications, hosting regional focus groups and creating rate-setting case studies to support understanding of any updates made.

The Scottish Government and COSLA will implement the actions recommended within the Review over the remainder of this parliament.

Collecting more robust and reliable cost data will involve technically complex work, and will be critical to underpinning wider improvements to the rate-setting process, including effective delivery of updated guidance. It will be important to ensure that this data is captured through a process that is proportionate for providers and that the outputs are accessible and able to inform the sustainable rates setting process. The Scottish Government and COSLA are committed to working with local government and the sector to design and deliver a new approach to collecting robust and reliable cost data.

Purpose and remit

The primary role of the Sustainable Rates Review Implementation Working Group will be to inform the approach taken to collecting robust and reliable data on the costs of delivering funded ELC in private, third and childminding sector services. The group may also be asked to provide feedback on draft updated sustainable rates guidance for future years.

It is expected that this group will have a two year lifespan.

The Sustainable Rates Review Implementation Working Group is a new group, bringing together sector and local government representatives, alongside Scottish Government ELC policy representatives and COSLA. The Working Group will be co-chaired by Scottish Government and COSLA.

The Working Group will have an advisory function, with final decisions taken by COSLA and Scottish Government.

There will be opportunities for providers to directly feed into this work. The Working Group will be supported by Provider Reference Groups which will provide input on specific issues, drawing from their frontline experience. The Working Group will advise on the remit and structure of provider input, and on the establishment of any separate workstreams should they be required. 

Our intention is that this Working Group should complement the established groups that already exist as part of the Scottish Government’s ELC programme, and which include local government and key representative bodies from the sector. For example, it is expected that updates from this Group will be provided to the Childcare Sector Working Group, whose membership includes the sector representative organisations, and the National Providers Forum. As with these other groups, the issues raised in this Working Group and actions agreed will feed directly in to developing policy and inform advice to Ministers.

Objectives

The objectives for the Working Group are to:

• support the development of an approach for collecting robust and reliable data on the costs of delivering funded ELC in private, third and childminding sector services
• identify how the sector can be supported to provide this cost information; and
• provide feedback on drafts of updated sustainable rates guidance (once prepared by Scottish Government and COSLA officials)

Membership

Working Group membership comprises representatives from Scottish Government, local government and childcare sector representative organisations.

A full membership list is avaliable.

Dependent on the approach identified for collecting the cost data an external contractor (organisation TBC) may be appointed and would join the Working Group.

Where a permanent member may need to be absent they can appoint a deputy to attend in their place. In the case of Scottish Government, attendees may vary dependent on the areas of business to be covered.

Membership will be reviewed after one year, and each year thereafter, should the group not be drawn to a close after two years.

Frequency and Location of Meetings

It is expected that the Working Group will meet quarterly. Meetings will primarily remain online to allow providers to participate from across Scotland.

Agenda

To be set by the Chairs with input from Forum members.

Secretariat

The Secretariat will be provided by the Scottish Government.

Operation of the group

We expect that Working Group meetings will be conducted in an atmosphere of openness and candour, and that members will feel empowered to voice their opinions and, where necessary, to raise concerns. However, there will be a clear expectation that this will be in the context of mutual respect and constructive challenge.

In order to support this open environment, the use of social media or other external communications in relation to discussions held within the Working Group will not be permitted without the consensus of its members.

Whilst members may wish to raise points relating to wider ELC policy and funding approaches, or to raise specific local issues, it is important to note that the remit of the Working Group role is to deliver the objectives set out in paragraph 12. The Working Group, and supporting sub-groups, also do not have a direct role in brokering or resolving local issues between providers and commissioners.

The Chairs will delegate to the Secretariat, responsibility for setting and maintaining the operating arrangements for the Working Group, including agreeing the agenda and preparing any papers or items for discussion.

The Secretariat will issue the agenda and any background papers in advance of each meeting. A high level note of the group’s discussions will be circulated for agreement after each meeting. The meeting note will not attribute input to individuals and will be published on the Scottish Government website.

Subgroups

It may be agreed that subgroupsshould be established to provide input on specific elements of the rates approach. In such cases, subgroups will operate according to the terms outlined in paragraphs above.