Financial review of early learning and childcare in Scotland: the current landscape

Children

This chapter lays out the available information on child registrations in funded and unfunded ELC settings. The data underlying this chapter are published by the Care Inspectorate and the Scottish Government.

Some of the key points include:

• For both funded and unfunded ELC, there were around 28,000 registrations of two year olds, 116,000 registrations of three and four year olds across all ELC service providers (including childminders) in term 1 of academic year 2014/15.
• For funded ELC, there were registrations for around 4,300 two year olds and 87,300 three and four year olds at the beginning of academic year 2015/16.
• While almost all eligible three and four year olds are registered for the funded entitlement (97 per cent), a significantly smaller proportion of eligible two year olds are registered (around 7 per cent of the two year old population).

Registrations

As at December 2014, looking across both funded and non-funded provision, there were 28,330 (48 per cent of the population) registrations of two year olds, 54,350 (89 per cent) registrations of three year olds and 61,800 (around 100 per cent ^[3] ) four year olds registrations across all ELC service providers (including childminders). Excluding childminders, there were 23,660 (40 per cent) two year old registrations, 50,160 (82 per cent) three year old registrations and 57,790 (99 per cent) four year old registrations. ^[4]

Figure 1: Share of registrations by setting type

Source: Care Inspectorate Childcare statistics 2014

Table 2: Number of child registrations by age

	Total	Under 1 year old	1 year old	2 year old	3 year old	4 year old
Active services by type:
Childminding	32,500	860	3,840	4,660	4,190	4,010
Children / family centre	9,110	260	940	1,950	2,630	2,540
Crèche	2,610	120	270	370	450	400
Holiday play scheme	1,650	30	30	40	70	80
Nursery	135,240	2,300	12,220	18,200	43,350	52,450
of which: providing add. services	29,390	570	2,900	4,860	7,670	8,090
of which: no add. services	105,850	1,740	9,320	13,340	35,680	44,360
Out of school care	38,460	0	20	30	60	640
of which: providing add. services	29,500	0	20	30	60	530
of which: providing no add. services	8,970	0	0	0	0	110
Playgroup	7,470	0	60	2,760	3,240	1,210
Other services	2,800	40	120	320	360	470
Total	229,840	3,610	17,500	28,330	54,350	61,800
Total excl. childminding	197,340	2,750	13,650	23,660	50,160	57,790

Source: Care Inspectorate Childcare statistics 2014

The vast majority of two, three and four year olds in ELC are registered with nurseries (around 80 per cent). There is likely to be some overlap of children who are registered with more than one provider (estimated at around 2 per cent).

Figure 2: Two, three and four year olds registered with an ELC provider (incl. those who do not provide funded ELC)

Source: Care Inspectorate Childcare statistics 2014

Eligibility for funded ELC

Currently, all three and four year olds are entitled to 600 hours of funded child care per annum ( i.e. approx. 16 hours per week over 38 weeks). The offer commences the term after the child's third birthday. ^[5] Therefore, fewer children will be in their ante-preschool year during census week in term 1 of the academic year ^[6] and hence registrations for children in their ante-preschool year during census week will be around half the number expected to have registered by term 3 (April-June).

By the end of the last academic year, around 59,500 3 year olds and 61,200 4 year olds are eligible for funded ELC.

Two year olds are eligible to receive the funded entitlement if at least one parent receives either ^[7]

• Income Support
• Job Seeker's Allowance (income-based)
• Employment and Support Allowance (income-based)
• Child Tax Credit only (up to an income of £16,105)
• Working Tax Credit and Child Tax Credit (up to an income of £6,420)
• Incapacity Benefit/Severe Disablement Allowance
• State Pension Credit
• Support under Part VI of the Immigration and Asylum Act 1999
• Universal Credit

Annex B sets out the eligibility criteria for the above benefits.

Furthermore, two year olds are eligible if they are looked After or under Kinship Care Order/Guardianship.

To arrive at an estimate for the number of eligible two year olds, data from HMRC and DWP can be used. HMRC hold information on claimants of tax credits. DWP hold information on all other benefits.

Data from DWP and HMRC suggest that around 15,200 two year olds qualify for funded ELC via JSA, ESA, IS, CTC, WTC& CTC, and around a further 650 qualify as a result of being Looked After, under KCO or Guardianship or falling under the wider out of work benefits criteria. In addtition, around 100 two year olds qualify under the Immigration and Asylum Act. In total, 16,000 two year olds qualify for funded ELC. At an estimated population of around 58,000 two year olds in 2015, this equates to around 27 per cent of the population. ^{[8] , [9]}

Table 3: Estimated number of two year olds by benefit criterion

Benefit type	Number of two year olds
IS	8,000
JSA (adj. income-based)	900
ESA (adj. income-based)	1,100
PC/ SD/ IB	150
CTC only	2,400
WTC & CTC	2,800
LAC/ KCO/Guardianship	500
Immigration & Asylum Act	100
Total	15,950

Source: DWP and HMRC benefit claimant data 2015

The following paragraphs set out how many two year olds are eligible under each individual qualifying criterion.

Most of the above benefits are mutually exclusive. Recipients on JSA are usually ineligible for ESA and vice versa, and to receive IS, one cannot be in receipt of JSA or ESA. To be eligible for WTC, one has to work more than 16 hours which implies ineligibility for JSA, ESA and IS. Recipients on PC have to be of State Pension age which means they are ineligible for JSA, ESA and IS. Parents who receive any of the out-of-work benefits are likely to be eligible for CTC as well. ^[10] Hence, the number of children qualifying via the CTC only criterion excludes those children who are also eligible via any of the other criteria.

Universal Credit ( UC)

With the introduction of Universal Credit, IS, JSA, ESA, WTC & CTC, and CTC are going to become obsolete as eligibility criteria since they will be replaced by Universal Credit. While the corresponding income threshold is not yet determined, the threshold is supposed to maintain the current volumes of eligibility.

Looked After children ( LAC), Kinship Care Order ( KCO)/Guardianship

The proportion of children who are subject to a LAC order or under KCO/Guardianship is estimated to lie at around 3 per cent of the population. ^[11] This means, as at 2015, there are around 1,700 two year olds who are LAC or under KCO/Guardianship. However, we expect around 70 per cent of these children to qualify under the criteria above already. Hence, only 500 additional two year olds are estimated to qualify as a result of being LAC/under KCO/Guardianship.

Children in need

As per the Children (Scotland) Act 1995 local authorities are under a statutory duty to provide appropriate services which may ELC to children in need. A child is defined to be 'in need' if

• he or she is unlikely to achieve or maintain, or to have the opportunity of achieving or maintaining, a reasonable standard of health or development unless the local authority provides services for him or her
• the child's health or development is likely significantly to be impaired, unless additional services are provided
• the child is disabled or he or she is affected adversely by the disability of any other person in his or her family.

It is mainly two year olds for whom eligibility to funded ELC via the in-need-status is relevant, ^[12] as the entitlement becomes universal when they turn three. However, children in need of all ages may get additional hours beyond the 600 hours if deemed appropriate.

While in-need status itself does not necessarily entitle children to the 600 hours of funded ELC, it is expected that the overwhelming majority of children in need would also qualify under the criteria outlined above.

Total number of children entitled to 600 hours funded ELC

Summing up, the number of two, three and four year olds eligible for ELC under the Children and Young People (Scotland) Act at the time of the 2015 census is estimated at around 100,000. By term 3 (April-June) we would expect this figure to rise to around 136,000.

Identification of eligible children

Education authorities are not under a duty to identify those children and families who are eligible for the 600 hours ELC entitlement. Parents or carers who wish to use the entitlement for their child need to apply for a place for their child. As the entitlement is not compulsory, and depends upon parents or carers taking up a place for their child, local authorities, health visitors and local job centres plus, aim to promote the entitlement at a local level, complemented by national information campaigns.

Local job centre plus can verify a parent or carer in receipt of: IS, JSA, ESA, IC or SDA, PC or UC (based on an award letter they receive; this changes when any circumstances change). Parents or carers receive an annual award letter from HMRC confirming level of income and receipt of CTC or WTC& CTC. Support under Part VI of the Immigration and Asylum Act 1999 can be confirmed through social work.

Uptake of funded early learning and childcare

As at December 2015, around 97,000 children were registered for funded ELC. ^[13] Of those, 72,100 (74 per cent) took up their offer at early years settings run by the local authority. The number of registered two, three (ante-preschool year) and four year olds (preschool year) was 91,600 at the time of the census, with an additional 4,500 children deferring entry into primary school while remaining eligible for funded ELC and around 1,200 children under two who qualify via in-need criteria. ^{[14] , [15]} Note that children registered to receive local authority funded ELC at more than one centre may be counted more than once, potentially leading to a small overestimate of the true uptake.

Table 4: 2, 3 and 4 year olds registered at services offering funded ELC

Centre type	Under 2 year olds	2 year olds	3 year olds (Ante-preschool year)	4 year olds (Preschool year)	Deferred	Total
Local Authority	938	3,494	20,489	43,711	3,502	72,134
Partnership - other	21	177	1,752	2,239	211	4,400
Partnership - private	264	650	7,692	11,377	745	20,728
Total	1,223	4,321	29,933	57,327	4,458	97,262

Source: Scottish Government Early learning and childcare statistics 2015

In December 2015, uptake of funded ELC was at 99 per cent and 95 per cent respectively for children in their ante-preschool (recorded as three year olds) and preschool year (recorded as four year olds). Uptake was considerably lower for two year olds at around 7 per cent of the total two year old population, although only a subset of two year olds are eligible. ^[16] Overall uptake by two year olds was recorded to be lower in 2015 than in 2014, although this may be due to improvements to data collection.

Table 5: Uptake of early learning and childcare by local authority as at December 2015

	2 year olds	% of 2 year old population	3 + 4 year olds	% of 3 & 4s eligible	deferred entry	% of eligible for deferral	Total
Aberdeen City	36	1%	3,284	90%	163	14%	3,483
Aberdeenshire	69	2%	4,538	93%	304	18%	4,911
Angus	84	7%	1,667	92%	125	20%	1,876
Argyll & Bute	49	6%	1,285	103%	65	16%	1,399
Clackmannanshire	42	7%	880	103%	19	7%	941
Dumfries & Galloway	84	6%	2,234	98%	131	17%	2,449
Dundee City	217	12%	2,468	100%	144	19%	2,829
East Ayrshire	124	9%	2,071	101%	47	7%	2,242
East Dunbartonshire	59	6%	1,644	94%	90	17%	1,793
East Lothian	53	4%	1,802	95%	122	20%	1,977
East Renfrewshire	62	6%	1,596	92%	62	11%	1,720
City of Edinburgh	383	7%	7,830	95%	485	19%	8,698
Eilean Siar	15	6%	402	106%	25	19%	442
Falkirk	109	6%	2,768	100%	110	12%	2,987
Fife	456	11%	6,321	98%	227	11%	7,004
Glasgow City	393	5%	9,206	89%	404	13%	10,003
Highland	49	2%	3,900	105%	316	26%	4,265
Inverclyde	152	19%	1,098	88%	60	14%	1,310
Midlothian	65	6%	1,678	103%	96	18%	1,839
Moray	31	3%	1,529	100%	111	22%	1,671
North Ayrshire	218	15%	2,244	100%	50	7%	2,512
North Lanarkshire	315	8%	5,881	97%	160	8%	6,356
Orkney Islands	16	8%	320	96%	50	47%	386
Perth & Kinross	108	8%	2,168	95%	208	28%	2,484
Renfrewshire	361	19%	2,858	99%	167	18%	3,386
Scottish Borders	84	7%	1,773	102%	81	14%	1,938
Shetland Islands	-	0%	427	101%	44	31%	471
South Ayrshire	65	6%	1,693	98%	97	17%	1,855
South Lanarkshire	363	10%	5,398	101%	204	12%	5,965
Stirling	82	9%	1,535	114%	52	12%	1,669
West Dunbartonshire	134	13%	1,619	102%	64	13%	1,817
West Lothian	43	2%	3,143	92%	175	16%	3,361
SCOTLAND	4,321	7%	87,260	97%	4,458	15%	96,039

Source: Scottish Government Early learning and childcare statistics 2015

Time spent in formal childcare

Data from the Understanding Society survey, ^[17] conducted by the University of Essex, suggest in 2015, two, three and four year olds in Scotland spent on average 17.09, 16.65 and 21.00 hours per week in childcare (funded and unfunded), respectively. ^[18]

These results are supported by Growing Up in Scotland data which shows the average number of hours spent in childcare for 3 year olds is estimated at 16.19 hours post CYP Act (14.56 hours pre-Act).

Table 6: Hours spent in formal childcare by age group

Age	2 years	3 years	4 years
Average hours per week spent in ELC	17.09	16.65	21
Annualised hours (38 weeks)	649.42	632.7	798

Source: Understanding Society Wave 4

Looked after children ( LAC)

Under the provisions of the Children (Scotland) Act 1995, looked after children are defined as those in the care of their Local Authority. The majority will fall into the two categories of looked after at home and looked after away from home.

A child (or young person) is defined as 'looked after at home' if he or she has been through the Children's Hearings system and is subject to a Supervision Requirement (regular contact with social services) with no condition of residence. In this case the child continues to live in their regular place of residence (generally the family home).

A child is 'looked after away from home' if she or he has been through the Children's Hearings system and is either

• subject to a Supervision Requirement with a condition of residence
• subject to an order made or authorisation or warrant granted by virtue of Chapter 2, 3 or 4 of Part II of the Children (Scotland) Act 1995
• being provided with accommodation under Section 25 (a voluntary agreement)
• or is placed by a local authority which has made a permanence order under Section 80 of the Adoption and Children Act 2007. In these cases the child is cared for away from their normal place of residence, by foster or kinship carers, prospective adopters, in residential care homes, residential schools or secure units.

Table 7 shows the number of looked after children aged 1-4 over time. ^[19]

Table 7: Number of LAC over time by age

	2012	2013	2014	2015	% of 2015 total	LAC as % of population
Children	3,001	2,919	2,823	2,712	18%	1.1%

Source: Scottish Government Children's social work statistics 2014-15, additional tables

Most looked after children have become 'looked after' for care and protection reasons. Some will have experienced neglect or mental, physical or emotional abuse. Some parents are unable to look after their children because of their own substance misuse or poor parenting skills.

Children with complex disabilities sometimes need to be looked after in specialist residential schools. Similarly, vulnerable, unaccompanied minors seeking asylum and young people who have been illegally trafficked into the UK may also become looked after to ensure their wellbeing.