Funding follows the child and the national standard for early learning and childcare providers: guidance for local authorities

Section 1: Funding Follows The Child

1. How many funded hours are children entitled to?

From August 2020, children will be entitled to up to 1140 hours of early learning and childcare for all 3 and 4 year olds and eligible 2 year olds, from the relevant start date. These funded hours are free to parents at the point of access and their child's entitlement can be used in any funded provider who meets the National Standard, has a space available and is willing to enter into a contract with the local authority.

Legislation states when children are eligible for their funded entitlement based on their birth dates. Some local authorities operate different systems and it is important to contact the local authority for detailed information about when your child can start receiving their funded hours.

2. What choice do parents have over where their child can access their funded hours within a local authority?

Local authorities will be able to tell parents and carers about the range of options available in each local area. All settings who meet the National Standard will be eligible to apply to become a funded provider. The types of settings can range from childminders to nurseries to outdoors and we have asked local authorities to communicate these options to parents in an accessible way.

In addition, Scottish Government will be producing guidance for parents to help them choose ELC for their child, based on their child's individual needs.

If a parent or carer wants their child to access their funded entitlement in their chosen setting, they should find out from the setting whether they are a funded provider. If they are, then the child will be able to access their funded hours with them, if they have a space available, can meet their child's needs and the setting is willing to enter into a contract with the local authority. It may be that the specific pattern of attendance the parent or carer wants is not available and we would ask that they work with the funded provider and the local authority to identify the best place for their child and to meet their family's needs.

3. Can a parent ask for their child to take their funded hours when they want to take it?

There should be a range of delivery models available to children across a local authority area although this needs to be within a defined framework. For example, as set out in legislation, the minimum number of weeks over which a child can access their entitlement is 38 weeks.

In order to ensure that the Funding Follows the Child approach is sustainable, realistic and in line with local ELC delivery plans, different session times and models will be available in different settings.

The best way of exploring options is to contact the local authority as well as potential funded providers directly to find out what the options are.

4. Can a parent choose a blended model using more than one setting for their child's statutory entitlement?

Yes. There are a number of models available for children and some parents and carers may choose, for example, to access a nursery for some of their child's entitlement and use a childminder for the rest. The local authority will be able to tell parents and carers what options for blended models are currently available and how this can be managed. They may also consider other models if the setting is a funded provider or is eligible to apply to become a funded provider.

It is important to be aware that, in order to ensure that the Funding Follows the Child approach is sustainable and realistic, it may be that particular session times and models are in place in some settings but not in others. If a parent or carer wishes to use a blended model of funded hours, communication between the local authority, funded providers and families will be key in ensuring the child's ELC experience is of a high quality.

5. Does a child have to access all of the funded hours they are entitled to?

No. Parents and carers may choose to only take some of their child's funded hours. There is no requirement for children to take any or all of their funded entitlement and we would encourage parents and carers to explore the options available to their child.

If a parent or carer chooses not to take the full funded entitlement, they should discuss how this can be managed with the local authority and their chosen funded provider. We would expect the local authority and the funded provider to work closely to meet their request in the best interests of the child.

6. What are the minimum and maximum number of hours my child can take in a session?

At the heart of our ambitions is a high quality ELC experience for children. The Children and Young People (Scotland) Act 2014 currently sets out that "education (local) authorities must ensure sessions of [funded] early learning and childcare are:… each of more than 2.5 hours but less than 8 hours in duration."

We are confident we can demonstrate providers are able to offer a high quality experience over longer sessions and the National Standard will offer opportunities for us to measure this over time through Care Inspectorate quality evaluations.

We intend to introduce legislative changes ahead of August 2020 to remove the condition to have a minimum number of funded hours in a session and to increase the maximum number of funded hours in a session to 10 hours.

While flexibility for families is a welcome element of the expansion of hours, the key purpose of the approach is to ensure children have the best start in life. Therefore, the Scottish Government will reserve the right to amend this in legislation again if we are concerned that evidence is showing a detrimental impact on children's wellbeing and outcomes.

7. A parent wants to access their funded hours outwith the local authority. How will this arrangement be managed?

One of the key principles of the Funding Follows the Child approach is to allow parents and carers to make their own choices about where their child accesses their funded hours. The operating guidance states that "the choice of setting available to families is not restricted to their own local authority boundary" and it is expected that local authorities and funded providers do their best to grant this request if there are spaces available.

If a setting is already a funded provider with another local authority then this should constitute enough evidence to fund the child in their chosen funded provider. Local authorities should work together to share information about funded providers and provide clarity and reassurance that funding can be given to this provider. It is unlikely that the setting would need to apply to become a funded provider in more than one local authority area.

Good practice would be for local authorities to keep details of these arrangements and evidence of checks for suitability to be a funded provider centrally alongside evidence of funded providers in their own area. This will ensure a clear audit trail of compliance and funding outputs for children resident in the area.

8. What do local authorities and settings need to communicate to parents and carers from now until 2020?

The main messages for parents and carers should cover the full range of options which are available to them, across all funded providers, during the transition phase. Some local authorities have already begun to add 'Expansion Newsletters' as well as other support materials to their websites to let families know about some of the changes which are happening or planned for the next few months. This practice is helping to provide clarity for parents and carers and offers an overview of the types of settings they can begin to look into for their child.

Where there are settings already providing funded hours, it would be helpful for parents and carers to know what they plan to offer as part of the expansion. This could include an overview of the patterns of attendance they plan to offer under the funded entitlement as well as a short description of the setting's philosophy and practices in creating high quality ELC experiences for children.

In addition, clear information for parents and carers about how to apply for access to their child's funded entitlement will be necessary and we would encourage local authorities and funded providers to support parents who are completing this application, if they need it.

For parents who are already accessing their child's funded hours in a provider who is funded by the local authority, clear communication about whether the setting is meeting the National Standard needs to be arranged. This will ensure parents have time to explore other options, if this is required.

The Scottish Government will develop an online resource for parents to empower them to make informed choices about the right ELC setting for their child. In addition, we will also work with providers and local authorities to develop a national information resource that all settings and local authorities can draw on and circulate to parents to allow for consistent messaging.

9. How will local authorities set the affordable and sustainable funding rate for funded providers in the private and third sectors?

We have been working with Scotland Excel to develop technical guidance on how to set an affordable and sustainable rate for funded providers in the private and third sectors, including childminders. The sustainable rate should meet the following:

• The rate will support delivery of a high quality ELC experience for all children;
• It will be a rate that reflects the cost of delivery, including the delivery of national policy objectives;
• The rate will allow for investment in the setting – staff, resources and physical environment; and
• It will enable payment of the real Living Wage for those childcare workers delivering the funded entitlement.

The sustainable rate should allow for re-investment of profit and surplus as this will allow a funded provider that meets the National Standard to continue to provide the service. The cost structure of the market should inform the rate set and it will be important for local authorities to work with colleagues in their Finance departments to understand the rates being set and define what is sustainable in their local area.

Information on how other local authorities are setting their rates may be shared on the Knowledge Hub where we would encourage local authority representatives to consult and gain ideas from others when taking forward this process.

10. What is meant by 'reducing the burden' on providers to deliver the funded hours?

There is a commitment to simplify the process for becoming, and continuing to be, a funded provider. As the primary guarantors of quality, local authorities need to satisfy themselves that a funded provider is offering a high quality of ELC for children in line with the National Standard. As a result, funded providers will be asked to submit evidence, both upon application and through compliance monitoring procedures, to show how they are meeting the National Standard.

At the moment, we know that there are variations in the approaches adopted by local authorities as to how and when they purchase services from funded providers in the private, and third sectors, and from childminders. We are aware from our consultations and engagement with the sector that these approaches can sometimes be cumbersome and restrictive for providers.

Whilst each local authority will continue to be responsible for implementing these steps locally, the introduction of the National Standard offers an opportunity to move towards a simpler and more uniform approach across the country. This should reduce the burden on settings when presenting evidence as a funded provider as well as simplify the process for local authorities. We are working closely with Scotland Excel to ensure this applies to all of the National Standard criteria and to suggest potential simplified options for the application process in local authorities moving forward.

11. Can local authorities add their own additional criteria to complement the National Standard?

All settings wishing to become a funded provider in Scotland will be assessed against the same National Standard criteria and no additional criteria will be applied.

With the exception of scrutiny quality evaluations from the Care Inspectorate and Education Scotland, local authorities will be responsible for assessing and monitoring compliance with the National Standard in all funded providers, including those provided by local authorities, as part of their contract management arrangements and in their role as guarantors of quality.

12. What is meant by the phrase 'in-line with local ELC delivery plans'?

Local parental demand will be the primary driver of local flexibility, but within a system which safeguards high quality provision. The Children and Young People (Scotland) Act 2014 places a duty on local authorities under Section 50 to consult and plan on delivery of ELC. Statutory guidance states that this consultation should include models, flexibility and systems of choice so that parents can inform options on offer and local authorities can develop systems to allocate options. The aim is to develop a high quality system of ELC that meets a range of needs.

This local demand will be reflected in local ELC delivery plans, which set out the comprehensive strategic direction for the delivery of ELC in their local area, respond to local need and will reflect the diversity of the communities that local authorities cover and therefore all funded providers will be expected to deliver ELC in line with the programme set out in the delivery plans.

13. How will settings apply to become funded providers with the local authority?

There is a commitment to simplifying the process and reducing the burden on settings who wish to become a funded provider. To support this Scotland Excel are producing guidance for local authorities on transition options. However, it is expected that there will be three key steps to becoming a funded provider:

(1) meet the criteria within the National Standard, as assessed by the local authority;

(2) receive the offer of the locally-set sustainable funding rate from the local authority; and

(3) sign a contract to become a funded provider.

Each local authority will continue to be responsible for implementing these steps locally, retaining flexibility around the local process. Our work with Scotland Excel alongside consultation with relevant stakeholders will aim to ensure that this process is fair, transparent and simple for as many settings and local authorities as possible. We will publish further support materials to provide guidance and advice on this process by March 2019.