Funding follows the child and the national standard for early learning and childcare providers: guidance on criteria 7 - business sustainability

Introduction

1. The Scottish Government and local authorities have committed to the near doubling of the funded Early Learning and Childcare (ELC) entitlement from 600 to 1140 hours per year from August 2020 for all 3 and 4 year olds, and eligible 2 year olds.

2. In order to ensure that the funded entitlement is delivered in high quality ELC settings, Funding Follows the Child will be introduced in August 2020 alongside the statutory roll-out of the expanded entitlement.

3. Funding Follows the Child is ‘provider neutral’ and is underpinned by a National Standard that all settings who wish to deliver the funded entitlement will have to meet.

4. The Scottish Government and COSLA published national guidance on Funding Follows the Child in December 2018. This included supporting Operating Guidance and a Frequently Asked Questions document.

5. Funding Follows the Child was developed through the Scottish Government, COSLA and local authorities working in partnership through the Service Models Working Group and through wider engagement with the ELC sector, including with providers. This included a consultation on Funding Follows the Child and the underpinning National Standard, which was supported by a programme of engagement events^[1].

6. Scotland Excel has been commissioned by the Scottish Government, on behalf of the Service Models Working Group, to develop a suite of supporting technical guidance and information that supports local authorities and providers to implement Funding Follows the Child. The technical guidance documents cover:

• establishing sustainable rates for funded providers;
• meeting the business sustainability criteria in the National Standard; and,
• transition options on contracting.

Business Sustainability

7. This guidance will support implementation of the Business Sustainability criteria of the National Standard. It is primarily designed to support local authorities and private and third sector providers, including childminders, by providing guidance on appropriate information and evidence to consider when reviewing whether a setting meets the National Standard criteria for Business Sustainability.

Aim of this guidance note

8. This guidance note reflects best practice and evidence gathered from stakeholders to ensure that clear and comparable approaches are taken in the way that local authorities request and review evidence in relation to Criteria 7: Business Sustainability in the National Standard.