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

Section 3: Role For Local Authorities In Implementing The Funding Follows The Child Approach

Local authorities have a number of roles which are key to implementing the Funding Follows the Child approach.

They have the statutory duty to ensure that there is a funded place available for all eligible children in their area. Local authorities are also responsible for the provision of ELC through the medium of Gaelic for those parents who wish it for their children and for ensuring staff have adequate support in delivering a high quality experience through the medium of Gaelic.

With the exception of scrutiny quality evaluations from the Care Inspectorate and Education Scotland, local authorities will also 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.

Whilst it will be for local authorities to decide how to fulfil this responsibility, it is important that the process is transparent and that local authorities – as part of the commitment to simplify the process for, and reduce the burden on, providers to deliver the funded entitlement – share practice in order to encourage consistency of approach.

Local authorities should also work with funded providers to support meaningful and genuine partnership working. This requires clear and consistent of support that funded providers can expect from local authorities (as set out in Section 1 of this document).

This section sets out the expectations of the role of the local authority in implementing the Funding Follows the Child approach.

Monitoring Compliance against the National Standard

Local authorities will have the responsibility of monitoring the compliance of all funded providers against the National Standard, whether they are local authority, private or third sector providers, including childminders.

As guarantors of quality for the National Standard, the local authority will play a key role in ensuring each child is receiving a high quality ELC experience during their funded hours. While the Care Inspectorate quality evaluations will give an insight into compliance with those criteria in the National Standard, other criteria are not directly linked to the evaluations the Care Inspectorate makes about the quality of provision in a funded provider.

It will be important for local authorities to ensure that other criteria are also being met and to gather information systematically as well as responsively when information about a funded provider is made available to them.

Education Scotland inspections will be a valuable source of evidence in understanding the quality of ELC provision in a setting. Local authorities should explore the findings from any Education Scotland inspection to ascertain compliance against the National Standard. If this information highlights that a service is not meeting one or more of the criteria, the local authority should use this information to begin relevant procedures to improve the quality of the service.

When settings fail to meet Care Inspectorate criteria or any other criteria, the funded provider would be subject to a 'service improvement period' and may need enhanced improvement support. The local authority will need to be clear about the criteria which are not being met and how the service can improve this to ensure children receive high quality ELC.

Other information such as soft information from parents, media announcements or evidence from quality support visits can also be used responsively to explore a funded provider's compliance to the National Standard. The local authority will need to gather information about the evidence and make an objective decision about whether a setting is not meeting the National Standard.

Setting of Sustainable Rates

Local authorities will set an hourly rate locally that is paid to funded providers in the private and third sectors to deliver the funded entitlement which is sustainable and meets 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.

Local authorities are also expected to clearly set out the support that they are providing to funded providers in the private and third sectors, including childminders, in addition to the sustainable rate as part of the agreement. More information on how this can be achieved is included under 'Support for Providers and Staff'.

Local authorities are expected to draw on the separate guidance, which will be produced by Scotland Excel to establish sustainable rates.

Supporting the Delivery of the Free Meal Commitment

Every child attending a funded ELC session – which is any session that includes funded hours, regardless of whether they are mixed with 'paid for' hours – from 2020 will be provided with a free meal. Local authorities will provide settings with the funding to deliver the free meals, unless, in cases where a setting does not have onsite catering facilities, there may be an agreement that the local authority will provide the meals to the setting. Local authorities are expected to work in partnership with funded providers to support them in identifying solutions to deliver the free meals commitment, particularly where funded providers do not have onsite catering facilities.

Any funding provided to deliver this commitment will be additional to the sustainable rate for funded providers in the private and third sectors. Local authorities must ensure that there is transparency for funded providers as to the rate being provided for the free meal commitment.

As is the case for free school lunches, the up-take of the free meal will be optional. Parents and carers who prefer to provide their child with a packed lunch would be free to do so. As set out in the requirements of Criteria 5 – Parent and carer engagement and involvement in the life of the setting, funded providers are expected to ensure that parents and carers receive information on healthy eating habits.

Where the child's ELC entitlement is being delivered using a blended model, involving more than one provider across the day, it will be for the individual funded providers to agree with the family and the local authority who will provide the meal.

Ensuring Financial Sustainability

Local authorities must ensure that local authority funded providers delivering the funded entitlement are able to demonstrate – when required – that they are delivering their services in a manner that improves affordability for parents and carers and makes the most effective use of public funds, within the Best Value requirement of the Local Government in Scotland Act 2003. Further information on local authorities duty on Best Value is provided in theScottish Public Finance Manual.

Sustainability of funded providers is about more than just the funding rate that they receive. The competitiveness and business sustainability of funded providers may be impacted by policy and investment decisions taken by local authorities. The recruitment activity of local authorities can also impact on the sustainability of funded providers. It is important that local authorities give appropriate consideration to these potential impacts in exercising their statutory duties, undertaking recruitment activity, and in applying ELC expansion planning principles.

Investment decisions by local authorities should follow the principles set out in the ELC Expansion Planning Guidance. This is focused on making the best use of assets taking account of a sequential decision-making process as follows:

• a) Use what we have: Making full use of existing assets within the local authority (including, workforce, potential of the natural environment, buildings and infrastructure);
• b) Use what we purchase: Enhancing the use of partner assets – developing and extending existing partnership models against a default assumption of a continued mixed economy – strengthening both local authority and other provision (including, for example, childminders and blended models); and
• c) Create what we need: where full use of existing local authority services and assets, plus enhanced commissioning, still leaves a gap, plan to create or build new capacity, including outdoor nurseries.

Fair and Transparent Payment Processes

In order to ensure fair and transparent payment processes for parents and carers and for funded providers in the private and third sectors, local authorities will:

• comply with the legislation which prevents local authorities from charging parents and carers for ELC which they provide under the statutory duty;
• extend this legal obligation to funded providers through agreements, to ensure funded hours are free at point of access to the child; and
• continue to ensure that funded providers in the private and third sectors, including childminders, receive payments for the funded hours in a prompt and efficient manner.

No Charges for Funded Hours

The Children and Young People (Scotland) Act 2014, Early Learning and Childcare, Statutory Guidance states:

"Under section 33(1) of the 2000 Act, the entitlement to mandatory early learning and childcare should be provided without the payment of fees, including where this is delivered through partner providers under a section 35 arrangement."

Local authorities are expected to ensure that this requirement is reflected in agreements that are set with each funded provider in the private and third sectors.

Prompt and Efficient Payment to Funded Providers

It is vital that funded providers are paid promptly and efficiently to ensure that their cash flows are healthy.

There are already examples across local authorities of prompt payment practices, and we would encourage local authorities to share these examples of good practice with others. However, there are also examples of funded providers being paid a term in arrears, which can mean they have to wait for 2-3 months from the start of term to receive payment and this creates substantial cash flow problems for these funded providers.

As a minimum it is expected that local authorities should look to pay a funded provider within 30 days of the start of term and preferably much sooner.^[7]

The timing of payment should be stipulated in the agreement between the local authority and the funded provider or in the general conditions governing terms of business.

Inclusion

Local authorities have a duty under the Additional Support for Learning Act 2004 (as amended) to identify, provide for and review the additional support needs of their pupils. The Act also applies to 'eligible pre-school children' which was extended, as a result of part 6 of the Children and Young People's Act 2014 (the 2014 Act), to include eligible children aged two. This applies regardless of whether the child is accessing the funded entitlement in a local authority, private or third sector funded provider, including a childminder. In the context of children aged two, learning is defined as meeting developmental milestones.

The duties under section 6 of the Education (Additional Support for Learning) (Scotland) Act 2004 are explained in the Statutory Guidance to the Education (Additional Support for Learning) (Scotland) Act 2004.

Additional support falls into three overlapping, broad headings: approaches to learning and teaching, support from personnel, and provision of resources and could include making changes to the setting. This makes clear that decisions regarding what can be considered adequate and efficient provision can only be judged in the light of each child's circumstances.

It also makes clear that cost should not be the primary consideration in determining what provision is to be made but that decisions have to be taken in light of the authority's duties to secure best value and service improvement. Expenditure may therefore be unreasonable where the cost incurred would be completely out of scale with the benefits to the child or young person or where suitable alternative provision is available at a significantly lower cost. It may be also be considered unreasonable where substantial expenditure on new facilities would be completely out of scale to the benefits to the wider community. For example, the local authority will wish to consider whether the expenditure in providing for a particular child may be of benefit to others in the future.

In the interest of openness and transparency, the local authority must inform the person who made the request for additional support of their decision and explain their reasons. They must also notify the person making the request about mediation services (in the case of parents and young people) and dispute resolution procedures.

Support for Providers and Staff

Along with the funded rate, local authorities provide a range of benefits to settings who become funded providers. Additional benefits, over and above the funded rate, should be clearly outlined at the time of application to become a funded provider.

It is for local authorities to decide the best package to ensure high quality ELC provision is offered to children and families, based on their own local circumstances. However, local authorities should ensure that settings have a clear and consistent understanding of the level of support they can expect. Communicating this throughout the application and assessment process would contribute positively to meaningful and genuine partnership working across the local authority.

The type of support provided by local authorities to funded providers could include (but is not limited to):

• training programme resources;
• support for workforce planning;
• marketing and recruitment support;
• funding for staff to undertake relevant qualifications;
• grant funding for specific resources;
• buildings support; and
• regular contact through local authority ELC meetings.

Funded providers will have their own ideas about how they wish to be supported and it would be beneficial for local authorities to engage with funded providers regarding the type of support that would help to improve the quality of ELC in their settings.

Improvement support is also available through a setting's membership arrangements with Care and Learning Alliance (CALA), Early Years Scotland (EYS), the Scottish Childminding Association (SCMA), National Day Nursery Association (NDNA) as well as other national organisations.

There may be circumstances in which enhanced improvement support is required. This will include circumstances in which the withdrawal of a setting's funded provider status would have a significant impact on children's ability to access their funded entitlement within their local area. In these circumstances, a bespoke package of enhanced improvement support would be provided. Enhanced forms of support will be tailored to the requirements of the setting but may include:

• facilitation of support from other professionals who work with children (such as social workers);
• facilitation of good practice visits to other settings;
• support visits focussing on aspects of practice which require improvement, including specialists from Regional Improvement Collaboratives, teacher support teams and other settings;
• increased improvement support visits from local authority representatives;
• mentoring and coaching opportunities for practitioners and/or managers; and
• access to further, relevant training and development opportunities, such as workshops based on areas for improvement.

In the spirit of partnership working, the funded provider has a responsibility to implement improvement support strategies which are offered by the local authority. It is ultimately the setting's responsibility to secure progress against given improvement priorities in relation to the National Standard criteria.

It is expected that transparency and equity is applied across all funded providers when offering improvement support.

Supporting Parents and Carers to Make Informed Choices

Local authorities should provide clear and accessible information to help parents and carers to make informed choices about the best ELC setting for their child.

This will build upon the information that is provided at a national level, which will include information about the different types of ELC provision and how the Funding Follows the Child approach will work.

It is important that families understand what this will mean for them locally, and what their options are for their children.

Local authorities should make use of national resources to help parents and carers to understand the new approach. They should also having clear local information about what the local delivery plan will mean for parents and carers. This will include information about how funded hours can be allocated (e.g. with different types of providers, with different patterns of attendance, or in blended models).This will also require local authorities, as part of the partnership working approach that is a key aspect of Funding Follows the Child, to engage regularly with funded providers and to ensure that they have access to communication resources.

Local authorities will retain the duty set out under section 50 of the Children and Young People (Scotland) Act 2014 to consult representative populations of parents and carers on how the funded entitlement to ELC should be made available. As a result of these consultations, local authorities should then publish plans on how they will make their services available. These plans should be clear and accessible, and should explain what action is being taken in response to the local consultations.^[8]