Funding follows the child and the national standard for early learning and childcare providers: transition options guidance on contracting

Section 5: Procurement

5.1: The Light Touch Regime

29. The Light Touch Regime is set out in the Public Contracts (Scotland) Regulations 2015. It outlines specific rules when contracting for certain social and other specific services, known as “services to the people”. These types of services generally have a limited cross border dimension and so are of lower interest to cross-border competition. Consequently, a ‘lighter touch’ is permitted when letting contracts for such services. These services are specified in Schedule 3 of the Public Contracts (Scotland) Regulations 2015.

30. The Light Touch Regime offers local authorities the flexibility to develop a process that considers the specifics of the services required and the requirements and needs of the users (in this case, children and their families) whilst still ensuring compliance with their Financial Regulations and Standing Orders. It also offers the opportunity to reduce the administrative burden of contracting for both funded providers and local authorities.

31. As noted above, where services are specified in Schedule 3, greater flexibility is permitted in public tenders for the award of the services. For ELC services, two services specified under Schedule 3 may apply (and are identified in Table 2).

Table 2: Potential Relevant Services from Schedule 3 of the Public Contracts (Scotland) Regulations 2015

32. Neither of these codes are defined in the Scottish Education system as having a particular meaning and therefore either could be used to define the requirements.

33. Regulation 74 of the Public Contracts (Scotland) Regulations 2015 states that:

“A public contract or framework for social and other specific services listed in Schedule 3 must be awarded in accordance with this Section (Social and Other Specific Services) where the value of the contract or framework is equal to or greater than the threshold indicated in regulation 5(1)(d(thresholds).”

5.2: Options under the Light Touch Regime

34. The Light Touch Regime is designed to give local authorities more discretion (compared to other regulated procurements) in how they organise the process for the choice of service providers in a way that they consider most appropriate.

35. Under the Light Touch Regime, for ELC services, the local authority can develop a process that allows them to:

• Request evidence from providers regarding the National Standard criteria (with all ELC providers being assessed against the same National Standard criteria);
• Request additional contracting documentation, such as insurance documents; and,
• Set out the terms and conditions of contract, including the sustainable funding rate.

36. Although there are certain requirements that a local authority is required to follow - which include complying with the general principles of transparency, equal treatment and non-discrimination, proportionality and mutual recognition - these are limited to publishing a Contract Notice or Prior Information Notice, a Contract Award Notice and applying mandatory exclusion criteria (regulation 58(1) and (3)). There are, therefore, a number of ways that the local authority could establish a process under Light Touch Regime to align with both the policy requirements and regulatory requirements.

37. Whilst Scotland Excel is unable to comment on the exact process that would be best suited to meet this requirement for individual local authorities (as this will be based on a variety of factors including local authority resource as well as local market conditions), it is our view that the Light Touch Regime will apply to contracts for these types of services (where the threshold applies) and that it establishes a framework for a compliant and comparable approach to be taken to ELC procurement processes across local authorities. The Light Touch Regime can encompass a variety of procedures tailored to suit the local authority’s requirements.

38. An example of how the Light Touch Regime process could be used when considering an ELC providers’ suitability to deliver the funded ELC entitlement and to enter into a contract with the local authority is set out in Section 6.

5.3: Alternatives to the Light Touch Regime

39. It should be noted that a local authority may decide that ELC services do not fall under the applicable procurement rules after seeking its own legal and specialist advice.

40. Where this is the case, the local authority should consider the points detailed in Section 2 (Process to become a Funded Provider) of this document. In addition, the local authority should record its reasoning for this decision in an open and transparent manner and should ensure that a fair and transparent approach is taken to the distribution of available funding in their area.

Each local authority will define their own process for contracting with funded providers.