Funding follows the child and the national standard for early learning and childcare providers: interim guidance - update March 2021

Impact of COVID-19

The impact of the pandemic on all our lives led to a delay in the statutory roll out of 1,140 hours, which was intended to be introduced in August 2020. That duty has now been reinstated to come into effect from August 2021.

In line with public health guidance all ELC providers have, to date, experienced two periods of significant restrictions throughout 2020 and 2021. Following the latest period of restricted operations, all providers were able to reopen to all children on 22 February 2021. Providers must, however, continue to operate in line with current scientific and public health advice, and the guidance to support the continued safe operation of ELC settings will continue to be subject to review and updated when further evidence is available.

Scotland’s routemap has been revisited and has been brought into line with the current public health measures and with the levels approach to the pandemic restrictions. It is important that ELC providers understand how these restrictions apply in the area that their setting is located.

This interim guidance serves to identify the areas in which the impact of the pandemic may have been such that it has prevented settings or authorities from being able to demonstrate delivery against aspects of the National Standard. Where this is the case then some flexibility may be required.

For example, the Care Inspectorate replaced routine inspections as a result of the pandemic in March 2020 to focus on Key Question 5: Operating an early learning and childcare setting (including out of school care and childminders) during the pandemic. The new inspection timetable is based on intelligence and risk and may mean some settings will not initially receive an inspection based on quality themes. We also recognise the impact of the pandemic will mean that some settings who were working towards improving their Care Inspectorate quality evaluations will not have an opportunity to complete this work ahead of August 2021.

Access to some professional learning and qualifications may have also been affected by the pandemic. Where this is the case this could leave some settings at a disadvantage in relation to the staffing, leadership and management criteria in the National Standard.

The closure and continued furloughing of staff may also have impacted on settings’ ability to demonstrate improvement and workforce development. The impact of the pandemic also continues to give rise to concerns for many providers regarding their financial sustainability, which could make it more challenging for some providers to meet aspects of the National Standard (for example, the Business Sustainability criteria). Following the further period of closure in early 2021 it is expected that some concerns will remain as:

• providers are expected to face continued higher costs of delivery in order to meet the public health guidance requirements
• income from private sources may be below business as usual levels (due to potential restrictions on capacity as a result of the public health guidance, and expected lower levels of parental demand)
• current financial and business support schemes start to be reduced and removed (in particular the Coronavirus Job Retention Scheme, now extended to September 2021), and repayments will start to be required on any support provided through loans (for example the Bounce Back Loan Scheme)

To support this local authorities will need to continue to work in partnership with funded providers to reach agreement on sustainable local funding models which recognise the interplay with national reliefs and support.

In particular, local authorities should consider the impact of the continuation of contracted, or expected, revenue streams to funded providers to support a provider neutral approach to ELC provision which promotes short and long term sustainability. For example, many funded providers in the private and third sector will have restructured their business models, and invested in their settings, in the anticipation of delivering an expanded ELC entitlement from August 2020. Lower volumes of payments for the funded hours than had been expected will have implications for the sustainability of these settings.

In light of these factors it is recognised that a degree of continued flexibility will need to apply to certain aspects of the National Standard from August 2021.

It is also recognised that the ongoing public health measures in place to respond to the pandemic may affect local authorities’ ability to fully implement all of the Funding Follows the Child principles.

A new timetable for the full implementation of Funding Follows the Child and the underpinning National Standard for all ELC providers will be agreed by the Joint Delivery Board in the months following 1,140 implementation, taking account of sufficient notice required for both education authorities and ELC providers.