Scottish Milk and Healthy Snack Scheme: statutory guidance

Section 2: Responsibilities of Local Authorities

6. Overview

6.1 The purpose of this section is to summarise the responsibilities of local authorities, noting that where local authorities also operate settings directly, the local authorities may also wish to read the guidance for settings at Section 3 'Responsibilities of Settings', below.

6.2 The Milk and Healthy Snack Scheme (Scotland) Regulations 2021 delegate a number of responsibilities to local authorities and confer other duties directly on them. They allow local authorities to:

• Determine that a payment period may be shorter than the default period of the interim period [thereby how often to make payments to settings in their area]
• Make direct and upfront payments to settings that have registered for the Scheme by the start of the payment period. Those settings should receive a payment on the first day of the payment period. Settings which register after the start of a payment period will receive payments within 4 weeks of registration, backdated to the date of registration.
• Establish and operate a registration process for settings in their area
• Collect registration data (Set out in Annex C)
• Report registrations and collect monitoring data at least annually to Scottish Ministers (Set out in Annex D)

6.3 While local authorities will have flexibility on how the registration, delivery and monitoring of the Scheme works on a local level, there are a number of principles which are fixed at a Scottish "national" level. These include:

• Settings must register (this is done by the provision of the necessary information) to participate in the Scheme. This is essential for the calculation of payments;
• It is not possible to opt-in to part of the Scheme. Settings registering for the Scheme must offer both milk or a non-dairy alternative and a healthy snack to children with the exception of those under the age of 6 months who would not receive solid food.
• Funding provided is calculated using the combined, interim flat rate of 58.2p per serving of milk, non-dairy alternative and healthy snack for every eligible child regardless of type of setting;

7. Registration

7.1 The Scheme allows local authorities to establish registration mechanisms to suit local needs.

7.2 Local authorities are responsible for putting in place and promoting their own registration arrangements and providing details of these to Scottish Ministers.

7.3 The information that is required for registration is set out in the Regulations, and is detailed at Annex C.

7.4 Local authorities will wish to ensure that the information sought will meet the legal requirements of the Regulations, to allow them to complete their annual return to Scottish Ministers. This information is required to calculate reconciliation payments.

7.5 Settings are required to register through a suitable and effective process that aligns with each local authority's approach.

8. In- year registration

8.1 The Regulations do not prescribe how local authorities should manage in-year registration; local authorities are asked however, to put in place measures that will avoid lengthy waiting periods for settings to join the Scheme. It is suggested that local authorities might wish to admit settings to the Scheme on a monthly basis; thereafter they may wish to set at least four payment points across the interim period, which would provide flexibility without creating undue administrative burden.

8.2 Once a childcare provider registers for the Scheme, payment must be made within 4 weeks of the date of registration. Payment should normally be back-dated no further than the date of registration.

9. Maintenance of registration (withdrawing from the Scheme)

9.1 Once a setting has registered for the Scheme, it is expected that this registration will remain valid unless a setting confirms in writing or electronically to the local authority that it wishes to withdraw from the Scheme.

9.2 Local authorities will be directed to provide an annual monitoring return to Scottish Ministers; in order to complete this and to determine annual payments (including reconciliatory), authorities will request information from registered settings, usually annually.

10. Payments by local authorities to settings

10.1 Local authorities are responsible for making upfront payments to settings, having regard to this interim guidance provided by Scottish Ministers. Payments will be based upon the anticipated benefit (the number of servings of milk, non-dairy alternative and healthy snack) that settings expect to provide. Benefit refers to the milk or non-dairy alternative and healthy snack item provided.

10.2 The Regulations enable local authorities to set a payment period of less than 12 months. Settings registering after the start of a payment period ("in-year registration") will receive payments within 4 weeks of registration, backdated to the date of registration.

10.3 From 1 April 2022, a combined flat rate of 58.2p will apply at the Scottish national level across all local authorities for the provision of milk, non-dairy alternatives and a healthy snack by settings. Settings have flexibility to assign funding to best suit their local needs.

10.4 The flat rate covers the cost of one 189ml or 200 ml portion of milk or specified non-dairy alternative or 189 ml first infant formula for children under 12 months and one healthy snack where children are aged 6 months or over.

10.5 The interim flat rate also covers the cost of a portion of fresh fruit or vegetables. Portions should include a variety of different types, flavours and textures. Serving sizes for pre-school children are smaller than those for adults. A rule of thumb is what a young child can hold in their hand. Examples include ½ large fruit or one small fruit.

10.6 The determination of SMHSS payments to registered day care settings should be calculated by multiplying Provision (the anticipated number of servings) for the payment period x 58.2p payment per serving. For reconciliation, payment should be based on actual number of servings for the payment period x 58.2p and payment adjusted as appropriate.

10.7 Where settings are operated directly by the local authority, the local authority will be responsible for the management of funding due, in line with its existing processes. The local authority is therefore not required to make a discrete payment to a named setting that it operates directly although this remains a possibility where this is helpful for local practice.

10.8 Settings must inform the local authority if circumstances change significantly and it is recommended this should be done within a month of the change occurring. An example of a significant change is a change in enrolment levels +/- 10% of the stated enrolment at registration. If there is doubt about whether a change would be deemed as "significant", local authority advice should be sought. In the instance of a child being absent from the child care setting due to illness or holiday, this would not necessarily be deemed a significant change in enrolment and the setting would therefore be eligible for this funding under the SMHSS.

10.9 Settings must also inform the local authority as soon as possible if due to a change of circumstances (such as closure) they are no longer entitled to a payment from the Scheme.

10.10 If a funded setting is found not to be providing the benefit to eligible children in accordance with the Regulations, a local authority may take whatever reasonable action is available to resolve the matter.

11. Payments by Scottish Ministers to local authorities

11.1 The Scottish Government will conduct a funding reconciliation exercise and provide additional adjusted payments for local authorities who are providing funding above the initial allocation distributed in Spring 2022.

12. Monitoring and Reporting

12.1 As with any public spending, Scottish Ministers have a responsibility to develop and maintain records of expenditure which may be required by Audit Scotland, and also be available for any public interest.

12.2 The purpose of monitoring and reporting is three-fold:

• To enable assessment of the reach and impact of the Scheme and inform any necessary amendments;
• To ensure collection of the information required to enable end of year financial reconciliations to take place.
• To ensure appropriate assurance of the Scheme and manage financial risks.

12.3 It is therefore envisaged that information sought will be information required to enable Scottish Ministers to fulfil these purposes.

12.4 As set out in the Regulations, local authorities are required to submit to Scottish Ministers an annual monitoring return. A standardised monitoring template will be provided by the Scottish Government.

12.5 The information derived from the returns will be used to enable the Scottish Government to assess the reach and uptake of the Scheme and inform the calculation of any reconciliation payments to local authorities, as well as future cost projections.

12.6 To complete the annual monitoring return and to ensure appropriate financial assurance, authorities will wish to seek information from registered settings.

12.7 The Scottish Milk and Healthy Snack Scheme Regulations provide local authorities with the power to require childcare providers to provide information for monitoring purposes.

12.8 At a local authority level, appropriate monitoring remains important and must be proportionate to the risks involved and align with the systems that local authorities already have in place. It is anticipated that authorities' existing internal audit processes will normally provide the appropriate level of assurance for the Scheme. In line with usual records keeping practice, settings will be asked to maintain receipts and records of purchase which may be requested by the local authority.

13. Reporting concerns

13.1 Where an individual or a local authority has a concern about how a setting is operating the Scheme, the expectation remains – as for other purposes – that the issue will be raised in the first instance with the setting; where this is not satisfactorily resolved, it may then be referred to the relevant local authority.

13.2 In the event of a concern about a setting's financial reporting associated with the Scheme, the local authority will work with Scottish Ministers to consider the appropriate action, informing other regulatory or enforcement bodies as necessary.