Early learning and childcare - Sustainable Rates Review Implementation Working Group minutes: June 2024

Attendees and apologies

• Scottish Childminding Association (SCMA)
• Early Years Scotland (EYS)
• National Day Nurseries Association (NDNA) Scotland
• Association of Directors of Education in Scotland (ADES) Early Years
• Association of Directors of Education in Scotland (ADES) Resources
• Improvement Service
• Convention of Scottish Local Authorities (COSLA)
• Scottish Government (Chair) (SG)

Apologies

• Directors of Finance Network
• Care and Learning Alliance 

Items and actions

Sustainable Rates Review Implementation overview and approach

Paper Sustainable Rates Review Implementation Working Group (SRRIWG) 1.01 provided an overview of the joint Convention of Scottish Local Authorities (COSLA) and Scottish Government Sustainable Rates Review process; an update on progress made in delivering the programme of actions set out in the review and wider work related to sustainable rate setting; and an indicative timeline for delivering the rates review actions.

The co-Chairs provided an overview of the joint Scottish Government and COSLA Sustainable Rates Review and the approach for delivering the programme of actions over the remainder of the Parliament. This included setting out the indicative timeline for review actions. 

An update was also provided on the sustainable rates setting process for 2024-25.

In the discussion that followed Working Group members highlighted:

• the approach to setting rates for 2024-25 was different from previous years, and it will be important to learn lessons from implementation
• some local authorities faced challenges in 2024-25 due to the agreed funding methodology resulting in funding allocations that did not cover their full costs of delivery. This was particularly the case for local authorities where a larger share of Early Learning and Childcare (ELC) provision is delivered through private and third sector providers and childminders
• it was highlighted that providers had noticed some variations as to how the 2024-25 sustainable rates guidance was being implemented by local authorities
• it was noted that the agreed minimum uplift approach that was applied in 2024-25 did not acknowledge the different starting positions, in terms of the level that rates were set at in 2023-24, across local authorities.
• members generally welcomed the overall approach proposed in the paper for delivering the actions in the Rates Review. They highlighted that provider involvement in the process was vital and that it will be critical to get the approach to the Provider Reference Group right
• it was acknowledged that significant time will be required for some actions to be delivered fully and for this to be reflected in the rate setting process. However, it was highlighted that some providers are currently facing significant challenges regarding their sustainability and that the timeline for delivery may be disappointing (although understandable) for them

Terms of reference

Paper SRRIWG 1.02 set out draft terms of reference for the Working Group, which were agreed by members (with no drafting changes).

Action: secretariat to finalise Terms of Reference and remove draft status.

Provider reference group 

Paper SRRIWG 1.03 set out a proposed approach for the operation of the Sustainable Rates Review Implementation – Provider Reference Group, and included draft terms of teference for the group.

Points raised in the discussion that followed:

• members welcomed that a Provider Reference Group would be established.
• it was highlighted that it will be important to ensure that everyone feels as though they have a voice, and that providers are comfortable participating
• concerns were raised that some providers who would like to participate may be deterred if they felt that meetings or sessions would be dominated by a small number of more vocal voices. It is important that the terms of reference clearly set out the expectations on the conduct of those who participate, and that an open forum for discussion should be encouraged
• providers need to be given very clear expectations with regards to their role on the Reference Group, and the person attending has to have a good understanding of the finances of the business/organisation. In particular, it should be clear that providers would be participating in their individual capacity and there would not be an expectation that they would need to represent or reflect the views of other providers. To enable this, it will be important to ensure a diverse membership with regards to the type of providers represented in the Group
• it was suggested that standard meeting formats may not be the best approach for the Group, and members asked if consideration could be given to alternative engagement options. This could include thematic workshops, which could allow for participation to widen to a larger number of providers. Members highlighted that themes could include operating in deprived areas, or in rural areas. A mixed approach could be adopted with a core Reference Group membership plus thematic workshops that allow more providers to participate
• a specific example raised was the need to give careful consideration as to how childminders are engaged as part of the process. As the majority are self-employed and work during most of the day it is very challenging for many to attend meetings during standard office hours. Members asked that consideration be given, in general, to the timing of meetings/workshops
• members asked the Scottish Government to consider what support could be offered to providers who participated and attended meetings and/or workshops. It was highlighted that it could be difficult for some providers to set aside the time due to challenges in having less staff available to cover time off the floor and the administration involved in participating

In order to progress the Provider Reference Group in a way that works for providers, the sector representative organisations on the Working Group will sound out their members on what approach to engagement would work best for them, and report back to the secretariat. The secretariat will also speak to the Care and Learning Alliance (CALA), who were unable to attend the meeting, with regards to this approach.
Following the feedback from the sector the proposal for the Provider Reference Group (PRG) will be updated and brought back to the Working Group.
The sector representative organisations on the Working Group indicated that they would be content to sign up to a joint communication for the sector setting out the role of the Working Group and Provider Reference Group.

Actions:

• sector representative organisation members of the Working Group to speak to some of their members regarding what approach to engagement through the PRG would work best for them, and feed back to the Secretariat
• secretariat to update Terms of Reference to reflect feedback from sector representative organisations, and share with members during the Summer
• secretariat to share draft communication for the sector with members following the meeting

Approach to the cost collection exercise

Paper SRRIWG 1.04 provided background information on previous exercises, both in Scotland and England, to collect data on the costs of delivering childcare, and asked members to consider the principles that would underpin the approach to the new cost collection. Supporting slide packs were presented, which included a focus on the 2022 Ipsos Mori cost collection exercise.

Points raised in discussion that followed:

• some members highlighted that they found the 2022 Ipsos Mori exercise to be valuable, and that it was particularly helpful to get a regional perspective
• it was noted that all local authorities have different starting points with regards to current rates
• some members highlighted that it can be difficult for them to get information from providers with regards to their costs of delivery
• providers have highlighted that it would be helpful to have more transparency with regards to the costs of delivery from both the local authority and private and third sector perspective. Any analysis would need to reflect the statutory duties and the wider role for local authorities, including the responsibility to ensure a place for every eligible child in their area, and that some local authorities also provide discretionary provision for children who would benefit from ELC but are not eligible
• as part of any work on local authority costs it would be important to capture the value and impact of ‘in-kind’ support offered by local authorities to their funded providers
• it is vital that the new cost collection exercise captures estimates of the return on investment/surplus for providers so that this can be reflected in future rate setting (and has been absent from previous cost collection exercises)
• careful consideration would be required as to how to get providers to fully engage in the cost collection process. It was highlighted that providers can often struggle to find time to complete surveys, and that it will be important to develop a proportionate approach to capturing the required information. The PRG will have a vital role in enabling this
• members expected a survey in some form to be required, which would be proportionate and accessible, but alongside this consideration should be given to other approaches. This could involve interactive workshops, or having deeper dives with some providers
• it is vital that the Scottish Government and COSLA build trust in the sector in the exercise. The Working Group and Provider Reference Group will advise on this, but initial suggestions included giving consideration for more face-to-face engagement opportunities
• communications around the cost collection exercise will be key. Experience from past surveys indicates that this may require considerable, and continuous, effort to encourage engagement. As part of this it is important to be very clear as to why the exercise is being undertaken and as to how the information will be used
• it was asked whether national rates would be considered as part of the work of the Working Group. It was clarified that the role of the Working Group is to support delivery of the Rates Review actions, which are focused on strengthening the current approach

Actions

The Secretariat will keep the Working Group updated on progress with the procurement exercise to contract an external delivery partner.

Any other business (AOB)

Actions:

• secretariat will provide a follow-up email with members, which will include slide packs
• secretariat to explore options for hybrid and/or in-person options for future meetings of the Working Group