Private childcare providers in Scotland are struggling to survive as they face significant underfunding from local councils, according to a new report by the National Day Nurseries Association (NDNA) Scotland.
Funding gap widens between private and public nurseries
The report, based on a survey of 200 private nurseries across Scotland, found that the average funding rate for three and four-year-olds was £5.31 per hour, which was 17% lower than the average cost of delivering the service. This means that private nurseries are losing an average of £1,029 per funded child per year.
In contrast, the average funding rate for council-run nurseries was £7.97 per hour, which was 28% higher than the average cost of delivering the service. This means that council nurseries are making an average of £1,936 per funded child per year.
The report also revealed that the funding gap between private and public nurseries had widened by 10% since last year, despite the Scottish Government’s pledge to increase the funding rates for private nurseries to match the cost of delivery.
Private nurseries face staff shortages and financial pressures
The NDNA Scotland report warned that the funding crisis was putting private nurseries at risk of closure, as they faced increasing staff shortages and financial pressures.
According to the report, 71% of private nurseries had difficulties recruiting qualified staff, and 59% had difficulties retaining staff. The report attributed this to the low wages and poor career prospects in the private sector, as well as the competition from the public sector, which offered higher salaries and better benefits.
The report also found that 65% of private nurseries had increased their fees for non-funded hours, and 35% had reduced the number of funded places they offered, in order to cope with the funding shortfall. The report estimated that the average annual fee for a full-time place in a private nursery was £12,636, which was 14% higher than the UK average.
The report warned that these measures could have a negative impact on the accessibility and affordability of childcare for parents, especially those from low-income and disadvantaged backgrounds.
NDNA Scotland calls for urgent action from the Scottish Government
The NDNA Scotland report urged the Scottish Government to take urgent action to address the funding crisis and ensure the sustainability of private nurseries, which provide 70% of the funded childcare places in Scotland.
The report made several recommendations, including:
- Increasing the funding rates for private nurseries to reflect the true cost of delivery, and ensuring that they are paid on time and in full by local councils.
- Introducing a national pay scale and career structure for early years staff, and providing funding and support for training and development.
- Reviewing the impact of the 1140 hours expansion on the childcare market, and ensuring that there is a level playing field between private and public providers.
- Engaging with private nurseries as equal partners in the delivery of funded childcare, and involving them in the planning and decision-making processes.
Purnima Tanuku, chief executive of NDNA Scotland, said: “Our report shows that private nurseries in Scotland are facing a funding crisis that threatens their viability and quality. This is not only bad for the nurseries, but also for the children and families who rely on them for their childcare needs.”
She added: “The Scottish Government has made a bold commitment to provide 1140 hours of funded childcare for all three and four-year-olds, and eligible two-year-olds, by 2024. This is a laudable aim, but it can only be achieved if private nurseries are properly funded and supported to deliver this service.”
She concluded: “We urge the Scottish Government to act on our recommendations and work with us to ensure that private nurseries can continue to provide high-quality, affordable and accessible childcare for all children in Scotland.”