Nurseries warn of closure risk without new funding

Daycare centers could be forced to close if funding doesn’t keep up with costs, a childcare association warns.

The National Day Nurseries Association (NDNA) said providers in almost half of Scottish councils are still waiting to find out their funding just days before the new school year.

At least 15 councils are yet to decide the hourly rates they will be paying childcare workers from next week.

Only two councils have plans to keep up with the current rate of inflation.

Jonathan Broadbery, NDNA Director of Policy, told BBC Scotland the funding would not keep pace with the rising cost of living.

He added: “This is a real cut so savings can be made in these nurseries.

“Ultimately, if this continues, we are concerned that nurseries will be in a position where they may have to close.”

The NDNA asked all 32 Scottish parishes for their rates for funded free childcare places for three to five year olds and eligible two year olds.

27 councilors replied, 15 said they didn’t know yet. Of the 12 councils that have confirmed funding, four have not increased their rates since August last year.

Only two parishes, Angus and Stirling, are making increases that keep pace with the current rate of inflation.

Susan McGhee of Flexible Childcare Services Scotland says it’s difficult to provide childcare services without knowing the level of funding. The group has nurseries across Scotland,

“It’s almost like asking someone to sell something in a store and only later understanding what to charge for it,” she said.

“As an organization we employ around 175-180 people. How can we maintain the level of income to pay these wages fairly and offer fair working hours?

“All those things that we want to be able to do as a good employer – to provide the children in our services the right quality experience with the right resources, the right employment and the right training for the team.”

The NDNA said the situation was putting pressure on nurseries to seek revenue elsewhere.

This could include higher fees for younger children not covered by the grant policy, or for additional hours parents may purchase outside of funded childcare.

NDNA Scotland chief executive Purnima Tanuku said she had “never seen an image with so much uncertainty”.

She warned that if the childcare sector is to continue to implement the Scottish Government’s policy of 1,140 free hours of childcare, councils, which had set funding at the same level as last year, “need an urgent review of their hourly rate”.

“With costs rising, these rates are far from sustainable and the sector cannot be expected to deliver places at a loss,” she said.

The Scottish Conservatives’ spokesperson for children and young people, Meghan Gallacher, said it was “unacceptable” that so many councils were in the dark about the fees they would be paying to childcare workers so close to the start of the new school year.

“The stark results show how nursery schools in Scotland remain in limbo,” she said.

Local government agency Cosla said setting interest rates is a matter for each individual council.

A spokesman said: “Councils are in the process of working through the necessary governance processes to set tariffs and recognize that this information needs to be made available to providers as soon as possible.

“All councils are operating from constrained budgets which have been made worse this year by rising inflation and rising energy costs, prompting all service areas to urgently review budgets.

“This has undoubtedly influenced rate-setting decisions by some councils.”

A Scottish Government spokesman said: “The joint policy of the Scottish Government and Cosla is clear that tariffs should reflect delivery costs, allow scope for reinvestment and allow private and third sector services to pay staff at least the Real Living Wage .”