“SAVAGE top-slicing” by local authorities threatens the viability of private nurseries, the Government has been warned. The Tories, meanwhile, put the scale of the “rip-off” of pre-school funding at pound;2 million.

The national playgroup association has already been forced to issue redundancy notices to almost half its part-time staff because it claims councils refuse to use the voluntary sector.

The attack on the authorities’ approach came from Patricia McGinty, vice-convener for strategy of the Scottish Independent Nurseries’ Association, speaking at the organisation’s annual conference in Dundee.

Local authorities hold the purse-strings in disbursing the Government’s pre-school grant of pound;1,140 per part-time place and the majority of local authorities hold back an average of pound;300 which they say is essential to assure quality and provide staff training.

But Mrs McGinty says the pound;300 is taken “arbitrarily and without negotiation”, and this is damaging the partnership the Government believes is so vital.

“Some providers need a high level of support. Others have invested in high-calibre staffing and resourcing of their facility. It is important to distinguish between the two when setting the top-sliced rate,” Mrs McGinty said. “Just because local authorities have the power to deduct from the grant does not mean automatically that it is the right thing to do.”

She warned that the skills shortage in recruiting early years staff could be exacerbated if the private sector could not set fair and competitive salaries because of inadequate funding.

A minority of local authorities regarded working with the private sector as “anathema”, Mrs McGinty said, and others paid lip-service to partnership but excluded the partners.

She believed that joint planning, collaboration and consultation were inevitable. Education authorities that attempted delay “disserviced the children in their community and limited their range of opportunities”.