The Scottish government has underestimated the cost of extending free nursery hours for preschool children by more than #163;4 million, according to figures released by Aileen Campbell, the minister for children and young people.
The money that councils will need to deliver the provision to looked-after two-year-olds is set to more than quadruple, from an original estimate of #163;1.1 million to #163;4.5 million. Meanwhile, the amount set aside for local authorities to fund the free hours in nurseries run by charities and the private sector has almost doubled, rising from #163;1.2 million to #163;2 million.
The figures were revealed in a letter sent earlier this month by Ms Campbell to the Scottish Parliament’s finance and education committees.
The increase in free nursery hours from 475 to 600 a year, which will apply to all three- and four-year-olds and to looked-after two-year-olds, is due to be introduced in 2014. It is one of the provisions in the Children and Young People Bill, currently making its way through Parliament.
In her letter, Ms Campbell said that the decision to increase funding for free nursery places for two-year-olds in care was made “following helpful discussions with Cosla”, the local authorities umbrella body.
Regarding the additional #163;800,000 funding for nurseries run by the private and voluntary sector, she said that this would “more accurately reflect the financial pressures on local authorities and partner providers”.
But Conservative MSP Liz Smith, who sits on the education committee, accused the government of being “weak” in explaining the rising costs.
Last week, the committee heard that parents paying for nursery places subsidised families who accessed only free hours to the tune of #163;584 per child per year, because local authority funding did not fully cover the costs of private nursery care.
Chief executive of the National Day Nurseries Association (Scotland), Purnima Tanuku, told the committee that unless councils upped payments to partner providers, that figure would rise to #163;738 per child next year when the entitlement to free nursery hours increased.
The Scottish government’s #163;2 million is aimed at plugging that gap, but the escalating costs have been causing disquiet.
One local authority official described the increase as “concerning” when he gave evidence on the bill to the Parliament’s finance committee last week.
Magnus Inglis from Midlothian Council said: “If one element of costs can go up fourfold after they have been thought about more, can other elements of costs do the same? If they could, the shortfall would be significant.”
A government spokeswoman said: “The previous figures were estimates; these are concrete figures set in the budget.”
The total costs associated with the Children and Young People Bill are estimated at #163;79.1 million in 2014-15, peaking at #163;138.9 million in 2016-17.
