Watchdog warns of £160 million 'black hole' in Scottish nursery plan

New report questions whether Scottish government's flagship free nursery hours expansion can be delivered on time and on budget

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The Scottish government has underestimated the cost of its pledge to almost double free nursery hours by £160 million per year, according to a new report by the public spending watchdog, Audit Scotland.

It also says there is a “significant risk” that councils will not be able to deliver the promise on time.

The report – which is published today and has been described as “damning” and a “wake-up call” by opposition politicians – says that increasing free nursery hours from 600 to 1,140 by 2020 for all 3- and 4-year-olds and some 2-year-olds will cost £1 billion a year – £160 million more than the Scottish government estimate of £840 million per year.

It goes on to question whether councils will be able to deliver the pledge on time, saying it will be difficult to increase the infrastructure and workforce required, in the limited time available.

Nursery hours pledge

In January last year, Tes Scotland reported similar fears when councils warned the key SNP pledge – which works out as 30-hours free childcare per week during term time – was in jeopardy because of a failure to plan how it would work financially and practically.

Today's report, entitled Early learning and childcare, also casts doubt on whether the move – which the government says will help close the attainment gap and help parents back to work or into training – will provide value for money. It states the government had failed to measure the impact of the previous rise in free hours from 450 to 600 hours in 2014, which to date has cost around £650 million to introduce.

In England, as of September last year, working parents of 3- and 4-year-olds with an annual household income of up to £199,998 became eligible for 30-hours free childcare per week during term time, so long as neither parent earned over £100,000.

The Audit Scotland report says: “[The government] has invested almost £650 million of additional funding since 2014 to expand funded Early Learning and Childcare (ELC) to 600 hours, but it did not plan how to evaluate the impact of the expansion. This means it is not yet clear whether this investment is delivering value for money.”

It continues: “There are significant risks that councils will not be able to expand funded ELC to 1,140 hours by 2020. In particular, it will be difficult to increase the infrastructure and workforce to the levels required, in the limited time available. The Scottish government should have started detailed planning with councils earlier, given the scale of the changes required.”

'No better gains'

Scottish primary school leaders’ body the AHDS has long said it is opposed to the increase in free hours.

It argues it is “a very expensive intervention” that will lead to “no better gains for children than part-time” and prioritises quantity over quality.

Their fears that the increase will do nothing to improve the educational outcomes of children were recently backed up by research from the longitudinal survey Growing Up in Scotland (GUS). It found increasing free nursery hours to 1,140 per year was unlikely to improve children’s outcomes by the time they entered school.

GUS even warned that, if the expansion of free hours resulted in a dip in the quality of nursery provision, extra time in pre-school “may well have more detrimental effects”.

The new Audit Scotland report calls on the government and councils to urgently finalise and implement plans for changes to the workforce and infrastructure and to collect better information on the cost of different models of pre-school education and their impact on children’s outcomes.

Fully funded policy

Scottish Conservative education spokeswoman, Liz Smith, said the report was “damning in terms of exposing the failures of SNP policy on childcare” and made it clear there had been “no attempt” to evaluate different options for the delivery of the free hours, or the cost implications.

She added: “This is a very serious wake-up call for the SNP. It has been all talk on the surface but, on the ground, there are fundamental issues at stake which are impacting on the effectiveness of children’s care.”

Scottish Labour education spokesman Iain Gray said “a £160 million black hole” had been blown in a flagship government policy.

“This is what happens when childcare policy is written to fit on an election leaflet, rather than to fit around the lives of Scottish families,” he added.

The Scottish government, however, insisted it remained on track to deliver 1,140 hours by 2020 and that it was not unusual for “people to have different ideas as to the final cost” of a major project. The key aspect was that the Scottish government had pledged to fully fund the policy, said the minister for childcare and early years, Maree Todd.

Ms Todd said: “There is little doubt that this is a very ambitious pledge and the report reflects the scale of the challenge we have set ourselves. But, we believe that the prize of high-quality early learning and childcare is more than worth it.”

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