Exclusive:Mother who was a consultant for the Scottish Government warns free childcare scheme must be overhauled

Clare Hammond has previously been a consultant who was hired by the Scottish Government, local authorities, health and social care partnerships, NHS boards and Audit Scotland.

Away from work, she has recently been spending any spare time carrying out an in-depth analysis of a flagship, £1billion-a-year government initiative.

Her interest in the free childcare policy was piqued in April when Ms Hammond was told by Corner House nursery at Spylaw in Edinburgh that it would be closing all rooms to under three-year-olds from the beginning of May, as a result of staff shortages.

It meant her son Cian could stay on at the nursery but his younger sister Mairead could not.

"It gave parents about two-and-a-half weeks notice to find alternative childcare,” said Ms Hammond.

“It was quite a shock. My partner is from England and I’m from New Zealand, so we don’t have the back-up, informal childcare.

"So actually our ability to get access to nursery really does affect whether we can work or not.”

Free childcare has been a key policy of the Scottish Government in recent years, and a similar initiative is due to be introduced in England.

In August 2021, the number of hours of funded childcare that Scottish children were eligible for almost doubled, from 600 hours a year to 1,140 hours a year, or the equivalent of about 30 hours per week in school term-time.

It now covers all three and four-year-olds, as well as some two-year-olds, and the Scottish Government plans to roll it out further so it also benefits parents of one-year-olds and all two-year-olds.

But The Scotsman revealed last week that exasperated private nursery owners are considering taking legal action over the implementation of the policy, particularly the way funding is distributed via councils, which they say is resulting in an escalating number of closures.

Ms Hammond was alarmed by what she found when she started looking more closely into the way the scheme was operating.

She is now involved in organising a public meeting to discuss the pressures in the sector on July 26, at Polwarth Parish Church, in Edinburgh.

“I went and did some research into it, and it just made me realise that these unintended consequences are really starting to bite,” she said.

"You can see it happening in England as well but in Scotland you’re seeing nurseries close.

“When you look at some of the figures, it’s really, really scary.”

Ms Hammond found that in the period between 2016 and 2026, a total of 64 per cent of child minders are expected to have left the industry.

New entrants into child-minding, meanwhile, plummeted by 75 per cent between 2016 and 2021.

She said almost three quarters of private sector nurseries in Scotland were struggling to recruit staff, in part because council-run facilities are paying 30 to 50 per cent more.

Ms Hammond estimated that some local authorities are retaining £1,500 per year, per child, from the government funding they receive, instead of passing it on to non-council nurseries and childminders.

"If the government does extend those funded hours further, you will likely see local authorities do what they did last time and up the salaries they are offering in order to be able to staff them,” she said.

"Because local authorities have a statutory obligation to meet those hours, through their provision and contracted hour provision from the independent and third sector nurseries.

"And the more the third and independent sector nurseries start closing, the more that local authorities are going to have to rely on their own provision to do it.

"So you’re likely to see an increase in the salaries offered by local authorities, which is likely to lead to more people moving from independent and third sector into the local authority workforce, which is likely to lead to more closures.

"This is potentially going to lead to them charging more in council tax, if that’s allowed, or appealing to Scottish Government to allow them to charge more in council tax.

"Or we’re likely to see a reduction in other services that aren’t statutory services.

"But even if they don’t extend those hours, you can see there are so many nurseries starting to close now and that it’s actually not viable for nurseries and childminders to be funded providers in a lot of cases.”

She added: "There is no point being able to get free childcare if nobody has places for our children.”

Ms Hammond called for an end to salaries being “supressed” in the third and independent sector, and said the administrative burden placed on nurseries and childminders must be be more “proportionate and realistic”.

"We need Scottish Government to open that policy up and start from scratch, because otherwise if we just keep blaming the nurseries for being poor quality, then we are just going to see more nurseries close, and then this is going to explode,” she said.

Council umbrella body Cosla has said rates for childcare providers are set in line with the guidance agreed by the Scottish Government and Cosla, and within the “funding envelope available to them”.

A Scottish Government spokesperson said: “Private, third sector and childminding providers are a valued part of the delivery of the 1,140 hours early learning and childcare (ELC) offer.

"Important progress has been made on increasing the payment of sustainable rates and improving conditions for staff working in this part of the sector. However, we know there is more work to be done.”

She said resources resources available to local government increased in 2023/24 by more than £793 million, and a joint review was being undertaken with Cosla on the sustainable rates paid to providers, which ministers will consider this summer.