1. Childcare and Our Economy Kenny Forsyth June 2016 1

2. KF here on behalf of Children in Scotland (but consulting on behalf of Renfrewshire Council) – Childcare Commission, PwC/KPMG/PA (Advisory/Corporate Finance), Public Sector Reform, 3 rd Sector Two fundamentals….Reform in Childcare (and Out of School Care) concerns both: – Benefit to the child/family – Benefit to the Economy It is early days…….cannot answer all questions (and here are some being asked) – Increase in childcare support - should mean that it will be less of a barrier for people to access work/study?; – Opportunities and estimated growth of childcare staff required / skills programmes to be set up to accommodate and provide pathways into child-care for unemployed people? – Opportunities for business growth / community business growth? 2 Introduction

3. Scotland is undergoing major change…… Flexibility and Choice: Children & Young People’s Act (Scotland) 2014 advocates increasing flexibility and choice to parents…. Incremental change / flexibility is a statutory requirement for local authorities (2014) and will require require significant reconfiguration of services; Reconfigure service towards the needs of parents defined in consultation with local populations of parents. Flexibility means moving away from what has been the default model of provision to providing models that support a wide range of parent needs including supporting parents who are employed, training or studying; Those models will be It is important to stress that the flexibility and choice is around patterns or models of provision. Plan for the future Stage 1 (est £100m) – in the first budget: provide 600 hours of childcare per year to around half of Scotland’s two year olds (those whose parents receive working tax credit or child tax credit) Stage 2 (est £700m) – by the end of the first Parliament (assumed to be 2020) : provide 1,140 hours of childcare a year to all three and four year olds and vulnerable two year olds (the Scottish Government has clarified that provision at this stage would be available to 48% of two year olds (the same group who would be eligible to the provision proposed in Stage 1) (Scottish Government, personal communication) Stage 3 (£1.2bn) – by the end of the second Parliament (assumed to be 2024): provide 1,140 hours of childcare a year to all children from one to school age Sources: Scottish Government http://www.scotland.gov.uk/Resource/0043/00439259.pdf and SPICe calculations. http://www.scotland.gov.uk/Resource/0043/00439259.pdf http://www.gov.scot/Publications/2014/08/2256/15 3

4. Early Learning and Childcare is important…….. The Benefits of high quality, comprehensive ELCC, when integrated into a wider social investment- oriented policy framework, are understood internationally to be: Improving child development; educational achievement Increasing equal opportunities and social mobility Combating child poverty Sustainability of welfare states (reduce expenses, increase income) Supporting parental (mothers’) employment Economic growth, competitiveness “Early environments play a large role in shaping later outcomes. Skill begets skill and learning begets more learning. Early advantages cumulate; so do early disadvantages. Later remediation of early deficits is costly, and often prohibitively so, though later investments are also necessary since investments across time are complementary. Evidence on the technology of skill formation shows the importance of early investment. At current levels of public support, Redirecting additional funds toward the early years, before the start of traditional schooling, is a sound investment in the productivity and safety of our society.” James Hechman, Nobel Laureate, University of Chicago, 2000 “Why Invest in Early Child Development (ECD): The reasons for investing in ECD are numerous and interrelated. A child’s ability to think, form relationships, and live up to his or her full potential is directly related to the synergistic effect of good health, good nutrition, and appropriate stimulation and interaction with others. A large body of research has proven the importance of early brain development and the need for good health and nutrition” The World Bank http://www.worldbank.org/en/topic/earlychildhooddevelopment “Investing in high-quality early childhood education and care (ECEC): OECD often tells countries that they should invest more in high quality early childhood education and care (ECEC). There are three broad rationales for putting public resources into high quality ECEC. First, it has significant social payoffs. Second, it supports parents and boosts female employment. Third, it is part of societies responsibility to educate children, to combat child poverty and to help children to overcome educational disadvantage.” OECD https://www.oecd.org/education/school/48980282.pdf 4

5. Scottish (National) Parental opinion Parental Opinion: The message is consistent - parents want affordability, flexibility and availability. Within this it is important to stress that parents generally want their childcare to be affordable but not necessarily free – they are willing to contribute within the bounds of affordability. A Central Contradiction: Parental views present a central contradiction for the ‘traditional’ Local Government pre-school model. The contradiction concerns both flexibility and affordability. The contradiction is that: -Flexible but expensive: Parents prefer the FLEXIBILITY the Independent Sector has to offer them BUT it is expensive (often too expensive) V’s -Free but inflexible: Parents do not (in general) prefer the Public Sector’s default offer (inflexible 3 hours 10 mins at fixed times per day) BUT it is free. EXAMPLE: National Survey of Scottish Parents: August 2014 to February 2015, received 2,592 responses. (73% used registered childcare services; 22% did not). Survey covered all forms of registered childcare including LA and Independent/Private Findings from parents who use childcare: -65% said they used childcare services to enable them to work, and 6% to enable them to study -37% reported that they also use childcare because they value its intrinsic benefits to their child (i.e., giving their child the opportunity to learn and socialise). -Only 62% of respondents said they were happy with the quality of local provision in their area -52% of respondents using childcare reported that their top priority for reform would be to make it more affordable. Findings from Parents Who Do Not Use Childcare -17% reported that their reasons for not using childcare are either because they choose to stay at home themselves (10%), or they prefer to use family or friends because this is in the best interests of their child (13%). -16% reported that they do not use childcare because it is too expensive. This proportion increases to 26% when you include the respondents who have more than one child. -42% ranked their top priority for reform to be “making it cheaper”. 5

6. LA - ELCC Development in Scotland – Current Models on a Spectrum ‘Traditional’ Local Government Delivery Model (Free but Inflexible) -Service available Term Time only -Parents receive 3 hours 10 mins per day 5 days per week (M-F) -Parental Choice limited to morning or afternoon sessions. -Service available to 3 and 4 year olds and vulnerable 2s. Fully Flexible – All Year Model (Flexible and Affordable) for ALL state provision -Service available all year 50 (or 52) weeks 8am to 6pm -Parents choose (with certain minimums) the setting, days and hours that meets their family needs -From the total hours taken they receive their state entitlement (currently 16 hours) free -Parents pay the balance at an affordable rate set by the Authority. -Service available for 1 to 4 year olds Extended opening hours (Trad model but open earlier/later and during holiday time) – a significant number of other LAs have tried this - suffers (in general) from poor utilisation – does not, in general, meet the need of flexibility and choice. Flexible Term Time Only, Flexible Full Days: Offering full day flexibility (8am to 6pm) within chosen days (parents can choose days and request specific hours during days). In ONLY some (not all) settings. Some limits apply. 16 hours free. Additional hours ONLY if available (tend to be for limited periods i.e. by term) and paid for by parents. Model can operate with individual nurseries bearing same capacity as traditional model (i.e. no displacement). Flexible Term Time Only Sessional Days: Sessional offering morning or afternoon, minimum 3 sessions per week (16 hours). Parents can choose which days (including full days comprising 2 sessions). Max 10 sessions possible in one week. Additional Sessions paid for by parent if available. 6

7. Area Wide Perspective – Supply & Demand Less affluent areas have much LESS partner and other independent/private capacity – increasing the number of children per all day place available More affluent areas have much MORE partner and other independent/private capacity – decreasing the number of children per all day place available

8. – Increase in childcare support - should mean that it will be less of a barrier for people to access work/study?; Yes - but implementation model will have an impact…. – Opportunities and estimated growth of childcare staff required / skills programmes to be set up to accommodate and provide pathways into child- care for unemployed people? Almost Certainly….but effort be will needed to realise the opportunities – Opportunities for business growth / community business growth? Yes……for ALL businesses workforce is more available Yes….. For childcare business - again dependent upon implementation model… 8 Re-Cap