Council-run nurseries could be put under significant strain to restructure and absorb new costs if a major election pledge requires them to expand childcare to children younger than two.
In the SNP’s 2026 election manifesto, the party pledged to expand funded childcare to include every child from 9 months through the end of primary school, with year-round coverage. To help with this, families would receive between £1,400 and £11,000 per year, depending on their needs. The manifesto promises to deliver this by the end of the parliament, and earlier statements from party leadership suggested it could cost £500 million annually.
When first asked about delivery mechanics after the expansion was promised at the party conference in March, the SNP described the amount of need-based support that would be available and indicated more details would be set out in the manifesto.
The manifesto did not provide any further details, however. A closer analysis of the spread of childcare offerings suggests that some nurseries – in particular council-run settings – could be disproportionately impacted by any increase in under-two care.
Currently, the Scottish Government’s childcare policy provides 1,140 hours of funded childcare per year for children aged 3-5, as well as some 2-year-olds, according to need. This equates to roughly 22 hours a week if used all year or 30 hours a week if used only during school term time.
Parents are meant to be able to access these hours at any nursery setting which meets the National Standard and, if a private setting, has entered a contract with their local authority. This illustrates the policy’s “funding follows the child” ethos, which is meant to allow for parental choice and limit restrictions on accessing funded hours.
This element of the current model is under increasing pressure, with local authorities beginning to restrict funding for families living outside the council area.
It remains unclear whether “funding follows the child” would create any requirement for local authorities to provide care for children beginning at nine months old under the SNP’s proposed expansion. However, that answer could be significant given the current landscape and the cost implications of caring for babies.
Public sector could be transformed by the addition of under-2 care
According to the latest figures from the Care Inspectorate, most care for children under 2 years old is provided in the private sector. As of 2024, 4.6% of Scotland’s 1,604 public nurseries offered care for 6–12-month-olds and 5% provided care for one-year-olds, and 37.6% provided care for two-year-olds.
In contrast, 82.5% of the 737 private settings provided care for 6-12-month-olds and 83.4% provided care for one-year-olds.
Even at age two, which is currently old enough for publicly funded hours under the current system, the options are predominantly in the private sector: in 2024, 37.6% of public nurseries provided care for two-year-olds compared to 92.5% of private nurseries.
Although it is unlikely that every public nursery would be required to begin accepting nine-month-olds under any iteration of the planned expansion, adding under-two care to its offerings has the potential to significantly alter an individual nursery’s business model and affect its affordability. This could hit public nurseries – which currently provide the majority of funded hours – especially hard.
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According to statistics from the National Day Nurseries Association (NDNA), 31.6% of parents used private, voluntary or independent (PVI) providers or childminders to access their funded entitlement – suggesting that the majority of families are accessing funded hours in the public sector.
If the trend holds following the expansion, and even a fraction of these families begin to want public options for their under-twos, sources in the sector say it could leave councils taking on significant infrastructure and staffing expenses.
Why babies cost more
Staffing ratios in childcare settings are set by government regulations and vary by the age of the children in care.
The ratio for children up to age 2 is 1:3 (one adult for every three children). For 2–3-year-olds, the ratio is 1:5, and for 3–5-year-olds, the ratio is 1:8.
Because these ratios are strictly mandated, and not least because of the nature of nursery care, staff levels must always be maintained in person. This means that, unlike most workplaces, staff cannot simply cover for absent colleagues.
According to a private nursery operator, a setting open 10 hours, from 8 am to 6 pm, for 50 weeks a year will require roughly the equivalent of 1.4 full-time staff members to meet each ratio. This is because of the need to bridge the gap between contracted hours (which typically involve an eight-hour workday), statutory holidays, and approximately two hours per week of training or administrative time.
When staffing alone is factored in, without accounting for management or capital costs, the cost per hour for under-twos can be nearly three times that of the 3-5 age group.
As the operator explained, babies are essentially loss-leaders. It is not uncommon to only break even on a baby's nursery attendance when they are nearly 3 years old. This creates an exceptionally fragile model in which the fees for older children effectively cross-subsidise those under 2.
These costs are a constant juggling act for individual settings. In such a labour-intensive sector, there are limited options for making savings: staff costs are the dominant expense, but staffing levels are mandated. If nurseries, public or private, do not already have under-two care baked into their operating models, the change to accommodate younger children will not happen overnight.
New staff will need to be hired at the very least, and in many cases, they will require different experience.
Public nurseries looking to make the leap to accommodate the proposed SNP expansion will also face another cost challenge: 52-week wraparound coverage.
According to Care Inspectorate data, 67.6% of public nurseries do not operate during the school holidays. Shifting to the 52-week model, as described in the SNP proposal, would reduce the holiday hours offset, which currently supports public nurseries’ economic sustainability.
Public nurseries already face cost pressures
All of these factors are in addition to generally higher salary expenses in the public sector. Career guidance data from Planit show that starting salaries at public nurseries can be £3,000- £ 5,000 higher than at PVI settings.
According to a 2023 report on staff movement by the Scottish Social Services Council, 30% of managers who moved from a PVI to a public sector setting took a lower-qualified practitioner position specifically for better pay and conditions. These rates make public nurseries more competitive in attracting workers, but also more expensive to operate – even without including care for children under 2.
Recent controversy has illustrated the difficulties that public nurseries are already facing. Both Edinburgh City and West Lothian Councils have decided to cut all public funding for cross-boundary placements, meaning children who attend a private nursery in one council but live in a neighbouring one. The decision only applies to PVI settings, and out-of-area families are still allowed to use their funding at a council-run nursery.
Representatives of the private sector have cried foul, arguing that this interferes with the market, and First Minister John Swinney previously spoke out about the practice violating the spirit of parent choice and the funding follows the child principle.
However, analysis of the legal requirements shows that councils have no statutory obligation to fund cross-boundary placements. West Lothian officials have previously cited the "unfettered choice" baked into the principle of funding follows the child has directly led to council nurseries being underutilised and creating significant cost pressures on local authorities.
If delivered, the SNP’s latest promise on childcare would represent a significant expansion in both the offering to families and the burden placed on settings. In its recent sector manifesto, the NDNA has called for any childcare expansion, whether to include younger children or more hours, to be fully costed before implementation.
That is cost already expected to be high – John Swinney suggested a £500 million expansion when speaking at the SNP conference earlier this year – but the real implications for local authorities taking on new under-two care at their nurseries could push the bill even higher.
Tim McLachlan, Chief Executive of NDNA Scotland, said that there remain questions about what the SNP's £500m plan will deliver and how.
“The existing policy of 1,140 funded hours is currently underfunded, faces a workforce crisis and is not delivering on the promise of parental choice because funding is not following children to the frontline provider. We must see the next Scottish Government fix the holes in the current approach before making expansive promises to children and families.
“The easiest way to ensure funding truly follows the child is by putting it in the hands of parents through one online account, which allows them to secure the childcare they need from the provider they choose.”
It is still unclear how exactly the SNP envisions its childcare expansion operating. When asked for specific details on whether local authorities would be expected to begin offering under-two care at some or all of their settings or whether the funding model would differ from the current 1,140 delivery, a party spokesperson repeated a statement given prior to the publication of the manifesto.
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