A drive to expand free early learning and childcare (ELC) is under threat from Government-imposed conditions that are creating yawning pay gaps and driving nursery staff to leave for jobs in shops, MSPs have been warned.

Concerns are growing after the introduction of a landmark statutory duty that means councils must secure 1,140 annualised hours of funded ELC for all 3- and 4-year-olds, as well as eligible 2-year-olds. This is up from 600 hours previously.

The increase - which will have continuing costs of over £500 million a year - makes local authorities responsible for providing places and commissioning services from private and independent (PVI) operators.

Published figures indicate some signs of progress, with 111,574 children accessing funded ELC as of the end of January. Of these, 97 per cent were benefitting from more than 600 hours and 88% were obtaining the full entitlement of 1,140 hours.

However, there are intensifying fears of a staffing crisis due to council-run nurseries being able to offer far more generous salaries that are sucking in skilled PVI employees and threatening the viability of private sector settings. Early Years Scotland, an organisation whose goal is to ensure the best start for children between birth and the age of 5, has warned that inferior remuneration and conditions are causing some non-council staff to leave ELC altogether and take delivery or supermarket work.

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PVI providers also claim there is a serious shortfall - estimated to be around £1.40 an hour - between what they are paid by councils and what it costs to provide ELC places. Sector leaders have stressed current trends, on top of inflation and other expense increases, could lead to a wave of nursery closures.

Now the Scottish Government is under pressure to intervene after council umbrella body COSLA suggested public-private wage inequity had effectively been built into the existing ELC arrangement.

Under questioning from MSPs, Matthew Sweeney, COSLA’s policy manager for children and young people, said: “[The Scottish Government] investment, the level of funding they’ve given us, is to provide funding for private and partner providers via the real living wage. At the same time, funding for local authorities must be able to meet the nationally set, through collective bargaining, rates for our workforce.

“I’ve heard loud and clear… that the sector are really interested in this conversation of pay equity. That will take a significant amount of additional investment from the Scottish Government.”

HeraldScotland: Willie Rennie was highly critical of the current arrangement.Willie Rennie was highly critical of the current arrangement.

Mr Sweeney also insisted there was no statement about "equitable" funding in official documents. He added: "There’s always been an understanding of the clear parameters which the Scottish Government asks local authorities to provide when they were setting a funding [base] for private and voluntary provision.

“[The real living wage] was something that we were happy to support because… it’s important for us for provision to be as high quality as possible and the real living wage is a part of that.

"As I’ve mentioned already, there are other areas where they’ve gone further than the real living wage. Social care are now providing £10.50. At present, they’re still providing the real living wage for ELC and the funding that’s come to local authorities is not only being cut but it’s predicated on the idea that we are paying the real living wage to private and voluntary providers.”

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Willie Rennie, of the Scottish Liberal Democrats, criticised what he described as the "cutting out" of the private sector and said there was doubt over whether the ELC roll-out would provide the “flexibility” demanded by parents.

A Government spokeswoman said: “Private, third sector and childminding providers are a valued part of the successful delivery of our 1,140 hours ELC offer. Through the ELC expansion, we set out to support the childcare sector to become a real living wage sector and we are making good progress towards this.

“The funding agreement between the Scottish Government and COSLA allows local authorities to pay sustainable rates at a level that enables private and third sector services to pay at least the real living wage to staff delivering funded ELC.

"We have the highest funding rates in the UK, with rates paid to providers increasing by 48 per cent from 2017-2021 for three to five- year-olds.”