Edinburgh private nurseries warn of closure risk as council agrees new funding rate

Private nurseries in Edinburgh could go out of business – leaving a shortfall in places for pre-school children – unless funding is increased, owners have warned.

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All three and four-year-olds, and some two-year-olds, are eligible for 1,140 hours of funded early learning and childcare every year, which is provided through a mix of the local authority’s own nurseries and private providers paid by the council.

But the National Day Nursery Association Edinburgh (NDNA), which represents over 80 private nurseries in the Capital, said the hourly rate for each child paid to nurseries in the private, voluntary and independent sector had only increased by 2.1 per cent over the past five years while the Retail Price Index had risen by 29 per cent.

And it said the council’s proposed increase from £5.42 to £6.03 per hour for 3-4 year-olds was not enough and should be at least £6.47.

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NDNA Edinburgh chair Sandy Towers told the council’s education committee: “Local authority nurseries are obviously receiving a much higher hourly rate.

"The consequence of this is that it enables Edinburgh Council to pay staff around 30 per cent more than the private sector can afford – and this is creating massive pressure on private nurseries in both recruiting and retaining staff.

Private nurseries in Edinburgh could close unless funding is increased, owners have warned

“It appears to us that in terms of staffing, the council is using public funds to create an anti-competition situation in their favour. We question if this is an appropriate use of public funds and whether it is in line with Government and local authority standards and policies.”

A report by officials said the hourly rate review took into account a price survey with private nurseries, as well as inflation, the real living wage and the findings of Scotland-wide research into costs for nurseries.

Tory councillor Christopher Cowdy asked if there was a real risk that without better funding, private, voluntary and independent nurseries would not be able to continue operating and there would be a huge shortfall in spaces for children.

Former NDNA Edinburgh chair Anthony Duriez, who runs a nursery in the city, replied: “Yes, absolutely. I think there’s already seven nurseries in Edinburgh that have closed down this year.

The city council's education committee approved new hourly rates for private nurseries.

"If it carries on at the levels that it is where we’re getting a rate which is fixed, which is not sustainable for the current year, which is then fixed for three years, it’s inevitable that more centres will disappear.”

The committee agreed to proceed with the increase as recommended by officials but education convener Joan Griffiths accepted a Conservative call to review the rate annually rather than every three years as planned.

In addition, councillors requested “full detailed reports” to show how the budget is allocated between the different sectors.