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Highland Council accused of ‘gaslighting’ nurseries with £5.43 per hour pay freeze

Stramash Outdoor Nurseries said Highland Council is spending early learning money elsewhere.
Stramash Outdoor Nurseries said Highland Council is spending early learning money elsewhere.

Highland nurseries have written to councillors saying they can’t afford to run services on £5.43 per hour.

One provider – Stramash Outdoor Nurseries – today told the P&J that Highland Council is “gaslighting” the sector by suggesting it can’t afford a rates rise.

CEO Kenny Forsyth says the Scottish Government has provided the funding for Early Learning and Childcare (ELC) but Highland Council has spent it elsewhere.

And he warns that ELCs could be forced to make “awful decisions” if the council doesn’t urgently review its rates.

Ipsos Mori figures reveal gulf in pay

Mr Forsyth was one of several Highland ELCs lobbying councillors to intervene ahead of a crunch meeting yesterday. Members said they received letters from providers in Inverness, Dingwall and Tain.

A finance paper for full Highland Council proposed that ELC rates should be frozen at the current level of £5.43. This rate includes a 12p uplift agreed in November last year.

However, that rate was previously considered an interim measure. Highland Council had committed to a further nursery rates review, with a new rate likely to be introduced in August 2022.

Now, the council says it can’t afford to pay any more. The finance paper asked members to agree to freeze the rate, with any review taking account of the financial crisis. Finance bosses blamed a potential £40 million budget gap for the funding issue.

Despite attempts from opposition councillors to buy some time, the proposals were voted through yesterday.

Mr Forsyth slammed the decision. “Highland Council described this as a rate freeze but £5.43 was never a sustainable rate for Highland nurseries. It was always intended as a placeholder. These are cuts.”

Ipsos Mori data suggests ELCs need £7.25 per hour to pay real living wage.

Mr Forsyth references Ipsos Mori research commissioned by the Scottish Government to help local authorities set ELC rates. This research concluded that councils need to pay £7.25 per hour to enable providers to pay the Real Living Wage – an obligation both the government and councils expect providers to deliver.

“The outcome is that the Highland Council was underfunding ELCs by 24% through 2021/22 and will be 36% under from August this year,” says Mr Forsyth. “By removing the word ‘interim’ but retaining the interim figure, the council is also attempting to abandon £2.457 million in historic liability. Next year, it will take £3.467 million from pre-school children’s education.”

Education chairman says council can’t afford ELC rate rise

Education chairman John Finlayson yesterday said that “context is everything”.

“No-one more than I would like to give more resource and funding to all our services in ELC settings, but there is a reality. The council is faced with a £9.6m overspend in the current year and a possible £41m gap in 23/24.

“The reality is ELC partner centres did receive an interim uplift last year. What we can’t do at this time is agree to further uplifts in light of the current financial crisis.”

Mr Finlayson emphasised the council’s huge appreciation for its partner ELC providers. But he added:

“Life is tough for everyone and it would be foolish to make commitments we can’t afford.”

Conservative councillor Helen Crawford called for “full and transparent information” about Scottish Government funding for ELC and how the council has spent it. Ms Crawford worked with the Liberal Democrat opposition on an amendment, which sought to delay a decision on ELC rates until next month.

Councillor Helen Crawford says Highland Council isn’t being transparent about education budgets.

However, the amendment also included a range of changes to the council’s cost of living support plans. The discussion descended into angry debate about how best to support communities whilst saving money, and the amendment lost the vote.

Speaking today, Ms Crawford said she felt councillors were expected to “wave this through without a full presentation of the facts and the larger picture”.

“These are fantastic businesses that we rely on to allow parents to go into work, and they’re left to lobby us literally the night before the meeting. It’s very concerning to hear the reality from a third sector partner and not from council itself. The rates freeze is putting the whole sector in a perilous state.”

‘Gaslighting and ghosting’

Speaking today, Mr Forsyth said the budget issue is a red herring.

“Mr Finlayson worked with me to establish an ELC partners discussion forum a year and a half ago. I’ll use a couple of modern terms to describe what happened next.

“Gaslighting is when one body – in this case the council – required us to believe something that just wasn’t real. What they wanted us to believe is that there’s no money, and it wasn’t true. The government have given the money but they took it and spent it elsewhere. That’s gaslighting.

“Then from May of this year – when the Ipsos Mori data appeared – they cancelled the forum and have been silent ever since. There’s a modern word for that too, and it’s ghosting.”

Nursery rates could see closures in Highland

The implications for nurseries like Stramash could be devastating. The ELC sector is already fragile.

Last week, the P&J reported that rural and island families face a battle to secure nursery places. Funding shortages is one of the main issues according to a Scottish Government report.

Mr Forsyth says there’s now a 20-30% difference in pay between Highland Council ELC staff and those at its partner providers. This leads to problems with recruitment and retention.

“We don’t have a staff problem,” he clarified. “We have good quality, nurturing, talented and caring people. What we have is a funding problem.

“There are things we can do, yes, but they’re all awful.”

Stramash says its nurseries aren’t sustainable on current funding rates.

Mr Forsyth says providers could approach the Scottish Government for direct funding, but questions why an SNP-led council would refuse to implement its own government’s flagship childcare policies.

“If the Highland Council feels entitled enough to walk away from national government policy we could end up having to end free childcare by charging parents the top-up,” he said. However, he emphasised that this would be “disastrous” and avoided at all costs.

Some nurseries, he said, could have no choice but to close their doors.

“All these options are awful, and a last resort,” he said. “We will fight tooth and nail to keep open. We are part of society, part of communities.”

What happens next?

As agreed at Highland Council, the ELC partner rate is effectively frozen at £5.43 per hour, and a review into the rate will continue. This will take account of the new context of the financial crisis and the teachers’ pay dispute.

Highland Council’s report emphasises that the nursery rate doesn’t only take account of what ELCs require, but what councils can afford.

According to Scottish Government guidance, it should ‘be sustainable and affordable by the local authority’. At the same time, it needs to: support the delivery of high quality ELC, reflect the cost of delivery, allow for investment in the setting and enable payment of the Real Living Wage.

A Highland Council spokesperson said: “Senior council officers are arranging to meet with early learning providers in the coming weeks and a report on early learning will be presented to the next meeting of the Highland Council in October.”

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