Moray Council yesterday gave ground in a long-running dispute over how it funds independent nurseries.
At a special meeting of the education committee, councillors pushed through a 5% rates increase, despite officers’ warnings it may not be affordable.
The council had proposed to freeze nursery funding at the current level, sparking a fierce campaign from 35 Moray nurseries.
They said the Real Living Wage had increased by 10%, and they need more money to make ends meet.
In the end, councillors agreed to 5% – though the decision still has to be ratified by the full council.
Speaking this morning, Moray campaigners said: “We’ve taken a step forward, but we still have a journey to go on.”
‘Parents are clearly concerned’
The core issue is the gap between the hourly rate that nurseries have to pay their staff, and the hourly rate they get from Moray Council.
It’s national policy that all Early Learning and Childcare (ELC) centres pay the Real Living Wage – that’s £9.90 per hour.
However, Moray Council pays its partner nurseries £6.30 per hour. At the same time, its own staff earn over £14 an hour.
Independent nurseries say it’s an unfair system. They showed the P&J their contract with Moray Council, which states that ELC rates will be “revised” annually.
However, a report to education committee yesterday substituted “revised” for “reviewed”.
The report states: “The council pays a sustainable rate per child, per hour and acknowledges that inflationary and Real Living Wage increases will be reviewed on an annual basis.”
This year, the Real Living Wage increased by 10%, while inflation has now hit 3.5%.
Speaking at the education meeting, councillor Sandy Keith observed that Moray Council has not reviewed the ELC rate since March 2021. Some 20 months later – and with costs soaring – the council was proposing a freeze.
“Parents are clearly concerned and want the best for their children,” he said. “We have a chance to do something today.”
Moray finance bosses say they can’t afford 5% rise
However, education and finance bosses issued a stark warning about whether the council can afford to meet the nurseries’ demands.
They say Moray Council’s ELC rates are already the third highest in Scotland. In 2021, the council provided an 8% uplift, taking the hourly rate to the current level of £6.30 for 3-5 year-olds and £7.57 for two-year-olds.
Chief finance officer Lorraine Paisey told the committee: “There is no budget to deliver the proposed raise”. Deputy chief executive Denise Whitworth said the education service already faces a £2 million budget pressure.
In response, councillors pointed out that Moray Council relies on the independent sector for two-thirds of its early learning services. If independent nurseries go bust, the council can’t deliver.
Council leader Kathleen Robertson said that’s the biggest risk. She proposed a 5% rates increase, backdated to April 2022. This matches the 5% increase paid to council ELC staff.
Several members spoke in support of independent ELCs, and some wanted to go further.
Councillor Ben Williams said he’d ideally offer 10% to match the increase in the Real Living Wage – but he recognised councillors would not support this.
“We’re left with a binary choice,” he said. “Do nothing and allow children in Moray to feel the consequences or do what we can to provide people with a wage that works.”
The 5% rise – if agreed by full council – will make Moray the highest-paying council in Scotland.
Independent nurseries could close without fair funding
Speaking this morning, Kenny Forsyth, CEO of Stramash Outdoor Nurseries, welcomed the decision.
“We’re extremely grateful for the efforts of councillors in the teeth of officers’ opposition,” he said. “We have taken a step forward, but we still have a long journey to go on.
“The Real Living Wage is up by 10%, so 5% only takes us halfway there.”
Stramash runs nurseries in Elgin, Inverness, Fort William and Oban. Kenny recently warned that many independent providers could be forced to shut up shop if they don’t receive a better funding deal from councils.
Earlier this month, Lauren Hayward from Torridon Education Group laid out the stark reality. She said independent nurseries are haemorrhaging staff to better-paid council positions. Others stay, but work extra jobs to make ends meet.
With the nurseries spending the vast majority of their funding on wage rises, they have little money left to invest. Instead, they rely on the good will of donors and fundraisers.
“We rely on people doing things in their own time,” says Lauren. “Because of the kind of person you attract into this role, people want to do the best that they can for these children. But it’s an additional pressure.
“I’m drained from fighting this.”
Taking the battle national
It looks like that fight is about to move to a bigger stage.
Highland Council recently faced a similar campaign from its own nurseries, and agreed to a temporary funding uplift. Moray Council followed suit yesterday.
Now, local politicians are picking up on campaigners’ calls to overhaul the whole sector’s funding.
“The patch work of rates nationally is a mess,” says Kenny. “The Scottish Government knows this and Cosla is running a review.”
Earlier this year, the Scottish Government commissioned Ipsos Mori to write a report recommending a sustainable rate for nurseries. Mr Forsyth says councils have largely ignored their recommended rate of £7.43 and are “choosing to keep the money for themselves”.
“Ultimately the whole problem has to be solved at a national level,” he says. “The council can’t be both banker and competitor.”
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