Problems resulting in a £3.3 million black hole in early learning and childcare budget were “seeded” years ago, according to a Moray councillor.
Moray Council’s internal auditors were asked to look into the shortfall and have called for a zero-based budgeting exercise to be carried out as a matter of urgency.
Officers will start from scratch to verify and justify all spending used to expand the service.
Higher than anticipated demand for free nursery places – three and four-year-olds as well as eligible two-year-olds can get a placement of up to 1,140 hours a year – has resulted in the need for more staff and extra lunches.
Along with increasing costs associated with children requiring additional support and higher hourly payments for external childcare providers, that total has reached £1.9m.
Combined with a £1.4m drop in the Scottish Government grant for Moray following changes to the funding formula, it adds up to a £3.3m shortfall.
In their recommendations the auditors called for the early learning and childcare manager and the chief education officer to undergo financial management training, a review of catering costs and for the number of children registered for nursery placements to be counted so costs can be calculated.
The issue was discussed at a meeting of the audit and scrutiny committee today.
Conservative councillor for Elgin North Frank Brown said: “The early learning and childcare manager has been in post for a year, but I think the problems and difficulties that are evident here were seeded long before she was in post.
“The eye was not on the ball to begin with, let alone taken off it.”
Auditors also recommended a review of staffing and recruitment at council-run nurseries should be carried out, with the findings of an ongoing appraisal into additional support needs used to work out finances.
‘Eye was not on the ball’
Benchmarking costs of delivering the service against other local authorities should be done to highlight any variances.
Audit and risk manager Dafydd Lewis said: “It is a significant overspend and it’s of concern, but I understand management are looking at changes to the service.
“It’s pleasing all the recommendations have been accepted by the service.”
Independent councillor for Heldon and Laich John Cowe recalled an agreement by the council that any overspend in the expansion of the service should be met by the Scottish Government.
He said: “It appears Moray is a victim of its own success with early learning and child care.”
A further report on the issue will go to a meeting of the full Moray Council on April 6.
