Flagship childcare policy costs soar

An extra £20 million would be needed to fund the policy over the next two years. Picture: TSPL

Mike Russell told MSPs that an extra £20 million would be needed to fund the policy over the next two years, increasing the cost from £41 million to £61m.

He also warned that the final cost could be higher still, saying that he was “absolutely not ruling out there being a different figure at the end of the day”.

Last night Cosla, the umbrella group of local authorities whose job it will be to begin implementing the policy in August, said even the £61m figure was “somewhat optimistic”.

Cosla’s own calculations put the cost of extending 600 hours of nursery care to more than a quarter of vulnerable two-year-olds closer to £114m. The organisation has raised “significant concerns” about the funding allocated by the government.

Mr Russell disclosed the increased cost of the childcare policy yesterday during questioning by MSPs on Holyrood’s finance committee. He said the new figure of £61m was “robust and well-founded”. Acknowledging that there was a significant difference between the government’s cost calculations and those of Cosla, Mr Russell said: “The Cosla figure is very substantially higher but we have moved on from early discussions of a lower figure.

“We will continue to discuss it but we are confident in our  robust calculation. Of course there will be flexibility but I think these calculations are very robust indeed.”

Asked by SNP MSP John Mason if the £61m was a starting point for negotiations with Cosla, Mr Russell replied: “It’s not the starting point but we are in the process of negotiation.”

Mr Mason said: “But you have already moved on from a lower figure?”

Mr Russell replied: “Yes, I think we were at £41m some time ago. I am absolutely not ruling out there being a different figure at the end of the day but I am saying we believe the £61m is well-founded.”

First Minister Alex Salmond unveiled details of a family support package of extra childcare and free school meals in January after the Scottish Government was criticised for failing to implement “transformational” childcare plans outlined in its white paper until after the referendum.

He pledged to extend childcare to around 15,400 of the most vulnerable two-year-olds in Scotland, whose parents were out of work or on welfare benefits, at an estimated cost of £41m.

Last night Mr Russell’s confirmation that an extra £20m had been allocated to fund the policy prompted calls for a full explanation. Labour MSP Kezia Dugdale said: “It is outrageous that government is conducted in this way. They still can’t tell us how it is going to be funded and have no idea about an actual cost.

“Instead, councils are now going to be left to pick up the pieces and somehow try to fund this because of the SNP’s ineptitude. Parents and children deserve so much better than this.”

Gavin Brown, the Scottish Conservatives’ finance spokesman, said the government was in danger of failing to deliver on its pledge.

“The Scottish Govermnent has clearly not thought through how this childcare policy will be implemented in August. With just eight weeks until this key policy is due to be implemented, it is staggering that they cannot provide a guarantee the buildings and facilities will be ready.”

At yesterday’s committee meeting, Mr Brown asked Mr Russell if the new figure of £61m was a “robust position for discussion in a negotiation”.

Mr Russell said: “I think it’s a well worked out set of calculations and what I believe is the right approach to this.”

Last night a Cosla spokesman said: “We have a number of difficulties with this.

“The first being that Mr Russell has form for talking about a negotiation with councils whilst not delivering on it, a perfect example being his recent stance on rural schools.

“We have learned from previous dealings with him that his actions do not always match his words.”