South Lanarkshire nurseries could see 5.2% funding boost

Members of South Lanarkshire Council’s Education Resources Committee are due to consider a report on June 30 recommending an increase to the sustainable hourly rate paid to providers delivering funded Early Learning and Childcare (ELC).

The proposed increase follows the Scottish Government’s commitment to raise the Real Living Wage for childcare workers in the private and third sectors to £13.45 per hour from April 2026.

If approved, the hourly rate paid for funded childcare places for three- to five-year-olds would rise from £6.57 to £6.91, while the rate for eligible two-year-olds would increase from £7.29 to £7.67. The additional 50p hourly lunch payment would remain unchanged.

The revised rates would be backdated to April 1, 2026, with providers expected to receive the increased payments later this summer following the completion of the council’s procurement process.

According to the report, South Lanarkshire receives £851,000 from the Scottish Government towards the increased costs, although the council estimates the overall cost of applying the 5.1% uplift will be around £928,000.

More than 2500 children currently receive funded early learning and childcare through private, voluntary and childminding providers in South Lanarkshire, accounting for around 31 per cent of all eligible children accessing the funding 1140-hour entitlement.

Council officers say the proposed increase follows Scottish Government guidance issued earlier this year, which recommends councils apply a minimum 5.1% uplift to sustainable rates to reflect higher staffing costs associated with the Real Living Wage increase.

The report notes that the council has already consulted funded providers on the proposals through a series of meetings held during April and May.

But, it also warns that while this year’s increase is supported by additional Scottish Government funding, similar annual increases cannot be guaranteed in future unless additional financial support continues to be provided.

If councillors approve the recommendation, all funded providers will be formally invited to accept the revised rates under the council’s existing procurement agreement, with the new rates taking effect from April 1, 2026.