Private nurseries, childminders and third-sector childcare providers across South Lanarkshire could receive a 5.2 per cent increase in council funding if councillors approve new proposals on June 30. Members of the council’s Education Resources Committee are due to consider a report recommending an increase to the sustainable hourly rate paid to providers delivering funded Early Learning and Childcare (ELC).
Proposed rate increases and backdating
If approved, the hourly rate 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.
Funding and cost implications
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 per cent uplift will be around £928,000. More than 2,500 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 1,140-hour entitlement.
Scottish Government guidance and consultation
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. Council officers say the proposal follows Scottish Government guidance issued earlier this year, which recommends councils apply a minimum 5.1 per cent uplift to sustainable rates to reflect higher staffing costs. The council has already consulted funded providers on the proposals through meetings held during April and May.
Future funding uncertainty
The report 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.
