Why Some Councils Restrict Funded Provider Choice

Scotland's "Funding Follows the Child" model is built on a simple promise: your 1,140 funded hours should follow your child to whichever setting you choose, provided that setting meets the National Standard. In policy documents it reads as a fully portable, parent-led system. In practice it is messier. Some councils have long lists of partner providers; others have short ones. Some private nurseries take any funded child; others refuse outright. Some charge for "consumables" in ways that look suspiciously like top-up fees by another name.

This guide explains why the system works the way it does on the ground, what the Scottish Government's official position is on the contentious issues, and what you can do if your preferred setting is not a funded partner.

How partner-provider lists work

To deliver funded hours, a private or third-sector setting must:

1. Be registered with the Care Inspectorate
2. Meet the National Standard for Early Learning and Childcare Providers
3. Sign a funded-provider agreement with the council where the child lives

That agreement sets out the hourly rate the council will pay, the planning and reporting requirements, the inspection regime, and the terms around top-up fees and consumables. Each council negotiates its own agreement, although the National Standard itself is set centrally.

The cost-gap problem

The single biggest reason for restricted provider choice is the gap between what councils pay providers per funded hour and what those providers charge in the private market.

Typical figures across Scotland:

These are approximate ranges; specific figures vary by council and year. The gap means that for many private settings, a funded child generates significantly less revenue per hour than a private-paying child in the same room. The arithmetic gets harder if the setting also has higher overhead costs in city centres.

This is why some settings:

• Refuse to take funded children altogether
• Restrict funded sessions to specific (often less popular) time slots
• Cap the number of funded children they accept per session
• Sign up as funded partners in name only and prioritise private-paying families when offering places

What the Scottish Government says about top-up fees

The Scottish Government's position is unambiguous: top-up fees for the funded hours themselves are not permitted. A partner provider cannot charge parents to "top up" what the council pays. They cannot make accepting a place conditional on buying additional paid hours.

What providers can charge for is genuinely optional extras that fall outside the funded entitlement. The most common examples are:

• Meals beyond what the funded hours cover (where meals are not part of the entitlement)
• Specific outings, school visits or activities
• Consumables such as nappies and wipes
• Branded uniforms

These charges must be optional and not a condition of attending the funded hours. In practice, the line between "optional" and "expected" is often blurred. Some settings present a "consumables list" that ends up costing £20-40 per week — money that parents say feels like a top-up fee even if it is technically itemised differently.

If you feel a provider is charging in a way that breaches the National Standard, you can raise it with your council's Early Years team or with the Care Inspectorate.

Red flags that a charge is really a top-up

The label on an invoice matters less than how the charge behaves. Signs that an "optional extra" is functioning as a top-up fee:

• You cannot opt out. If declining the consumables package or the meals plan is not genuinely available — or triggers hints that the place might not be — the charge is conditional on attendance.
• It scales with funded hours. A per-session or per-day "resource charge" applied to every funded session is pricing the funded hours, not an extra.
• It appears only for funded children. Compare notes with private-paying parents at the same setting; a fee that funded families pay and private families do not is a strong signal.
• Funded sessions are only bookable with paid wraparound. Requiring you to buy additional paid hours as a condition of accessing the funded ones breaches the policy just as clearly as a cash top-up.
• It is described as covering "the shortfall". Any charge justified by the gap between the council rate and the private rate is, by definition, a top-up.

None of these automatically means bad faith — some settings genuinely have not thought the structure through — but each is worth querying in writing before you sign.

How to read the funded-provider agreement before you sign

Every partner provider gives you an agreement or terms document at placement. Ten minutes with it saves months of invoice disputes. Check:

1. The fee schedule, line by line. Every recurring charge should be named, priced and marked optional or mandatory.
2. Which sessions carry the funded hours — and whether they are the sessions you actually need, or the quiet slots the setting struggles to fill.
3. The notice period for ending or changing the arrangement, in both directions.
4. What happens if the setting leaves the funded scheme — you want notice obligations spelled out, not discovered mid-year.
5. Holiday and closure policy — whether funded hours lost to closures are made up (usually they are not).

Challenging a charge, step by step

If you are already in a placement and believe a charge breaches the rules:

1. Ask the provider to itemise the charge in writing and confirm what happens if you decline it. Keep the reply.
2. Check it against your signed agreement and the council's published funded-provider terms.
3. Raise it with the council's Early Years team, attaching the correspondence. Councils police their own funded-provider agreements and can require changes — or, ultimately, remove a provider from the framework.
4. Escalate to the Care Inspectorate if the council does not act, particularly where the charge is a condition of attendance.

Be realistic about the dynamics: enforcement is patchy, and many parents tolerate grey-area charges to protect a place they otherwise like. But a polite written query, copied to the council, resolves a surprising share of cases without conflict — settings depend on their council agreements and rarely want a paper trail of complaints.

Why some councils have shorter lists than others

Several factors influence how many partner providers a council has:

• The hourly rate the council pays — higher rates attract more providers
• The administrative burden — heavy planning, reporting and audit requirements deter smaller settings
• The local market — areas with many private nurseries (Edinburgh, Glasgow) tend to have more partner providers in absolute terms
• Local council culture — some councils actively recruit partners; others run a more closed, council-nursery-led model
• Capacity in council provision — councils with plenty of their own places have less incentive to expand partner lists

This is why a parent in Edinburgh may have 80+ partner providers to choose from while a parent in a rural authority has fewer than 10.

Finding your council's partner provider list

Every council in Scotland publishes its list, usually under "Early learning and childcare" or "Funded childcare partners." The list typically shows the setting name, address, age range, delivery model (term-time / stretched / both) and Care Inspectorate grade. Cross-reference with the Care Inspectorate register to check current inspection grades and registration status.

If your preferred nursery is not a partner

You have three realistic options:

1. Ask the setting if they will apply to become a partner. Some smaller settings simply have not done it. A friendly request from a parent can sometimes prompt action.
2. Choose a different setting that is a partner. This may mean compromising on location or specific features, but secures your 1,140 funded hours.
3. Pay privately at your preferred setting and use the funded hours elsewhere. A split placement allows you to use some funded hours at a partner provider while paying privately for sessions at your preferred non-partner setting.

There is no fourth option that lets you use funded money at a non-partner setting. The funding only flows through providers that have signed the council agreement.

What this means for your application strategy

Understanding the restrictions changes how you should approach the application itself:

• Start from the partner list, not from the nursery you walk past. Shortlisting settings and then discovering they are not funded partners wastes months. Check the list first, then visit.
• Ask the awkward questions on the phone, early. "Do you take funded children in the sessions I need, and what would I actually pay per month?" gets you further than a glossy open day. A setting that dodges the second half of that question is telling you something.
• Treat council nurseries as the zero-charge benchmark. They carry no top-ups and no grey areas; the trade-off is usually term-time-only patterns and waiting lists. Our comparison of council versus private nurseries weighs the two routes properly.
• Do not overlook childminders. Funded childminders sit on the same partner lists, often with better availability and simpler charging than nurseries.
• Factor charges into the real cost comparison. A partner nursery whose consumables list runs to £20-40 per week is materially more expensive over a year than one that charges nothing — compare annual totals, not headline "funded" status.

The system rewards parents who do this legwork before applying. The full application process, deadlines included, is covered in our guide to applying for funded hours, and the wider entitlement in our 1,140-hours overview.