As the last of the decorations make their way back into the cupboard, the final few selection box chocolates are scoffed and it’s back to ironing uniforms on a Sunday night, thoughts turn to 2025 and what the year ahead might bring. The new year always brings the opportunity for resolutions – we promise ourselves we’ll do more of one thing and less of another in an attempt to make the changes we feel we need in our lives.

But 6 months into a new Labour Government at Westminster, have the changes that the country was promised with the dawn of a change in leadership actually come to fruition, bringing new hope and opportunities for children and families? There are already real concerns within the early learning and childcare (ELC) sector about the announcement made by the Chancellor around changes to National Insurance (NI) contributions and the impact this will have. There is a real possibility that settings will have no choice but to reduce staffing levels, which means they may have to reduce their intake to keep in line with ratios, in order to balance the books.

This has the potential to create particularly acute ELC access issues for families, particularly in more rural parts of the country, where there are fewer options available. Providers are also reluctant to recoup the shortfall by charging additional fees from parents, for fear of discouraging them from continuing to attend their setting, or simply being unable to afford to do so given the current financial climate. This further diminishes the PVI setting’s ability to run effectively. It is a vicious circle which does not support the positive intentions behind the Scottish Government’s policy to expand the hours of ELC 3-5 and eligible 2-year-old children’s entitlement.

The additional reduction of the threshold when payments for NI contributions commence will also impact negatively on many settings due to the number of lower paid workers in the sector, as well as the prevalence of part-time workers. Similarly, employers who pay staff above the Real Living Wage – which is a minimum requirement to provide funded ELC – will be limited in how much they are able to continue to support this. It is also important to be aware that payment of the Real Living Wage only applies to staff working with funded children, meaning that staff working with the under 2s do not have to be paid at this level.

I’m not so naïve to think that budgetary decisions are made lightly or easily – whether we like it or not, the shadow of Covid continues to loom large, and the resulting cost of living crisis has to mean that difficult choices are made. The decision to raise NI contributions was undoubtedly well-intentioned in terms of raising revenue for state pensions and other benefits.

The reality is, however, that the real-term impact of this increase will have a hugely detrimental effect on the early learning and childcare sector which, let’s face it, is already under immense pressure. From continued issues around the sustainability of the funded rate per child paid to PVI colleagues, to the ever-present concerns around staff recruitment/retention, not to mention a significant increase in the number of children presenting with additional support needs, with little training and resource available to effectively support all children, we are truly at a tipping point. This additional financial burden has the potential to push providers over the edge, which ultimately precludes our youngest children from being afforded the best start in life that they deserve.

Early Years Scotland has written to the Chancellor of the Exchequer to raise the concerns that members have noted around the NI increase as well as supporting the joint letter from First Minister John Swinney and COSLA President Shona Morrison just hope that, in the spirit of change, this will fall on listening ears and the impact on our youngest children is considered and mitigated as a result.