With the earliest years of a child’s life being so fundamental to their lifelong development, public investment in the early years can reap huge benefits in terms of supporting every child to reach their full potential. 

At Nesta, we wanted to understand where resources are being prioritised in Scotland and how spending on Scotland’s youngest citizens has changed over time. We commissioned Alma Economics to carry out a review of public spending on children aged zero to four in Scotland between 2010 and 2023.

We focused on spending per child rather than total expenditure. This accounts for demographic shifts - like a falling birth rate - to show more clearly how much support each individual child actually receives. All monetary amounts are adjusted for inflation and presented in 2025 prices.

Here are our five key takeaways from the report.

The total level of early years spending per child aged between zero-to-four stayed relatively steady between 2010-2011 to 2019-2020, and then increased from around £7,200 to almost £9,700 in 2023-2024. This increase has been driven almost entirely by spending on early learning and childcare (ELC), with spending on ELC per child nearly tripling: from £1,600 in 2010-2011 to £4,670 in 2023-2024.

There is now double the spending per child for two-to-four-year-olds compared to zero-to-one-year-olds, driven by increased investment in ELC. Per-child spending on two-to-four-year-olds has increased from approximately £8,000 in 2010-2011 to £12,000 in 2022-2023, while spending for zero-to-one-year-olds has remained constant at approximately £6,000 in both 2010-2011 and 2022-2023. 

The first year of a child’s life is a crucial time for development, and children under one in Scotland are more likely to be living in poverty than older children. The introduction of ELC means that proportionally more funding is directed toward older children and spread more universally across the population. Reevaluating the distribution of funding would allow more resources to be targeted at the earliest age groups and the most vulnerable families.

Overall, identified spending on healthcare has remained steady at around 13% of overall identified spend. However, per-child spending has risen by around 41% - from £910 to £1,290 - between 2010-2011 and 2023-2024, driven by increases in patient, outpatient and community spend.

There have also been significant identifiable increases in areas like A&E, where per-child spending has more than doubled since 2010-2011, and mental health which has more than doubled to almost £20 per child. The bulk of these increases have happened since 2017. 

It’s not clear exactly what is driving these changes. Similar patterns around A&E have been seen in England and Wales. The increase in mental health spending could reflect policy decisions from the Scottish Government to increase investment in infant mental health services as much as it reflects an increase in demand. Further exploration of drivers of the change in early years healthcare spending would be beneficial in both understanding current spend, and considering where future spend can add the most value to children’s lives.

Despite a significant shift in Scottish Government policy toward children’s and families services, identifiable per-child spending on children’s services and social care during this time has remained relatively static at £880 per child in 2023-24. This is surprising given major policy initiatives such as the implementation of The Promise and the introduction of the Whole Family Wellbeing Fund, which committed an investment of £500 million over the current Parliamentary term to foster holistic, family-centered support services across the country. 

However, the data available on children's services is limited, which makes it impossible to scrutinise spending in greater detail; only high-level spending-per-child figures can be reported in this analysis. These figures don’t allow for tracking the impact of flagship policy commitments or evaluating whether the intended transition from demand-led crisis intervention to proactive prevention is actually being realised.

Given the high priority placed on these initiatives - alongside the Government's stated ambition to shift 5% of all health and social care spending toward preventative measures by 2030 - the lack of granular data is particularly disappointing.

Significant gaps in the data make it difficult to identify some of the details of how public funds are being spent. These data issues also make it tricky to accurately measure what impact various policy decisions and programmes have had. In particular, the limited data in health, and children’s and family services makes it difficult to identify and track specific spending or evaluate if policies are working as intended. Insights published this year by Audit Scotland, Joseph Roundtree Foundation and Fraser of Allander Institute have highlighted similar concerns with the availability, quality and detail of spending data in Scotland.

Changes to tracking spending would allow the Scottish Government to better understand where money is going and what impact different policies are having. In particular, moving beyond broad "family" funding categories and tracking spending by specific age brackets (eg, zero-to-hour and two-to-four) would improve the data available, as would specifically being able to separate proactive spending from reactive, demand-led spend. In addition, reporting on spending related to individual programmes and policy changes would allow a better understanding of the impact of these initiatives. 

Public funds should be focused on where there is the greatest opportunity for positive change. Given that the early years of a child's life are when the foundations of physical, emotional and social development are laid, an increased focus on the early years - in terms of both funding and policy - has the potential to be transformative for future generations.