About the authors

Alma Economics combines unparalleled analytical expertise with the ability to communicate complex ideas clearly. www.almaeconomics.com

About the commissioning organisation

Nesta is a research and innovation foundation that designs, tests and scales solutions for the biggest challenges of our time. Driven by a vision to improve the lives of millions of people, our focus up to 2030 is on three missions: breaking the link between family background and life chances, halving obesity and cutting household carbon emissions. Find out more at nesta.org.uk

Executive Summary

This report provides a comprehensive analysis of public spending on early years support in Scotland. We examine trends in the level and composition of spending in four areas: welfare, healthcare, children's services and social care, and early education and childcare.

Early years spending in Scotland spans both devolved and reserved policy, and hence comes from a combination of UK Government and Scottish Government or Scottish local authority budgets. Healthcare, early education and childcare, and children's services and social care are devolved policy areas in Scotland. Following the Scotland Act 2016 and the Social Security (Scotland) Act 2018, a significant amount of welfare policy has also been devolved to Scotland. However, much of welfare in Scotland remains reserved, controlled by the UK Government.

Key findings

• Early years spending in Scotland. We estimate that public spending on children aged 0-4 in Scotland amounted to £9,700 per child on average or £2.4bn in total in 2022/23. The largest broad area of early years spending is early education and childcare, at £4,600 per child in 2022/23 (£1.1bn in total) or 48% of the total.
• Changes in spending. The total level of early years spending per child in Scotland changed little in real terms from 2010/11 to 2019/20, remaining at around £7,200 per child. Between 2019/20 and 2022/23, it increased to almost £9,700.
  • Welfare spending per 0-4-year-old fell from £3,820 per child in 2010/11 to a low of £2,390 per child in 2019/20, and has since risen to £2,960 per child by 2022/23. This is still about 30% below its 2010/11 level.
  • Healthcare spending per 0-4-year-old increased from £910 in 2010/11 to £1,290 by 2023/24 (a 39% increase).
  • Children's services and social care spending per 0-4-year-old increased from £840 in 2010/11 to a peak of £920 in 2019/20 and then stabilised at £880 in 2023/24 (a 5% increase).
  • Early education and childcare spending per 0-4-year-old almost tripled from £1,600 in 2010/11 to £4,670 in 2023/24.
• Big shift in composition of spending since 2010. There has been a shift in the composition of spending happening throughout the period – mostly away from welfare (which fell during the 2010s and has stabilised since) and towards early education and childcare (which has risen almost continually).
  • Welfare has fallen from 53% to 30% of total early years spending in Scotland.
  • Early education and childcare has risen from 22% to 48%.
  • Children's services and social care has fallen slightly from 12% to 9% of the total. This reflects little overall change in the level of spending per child in real terms (alongside increases in per-child early years spending overall).
  • Healthcare has remained stable at around 13% of total early years spend, meaning it has grown approximately in line with total early years spending.
• Some clear links to policy choices.
  • Falls in welfare spending are the consequence of large cuts to the generosity of many benefits and tax credits made by the UK government during the austerity of the 2010s. These cuts have affected all working-age families in receipt of benefits and were not explicitly targeted at the early years, though a number of them were targeted specifically at families with children. Since 2019/20, welfare spending in Scotland has stabilised and, in fact, slightly increased, in part due to the introduction of the Scottish Child Payment (SCP) for Universal Credit recipients in 2021, and its subsequent increases in generosity (which will have a further increased effect in future data releases, given the timeline of those increases).
  • The expansion of funded childcare hours from 600 to 1,140 annually for eligible 2-year-olds and all 3-year-olds in August 2021 have been a key driver of the significant increases in early education and childcare spending in recent years.
• Distributional implications. Although total early years spending has increased in the last few years, changes are highly unlikely to have affected different types of families in the same way. Welfare is by far the most strongly targeted towards low-income households among the spending areas, with receipts highly concentrated among low-income households, but it is where the largest cuts to early years spending been made since 2010/11, due to UK-wide cuts. Conversely, we show that spending on early education and childcare, which has been the major rising area of early years spending, is relatively equally distributed between areas with high child poverty rates and areas with low child poverty rates.

Limitations and exclusions

Our analysis is subject to several limitations and data gaps, summarised below.

Healthcare

An important limitation in healthcare is ambiguity over what is included within the spending data on pregnancy and maternity services. While Public Health Scotland offers spending data on these services, it is not entirely clear what is included in this spending and whether it relates to services during pregnancy or to post-natal/neo-natal/peri-natal services. As a result, we do not include any spending on these categories in our analysis. Similarly, any spending programme tied to pregnancy or maternity is captured in the relevant items in the Cost Book, and hence not within the scope of our analysis. These policy programmes include the Infant Feeding Programme and the Family Nurse Partnership. These issues would be mitigated if the Cost Book and its underlying documentation provided more detail on the types of services included in "pregnancy and maternity services”, as well as whether they are provided prior to birth and, if after birth, a breakdown of spending by the age of the children.

Finally, it is worth noting that the age-sex cost curves are not published and were kindly provided directly by Public Health Scotland. All subsequent analysis and interpretation is that of Alma Economics.

Children's services and social care

One important limitation of our analysis is that, due to data availability, we cannot separate spending on children's social care in Scotland from the wider range of children's services – many of which are very different, and in particular preventative in nature rather than a response to realised need. We only know that, taking the two together, there has been little change in spending. Given the Scottish policy focus on reducing the need for social care services through effective earlier intervention, this lack of granularity in the data is unfortunate. Future research would therefore benefit from additional granularity in the spending data in this area.

All of the spending that we are able to identify in this area comes through the Local Government Finance Statistics. As a result, funding not distributed by local authorities (e.g., funding that is instead distributed via third parties or directly from the Scottish Government) is not included.

Early learning and childcare

While funded childcare is likely the main component of the spending that we analyse in this area, spending on this funded childcare (referred to by the Scottish Government as early learning and childcare (ELC)) is not explicitly separated from other pre-primary education spending (e.g., school budgets devolved to head teachers), so our figures will capture a slightly broader set of spending than just funded childcare (and hence a slightly broader set of spending than our reports have captured for England and Wales). This issue could be addressed by adding a dedicated spending line for ELC in future Scottish Government publications.

All of the spending that we are able to identify in this area comes through the Local Government Finance Statistics. As a result, funding not distributed by local authorities (e.g., funding that is instead distributed via third parties or directly from the Scottish Government) is not included.

Introduction

Support and interventions targeted at the early years of life are major tools that governments have for addressing poverty and increasing life chances and social mobility. However, there is a gap in publicly available data on the distribution of this spending across spending areas, age groups, and other key breakdowns. In recent years, there have also been major policy changes that significantly affect children in the early years.

In this context, and in light of the upcoming parliamentary elections in Scotland in 2026, Nesta has commissioned Alma Economics to address this evidence gap. In particular, this project aims to calculate the level of spending relating to children under 5 in Scotland, disaggregating this according to the key types of spending, comparing spend across socio-economic groups and looking at changes over time.

This follows similar work undertaken previously for England and concurrently for Wales (Alma Economics, 2025). That said, differences in data mean that strict comparability across nations cannot be guaranteed. The broad conclusions we reach can likely be compared and contrasted across nations, but precise numbers should not be assumed to be perfectly comparable.

We estimate the level of public spending on children in Scotland aged under 5 (i.e., 0-4 inclusive), assembling and combining data (and, where necessary, transparent assumptions) on welfare, healthcare, children's services and social care, and early education and childcare. We track how this has changed since 2010, and we disaggregate results across children from richer and poorer backgrounds, and by whether the beneficiaries are aged 0-1 or 2-4.

Early years funding for healthcare, children's services and social care, and funded childcare comes from the Scottish Government, while funding for welfare comes from both the UK and Scottish Governments, since welfare policy is now partially devolved and partially reserved. Our analysis aims to capture spending irrespective of which government it comes from. In our commentary around the figures on welfare, we do, however, refer to the role of UK-wide welfare changes as distinct from Scottish Government reforms, as context for the reader.

This report begins by summarising our methodology. We then present and discuss our results for each of the four broad areas of early years spending. A Technical Appendix is included at the end, setting out our approach, data sources, and assumptions in detail.

Methodology

In this chapter, we provide an overview of the methods used to estimate spending for each of the four early years spending areas in Scotland. These include welfare, healthcare, children's services and social care, and early education and childcare. Taking these areas in turn, we explain how we distinguish spending on the early years from spending on other age groups and how we analyse patterns of spending by sub-age group, namely, 0-1-year olds (inclusive) and 2-4-year-olds (inclusive), and by socio-economic proxies. We aim to cover the period from 2010/11 up to the most recent data available, although the precise coverage varies across spending areas due to data availability.

For all spending areas apart from welfare, to explore distributional impacts, we took a local authority-level approach, breaking down spending according to the share of children living in relative poverty in the local authority. The relative poverty rate is measured using the standard poverty line of 60% of median household income. This is a natural approach to apply, given that, for all areas other than welfare, we have spending data at a local level; while, on the other hand, we are not aware of data that would allow a robust household-level analysis for healthcare or for children's services and social care. However, although the local area approach is a useful and widely-used proxy for socio-economic status, it is not the same as a household-level distributional analysis because, for example, there can be high-income households living in areas with low child poverty rates.

In some spending areas, we were also able to categorise spending as preventative or demand-led. In some cases this requires judgement, and/or there is spending that could be viewed through both lenses. We generally took a conservative approach, not attempting to categorise spending as preventative or demand-led in these cases. For example, this applies to the whole of welfare spending. The vast majority of welfare spending is targeted based on measures of need (most typically low income), but it can also be viewed as preventative, in that the provision of income protection is a way that governments can try to ensure that families can provide adequately for their children, hence preventing other problems from arising.

In cases where we did apply the distinction between preventative and demand-led spending, the overarching criterion used was the timing of the service or funding provision. For example, early education and childcare spending is classified as preventative, as it is designed to give children the best possible start in life and support their early development, rather than being a response to needs or challenges that have already emerged. On the other hand, Accident and Emergency services respond to needs that have emerged, so are classified as demand-led. One particular caveat here relates to the fact that, in Scotland, spending on social care (which is demand-led) and other children's services are not separated in the data, so we cannot apply what would have been useful distinctions in this case.

Many figures in this report are presented on a per-child basis, which are estimated using official mid-year population estimates by single year of age from the National Records of Scotland. We are therefore not expressing spending per child who benefits from or uses the relevant service, but spending per child across all children, whether they benefit or not. This distinction is important because the analysis aims to capture the effects of usage levels and eligibility rules (and any changes to these) on spending, rather than focusing solely on spending per service user or per eligible child.

It is important to present numbers in both aggregate and per-child terms. Between 2010/11 and 2022/23, the number of 0-4 year-olds in Scotland declined by about 17%, from 293,586 to 244,939. This comprised a 20% fall in the number of 0-1-year-olds and a 14% fall in the number of 2-4-year-olds. This means that constant early years spending in aggregate would imply a rise in spending per child.

All monetary amounts are adjusted for inflation and presented in 2025 prices. We present a detailed analysis of expenditures within each of the spending areas, as well as an analysis of the total expenditure across all spending areas combined. We also compare this to the broader public expenditure on all government services.

The following sections give a high-level summary of the methodology used in each area of spending. A detailed description of the methodology used can be found in the Technical Appendix of this report.

Welfare

We develop and implement a robust methodology for apportioning welfare spending on the early years in Scotland. By "welfare" we mean cash transfers paid to households, including both reserved benefits whose rules and levels are controlled by the UK Government (e.g., Universal Credit, Child Benefit) and devolved benefits delivered only in Scotland, such as the Scottish Child Payment and Best Start Grant and Best Start Food Payments¹. Our estimates are based primarily on household-level data from the Households Below Average Income (HBAI) survey, which we adjust to align with national administrative totals (DWP, 2025c; HM Revenue & Customs, 2025a)

Summary of methodology

In summary, we estimate early years spending on welfare as follows (a more detailed summary of these calculations is presented in the Technical Appendix at the end of this report):

• Total and per-child spending. We estimate early years welfare spending in Scotland by calculating the total benefits received by households with children under 5 in Scotland according to the HBAI survey data (this includes both the reserved and devolved benefits). We then scale this to account for the aggregate difference between welfare spending recorded in the HBAI survey across the UK and total UK welfare spending according to administrative data (DWP, 2025e; HM Revenue & Customs, 2025a; Scottish Government, 2023). This adjusts for known underreporting of benefits in surveys. We assume that income from benefits is shared equally across all members of a household. The HBAI survey is conducted annually, but we use pooled three-year moving averages of data to ensure robust sample sizes. For example, our "2022/23" data points draw on HBAI data from 2021/22, 2022/23, and 2023/24.
• Spending over time. We produce estimates of total welfare spending, per-child welfare spending on early years, and the age breakdown from 2010/11 to 2022/23 using three-year pooled HBAI samples. We show how the share of early years spending within total child welfare spending evolves over time.
• By age group. The HBAI household survey also allows us to further break down early years spend on welfare by age groups, namely children aged 0-1 (inclusive) and 2-4 (inclusive), as well as all children.
• By income group. The HBAI survey allows us to examine how early years spending in Scotland is distributed across children from households with different levels of household net income, adjusted (“equivalised") for differences in household size and composition.

A major development in Scotland's devolved welfare policy is the introduction of the SCP in 2021, initially providing £10 per week for children under 6. The payment was later increased (and extended in 2022 to cover children between 6 and 16), with eligible families receiving certain means-tested benefits now entitled to up to £27.15 per child per week. In the first two years covered by the HBAI data after the SCP's introduction (2021/22 and 2022/23), the survey was not successfully capturing all of the SCP receipts that it intended to capture. In 2023/24, the latest year for which data is available, amendments were made to improve the measurement of SCP within HBAI. Work by the Fraser of Allander Institute shows that these same improvements would have increased recorded receipts in the 2022/23 data by 44% (Fraser of Allander Institute, 2025)². We therefore scale SCP amounts in the HBAI data by 44% in both 2022/23 and 2021/22, in order to more robustly reflect its true scale.

Healthcare

Included categories

Our analysis includes both primary and secondary care spending. Primary care is defined as the first point of contact in the healthcare system and includes (i) primary medical services (GP), (ii) Primary Dental Care, (iii) General Ophthalmic services, and (iv) Pharmaceutical services.

Secondary care includes services provided by medical specialists and other health professionals after a referral from primary care (Public Health Information for Scotland, 2023). In particular, the categories that are included are:

• Inpatient: Inpatient care is defined as a patient admitted to a hospital and occupying a bed, usually requiring at least one overnight stay. An inpatient episode starts with admission and ends with discharge or transfer (Public Health Information for Scotland, 2023).
• Outpatient: Outpatient is an individual who attends a hospital or clinic for diagnosis or treatment but does not stay overnight (Public Health Information for Scotland, 2023).
• Day cases: Day cases are defined as patients who are admitted for care, occupy a bed, and receive planned treatment or surgery but are discharged on the same day (do not stay overnight). Day cases are formally recorded and distinguished from regular outpatients by the use of a hospital bed/allocated resources for a significant period (Public Health Scotland, 2024b).
• A&E: Accidents and Emergencies (A&E) are defined as the immediate assessment and treatment of non-scheduled emergency cases. Attendances refer to each presentation at A&E, regardless of whether the patient is later admitted as an inpatient or is treated and discharged directly. These can include both new (e.g., first attendance for a complaint) and return attendances (e.g., a non-scheduled subsequent attendance for the complaint prior to discharge) (Public Health Information for Scotland, 2023; Public Health Scotland, 2024b).
• Mental health: Mental health services are dedicated to diagnosis, treatment, and support for people with mental health conditions. These services include community care, outpatient clinics, specialist inpatient wards, and day case services.
• Community care: Community care is defined as health and social care services provided outside of hospital settings, intended to help people live independently in their own homes or communities. For the purposes of this analysis, community care includes:
  • District nursing
  • Community dentistry
  • Home dialysis for children
  • GP out of hours for children
  • Health visiting

As detailed in the Technical Appendix and mentioned again in the Findings section, for each healthcare spending category we derive an estimate of the proportion of spending in that category that goes on the early years. This is designed to be accurate for the category as a whole, but not for each individual subcategory within it. Taking the example of community care: the apportionment would not be valid for every sub-component of community care, because the age distribution of each sub-component will inevitably be different (e.g. a very high fraction of health visiting, and a very low fraction of district nurse spending, will be on 0-4 year-olds). It is however valid for community services spending as a whole, which is all that matters for the analysis that we present.

Overall, our methodology for calculating primary and secondary care spending (outlined in the next section) is based on Scottish Health Service Costs data (i.e., the Cost Book). The Cost Book comprises operational costs for each Scottish Health Board, as reported in the Scottish Financial Returns. As a result, our figures also reflect any funding given to Health Boards to deliver on policies and programmes. For example, outpatient services include spending from the Neonatal Neurodevelopmental Follow Up, primary care includes the Childsmile programme (offering dental care), and community care includes the Ready Steady Baby programme (providing parental support) and the Universal Health Visiting Pathway. The spending data includes the impact of these policies, but does not allow us to distinguish between spending following from each individual programme.

Summary of methodology

Our approach to estimating healthcare spending consists of apportioning total costs from the Cost Book by unit costs per age group from the Resource Allocation Formula (NRAC). Below, we present a short summary of our approach, while a more detailed presentation is included in the Technical Appendix.

• Total and per-child spending. Total spending is estimated by taking total reported costs and apportioning these to children under 5 using activity data (for primary care) and unit costs for children in early years from the Resource Allocation Formula (NRAC). Per-child spending was estimated by dividing total spending by the ONS early years population figures in Scotland. We then mapped spending based on preventive/reactive and distribution channels (i.e., funding originating directly from the Scottish Government or local authorities).
• Spending over time. The Cost Book includes expenditure and activity data from 2010 to 2023. Following discussions with policy experts, we have decided to leave 2020 and 2021 as blanks in the time series, reflecting a data gap due to COVID.
• By subcategory. Spending in the Cost Book is reported as inpatient, day cases, outpatient, A&E, and mental health services directly. For primary and community care, the Cost Book includes more detailed subcategories, allowing us to estimate spending with a bottom-up approach by aggregating these subcategories. As detailed in the Technical Appendix, maternity and midwifery costs are excluded entirely (health visiting is however included, as part of "community services").
• By age group. We estimated spending on the following groups: (i) 0-1-year-olds (inclusive); and (ii) 2-4-year-olds (inclusive). This was achieved by using the Resource Allocation Formula (NRAC) calculations, showing unit costs for acute, community, and mental health services for 0-1 and 2-4 age groups. We then used these unit costs to estimate the share of 0-1 and 2-4 spending compared to the total and applied these shares to expenditure data from the Cost Book.
• By share of children in relative poverty. We have used DWP data on the number of children in low-income families by local authority, which was then mapped to Health Boards, depending on the local authorities covered by each board³. We then collated spending from the Cost Book on the board level, allowing us to create a distribution of spending by income per board. Figures are presented for the years 2016/17 and 2023/24.

Children's services and social care

We estimate early years spending on children's services and social care using publicly available Scottish Local Government Financial Statistics (SLGFS) Social Work data (Scottish Government, 2025a). Hence, this category only presents spending on children's services and social care for early years that is related to local authority spend. Although local authorities are responsible for children's services and social care in Scotland, some spending is distributed via third parties and is not captured by the SLGFS. Examples are the Children Protection Improvement Programme, the Children, Young People and Families Early Intervention Fund (CYPFEIF) & Adult Learning and Empowering Communities Fund (ALEC).

The most significant omission is the Whole Family Wellbeing Fund (WFWF), which was excluded from our analysis because it is not captured in the SLGFS statistics. The WFWF was introduced towards the end of our period of analysis, in 2022/23, and has allocated £148 million (an unknown fraction of which will go to supporting the early years) to a range of children's services and social care activities in support of the Promise, the Scottish Government's commitment to improve the social care system.

A consultation on the SLGFS Local Financial Return (LFR) 03 data revealed that, while the core data was robust, there are significant concerns regarding the quality of the additional information that captures the spending of individual services. This data limitation means that it is not possible to separate the children's services and social care spending into more specific categories of spending (e.g., accommodation-based services versus community-based services), even though the data includes a range of services with different characteristics that could shed light on the focus of the early year social care policies and how they could be changing.

Summary of methodology

• Total and per-child spending. We use LFR 03 data on Children's services and social care to estimate total local authority spending on social work. To identify spending on early years (ages 0-4), we apportion total costs using the distribution of looked-after children by age group from the Children Looked After (CLA) statistic (Scottish Government, 2025d). We assume costs are distributed proportionally to the number of CLA in each age group, as explained in the spending by age group point below⁴. Per-child spending is then calculated by dividing early years expenditure by ONS and National Records of Scotland (NRS) mid-year population estimates for under-5s (NRS, 2025, p. 20; ONS, 2024b).
• Spending over time. For the period 2010/11 to 2023/24, we report trends in total spending, per-child spending, and spending by age group.
• By age group. As LFR data do not include age breakdowns, we use CLA data to estimate the distribution of spending across age groups 0-1 (inclusive) and 2-4 (inclusive). For consistency across spending areas, we assume that 1/4 of spending for the 1-4 age group (as reported in CLA) relates to age 1. No identifiable spending items specific to pregnancy were found in the data.
• By share of children in relative poverty. To assess how spending varies with local economic context, we combine the LFR spending data with the proportion of 0-4 children living in relative low-income households by local authority (DWP, 2025a). Figures are presented for the years 2016/17 and 2023/24.

Early education and childcare

Funded childcare entitlements have expanded significantly over time. The Children and Young People (Scotland) Act 2014 increased provision in August 2014 from 475 to 600 hours per year for all 3- and 4-year-olds, as well as some 2-year-olds, with a further expansion to 1,140 hours in August 2021 (Children and Young People (Scotland) Act 2014, n.d.; Scottish Government, 2024b). Eligibility criteria differ by age; while all 3- and 4-year-olds are entitled to universal provision, access for 2-year-olds is conditional on family income and other circumstances (e.g., experience of care).

We estimate education and childcare spending on the early years in Scotland using the SLGFS Education datasets (Scottish Government, 2025a). Funded childcare (referred to by the Scottish Government as early learning and childcare (ELC)) is likely the main component of spending in this area, and the major policy change in this area over the time period examined has been the expansion of funded childcare entitlements. This is highly likely to be driving the key trends observed in our analysis.

However, spending on ELC is not explicitly separated from other “pre-primary education” spending (e.g., school budgets devolved to head teachers). Specifically, this spending includes not only ELC, but also: individual school budgets devolved to pre-primary school head teachers; centrally held school budgets relating to pre-primary education; and an apportionment of: (i) schools without devolved budgets, (ii) schools' strategic management (iii) non-devolved school grants, (iv) facilitating school improvement, (v) school and pupil support; and (vi) funding for the Equity and Excellence leads (Scottish Government, 2021b).

For this spending area, we define universal spending as funding that is available to all children of a certain age, and targeted spending as funding directed only to specific groups of children within a certain age. We are able to make this distinction only in 2022/23 and 2023/24, as in these years, ELC spending is reported separately from the broader “Pre-primary education” spending. As discussed, due to differences in eligibility criteria, funded ELC provision for 3- and 4-year-olds is universal, whereas provision for 2-year-olds is targeted. Based on our aforementioned definition, we classify all spending on early education and childcare as preventative, as it is designed to give children the best possible start in life and support their early development, rather than being a response to needs or challenges that have already emerged.

Summary of methodology

We estimate the following spending on early years:

• Total and per-child spending. We utilise data on “pre-primary education” from the Scottish SLGFS or LFR datasets. This spending line contains information on both early learning and childcare, including funded ELC for 3- and 4-year-olds and eligible 2-year-olds. However, in the absence of more granular data, we are unable to distinguish between childcare and early learning within this time series. We then estimate the spending per child by dividing total spending on pre-primary education by the NRS early years population figures in Scotland. We also use the LFRs to compare the total spending on early years to total education and childcare spending on children of all ages (0-16). In particular, we will compare “pre-primary education” to the total spend across pre-primary, primary, secondary, and special education.
• Spending over time. We produce an estimate of the total spend on early years from 2010/11 to 2023/24, the most recent year for which data is available.
• By age group. We estimate spending on the age groups (i) 0-1-year-olds (inclusive) and (ii) 2-4-year-olds (inclusive). This is achieved by using the Summary Statistics for Schools in Scotland 2024, which provides information on the number of registered children for funded ELC, by age group from 2012 to 2024 (Scottish Government, 2024e). In the absence of granular data, funded ELC registration data is used as a proxy for spending by age group on pre-primary education more broadly. Spending within the Summary Statistics dataset includes under 2-year-olds as a single category.
• By share of children in relative poverty. Similar to the children's services and social care section, we estimate the variation in spending on early years by the rate of children in relative poverty across local authorities. We conduct this analysis for the years 2016/17 and 2023/24⁵.

A more detailed breakdown of our methodology, along with assumptions made and their underlying rationale, is highlighted in the Technical Appendix at the end of this report.

Findings

This chapter begins by setting out total early years spending in Scotland and how it has evolved since 2010/11, along with a breakdown of this spending by high-level spending area. We then step through each spending area in turn – namely, welfare, healthcare, children's services and social care, and early education and childcare – and examine it in more detail.

All findings below should be interpreted within the context of a declining early years population. The population of 0-4-year-olds in Scotland was 293,586 in mid-2011 compared to 248,364 in mid-2023 (a 15% decrease). As a result, even if spending per child remained constant, total spending would appear lower due to the decline in the 0-4 population.

Early years spending across all spending areas

Total and per child spending

Figure 1 shows early years spending for 0-4-year-olds from 2010/11 to 2022/23, broken down by broad spending area. The most noteworthy points are:

• Overall trends in total spending: Total early years spending in Scotland stood at £2.4 billion in 2022/23, up from £2.1 billion in 2010/11. This increase has occurred entirely in the last few years. Broadly speaking, for most of the 2010s, reductions in welfare and increases in early education and childcare roughly offset each other in aggregate. Since 2019/20, both per-child and total welfare spending have stabilised and, in fact, slightly increased as the SCP has been introduced, while early education and childcare spending has also continued to increase.
• Largest areas of spending: The two largest forms of spending on 0-4-year-olds in Scotland are welfare and early education and childcare. These are also the areas that have changed by far the most in absolute terms, and hence are the key areas in explaining overall changes in early years spending over time.
• Shift in the focus of support:
  • The key shift displayed in Figure 1 is from support via welfare to support via early education and childcare. The latter has overtaken the former as the dominant form of early years support. In 2010/11, 53% of support came via welfare and 22% via early education, whereas by 2022/23, these figures had reversed to 30% and 48%, respectively.
  • This shift reflects the UK-wide cuts to benefits during the austerity of the 2010s, alongside major expansions in funded childcare. At the start of our time series, all 3- and 4-year-olds were entitled to 475 hours of funded childcare per year. This was increased to 600 hours in 2014 under the Children and Young People (Scotland) Act 2014, which also introduced funded childcare for eligible 2-year-olds, and was further expanded to 1,140 hours in 2021 (Children and Young People (Scotland) Act 2014, n.d.; Scottish Government, 2024b).
• Stable support in other spending areas: Spending on healthcare and children's services and social care has remained fairly consistent over the period, with healthcare around 13% and children's services and social care around 9-12% of total spend.

Figure 1. Time series of total spending on early years in Scotland

2020/21 and 2021/22 are excluded from this analysis. Data gaps caused by the COVID-19 pandemic prevent an accurate comparison of Healthcare spending to other areas, thereby distorting the total figures.

In addition to examining early years expenditure across different spending areas, we also compare total early years spending with overall government expenditure in Scotland (including both reserved and devolved spending). Figure 2 illustrates this by showing early years spending as a share of total public sector expenditure in Scotland over time (HM Treasury, 2024; ONS, 2024a)). Overall, the share has declined from around 3% in 2010/11 to 2.6% in 2016/17 and 2.3% in 2022. This is broadly in line with population trends. As previously mentioned, the early years population in Scotland declined by 15% since 2010, while the overall population increased by 5%, meaning that one would tend to expect to see early years spending decline relative to total government spending.

Figure 2. Total spending on early years as a % of total government spending

The years 2020/21 and 2021/22 are excluded from this analysis. Data gaps caused by the COVID-19 pandemic prevent an accurate comparison of Healthcare spending to other areas, thereby distorting the total figures.

Figure 3 displays the spend on early years in Scotland in per-child terms. Between 2010/11 and 2022/23, the 0-4 population in Scotland declined by 15%. This explains the slightly different pattern between Figures 1 and 3, where per-child spend remained essentially flat between 2010/11 and 2018/19, despite decreasing total spend. Specifically, early years spending was £7,200 per child in 2010/11, remained flat until 2018/19, and has been steadily rising since to reach £9,700 in 2022/23 – an increase of approximately 36% over its 2010/11 level⁶. This is mainly driven by per-child spend in the early education and child care spending area, which grew by 190% from 2010/11 to 2022/23.

Figure 3. Time series of total spending per child on early years in Scotland

The years 2020/21 and 2021/22 are excluded from this analysis. Data gaps caused by the COVID-19 pandemic prevent an accurate comparison of healthcare spending to other areas, thereby distorting the total figures.

Spending by age group

Figure 4 shows how early years spending per child differs between 0-1-year-olds and 2-4-year-olds. Throughout the period, spending per child has been higher for 2- to 4-year-olds, but this gap has widened considerably. Comparing 2010/11 with 2022/23, per-child spending on 2-4-year-olds has increased from approximately £8,000 to £12,000, while spending for 0-1-year-olds has changed much less, standing at approximately £6,000 in both 2010/11 and 2022/23.

The driver of this pattern is early education and childcare. In fact, in every other high-level spending area we consider, per-child spending on 0- to 1-year-olds exceeds that on 2- to 4-year-olds. On the other hand, funded ELC within early education and childcare is available to all 3-4-year-olds and eligible 2-year-olds, with no funding currently available to 0- and 1-year-olds (Scottish Government, 2024b).

While spending per child aged 0-1 was around £6,000 at both the beginning and end of the time series, there was a steady decline from 2010/11 to approximately £5,000 in 2019/20, followed by a recent uplift back to £6,000. This uplift was partially driven by an increase in welfare spending, which is discussed in more detail in the next chapter.

Figure 4. Time series of total spending per child in Scotland, by age bracket

The years 2020/21 and 2021/22 are excluded from this analysis. Data gaps caused by the COVID-19 pandemic prevent an accurate comparison of Healthcare spending to other areas, thereby distorting the total figures.

Spending by (proxies for) socio-economic status

It is not possible to present a unified analysis of how total early years spending differs by socio-economic status. This is because, due to data availability, we must measure socio-economic status in different ways for different spending areas. We describe this analysis by spending area later in this chapter.

However, as we have concluded in similar reports on both England and Wales, it is likely that overall early years support in Scotland has shifted in composition away from lower-income households since 2010/11. This is the likely net effect of UK-wide cuts to welfare alongside substantial increases to ELC funding in Scotland. In 2010/11, 54% of early years support in Scotland came via welfare and 22% via early education, whereas by 2022/23 these figures had reversed to 30% and 48% respectively. Of all spending areas, welfare – which has reduced - is by far the most strongly targeted towards low-income households. Meanwhile, early education and childcare spending – which has increased - is targeted less tightly, and we show that spending on it is distributed evenly between areas with high and low child poverty.

The rest of this chapter provides a detailed analysis of early years spending within each defined spending area. It is important to note that results across each spending area, particularly those concerning the individual breakdowns of spending within each area, may not be directly comparable. This reflects differences in the underlying data sources and methodologies used across spending areas.

Welfare

This section examines welfare spending on children aged 0-4 in Scotland. Overall, early years welfare expenditure has declined substantially since 2010/11. This reflects the impact of UK-wide austerity and in particular the large cuts to social security for working-age households in the 2010s. Early years welfare spending in Scotland stabilised from 2019/20, and in fact has increased slightly since the introduction and expansion of the SCP beginning in 2021.

Per-child welfare spending is higher for 0-4 year-olds than for children as a whole (aged 0-18). However, the gap has narrowed over time. This is likely because families with young children tended to lose more from austerity-induced cuts to welfare. Comparing early years age groups, welfare expenditure per child has generally been similar for 0-1-year-olds and 2-4-year-olds, which is not surprising given that eligibility rules generally do not differ between these groups.

When broken down by income, lower-income households receive much greater welfare support than higher-income households, reflecting the progressive design of the system and the fact that much of it is means-tested (Hoynes, et al., 2024). Nonetheless, per-child welfare spending is now lower in all income quintiles than it was in 2010/11.

Total and per-child spending

Figure 5 describes the annual time series of early-years welfare spending in Scotland from 2010/11 to 2022/23. As outlined in the methodology section, this includes both reserved benefits (the majority) and those benefits that have, in recent years of the time series, been devolved to Scotland.

Overall, spending on welfare for under-5s in Scotland has declined by approximately 34%, from over £1.1 billion in 2010/11 to approximately £700 million in 2022/23. All of this reduction occurred between 2010/11 and 2019/20. This is the result of UK-wide welfare changes implemented by the UK government. As has been examined extensively and in detail in its own right (Ray-Chaudhuri et al., 2024), the period since 2010/11 has seen a large number of cuts to the generosity of working-age welfare across the UK.

For example, most benefit and tax credit rates were uprated by less than inflation in each year between 2013/14 and 2019/20; housing benefit limits for private sector tenants were subject to a series of cuts; and within the means tested benefits system, per-child support has been limited to the first two children in the family for children born since April 2017 (Scottish Government, 2019). The latter policy is a leading example of one that affects families with children specifically. However, families with children receive more benefits on average than other working-age families, and thus they tend to have more to lose from even broad-based cuts to support.

Since 2019/20, early years welfare expenditure has stabilised in Scotland, and in fact increased slightly. There are three factors likely at play. First, austerity-induced UK-wide cuts to welfare were concentrated most heavily in the 2010s. Second, the economic disruption of the COVID-19 pandemic led to some increased entitlements to welfare, increases to housing benefit rates for private sector tenants, and a temporary increase in Universal Credit (during 2020/21 and 2021/22). Third, the Scottish Government introduced the SCP for under-6s whose households receive Universal Credit in April 2021 and has since more than doubled its generosity (while also expanding it to all children under 16) to £27.15 per week per child.

Figure 5. Time series of early years welfare spending, 2010/11-2022/23

Figure 6 shows these figures on a per-child basis. Early years welfare spending in Scotland fell from £3,820 per child in 2010/11 to a low of £2,390 per child in 2019/20, and has since risen to £2,960 per child by 2022/23. This is still about 30% below its 2010/11 level. Note that the contribution of the SCP to per-child early years welfare spend in the latest data point is approximately £200. As described in the methodology section, for welfare, each data point is a three-year moving average (due to sample size considerations), so the data point for 2022/23 represents measurements taken between April 2021 and March 2024. SCP was increased in two phases over this period. This means that, for those entitled, it averaged approximately £19 per week over this period; however, its current rate is £27 per week (Scottish Commission on Social Security, 2022). Hence, the contribution of SCP will continue to grow as more recent data becomes available.

Welfare spending is essentially all targeted to some degree and distributed directly to households. We do not attempt to distinguish between preventative and needs-based welfare spending, as it is a subjective combination of the two.

Figure 6. Time series of early years welfare spending per child, 2010/11-2022/23

Spending by age group

Figure 7 breaks down welfare spending per child for children aged 0-1 and 2-4, over time. Welfare spending per child differs little between these groups and has moved in a similar manner for both groups over time. This reflects the fact that the vast majority of welfare entitlements do not depend on whether children are above or below the age of 2.

Figure 7. Time series of early years welfare spending per child, by age bracket

Table 1 compares welfare spending per child in the early years with spending per child for all children, in 2010/11, 2016/17, and 2022/23. Per-child welfare spending is higher for the early years than for children overall, but the gap has narrowed from around £600 in 2010/11 to approximately £300 in 2022/23. While the major welfare cuts of the austerity period did not explicitly distinguish between households with children above and below the age of 5, the two-child limit was applied to new births from April 2017. This means that the introduction of the limit still disproportionately affects children under 5 (by the end of the period covered by our data, the oldest children affected by this policy were about to turn 6). More generally, the convergence of early years spending and spending on all children is likely to partly reflect the fact that, since households with children tend to receive more welfare in the first place, they have more to lose when it is cut back.

Table 1. Spending on welfare per child aged 0-4 compared to 0-18

Spending by income group

Table 2 describes the distribution of spending on welfare per child by household income quintile at the same three points in the time series as above. The table shows that welfare has strongly targeted low-income individuals over time. In 2022/23, per-child welfare spending was more than five times greater in the lowest-income quintile than in the highest-income quintile. Per-child spending has fallen across all quintiles between 2010/11 and 2022/23. In absolute terms, cuts have been larger for the lowest-income households than the highest-income households, and especially so since 2016/17. This is not surprising, because low-income households receive more benefits, so they will tend to have more to lose when it is cut back. Nevertheless, welfare cuts have affected households across the income distribution, and in proportional terms, the changes have actually been larger for higher-income households.

Table 2. Distribution of spending on welfare by household income quintile, in 2010/11, 2016/17, and 2022/23

Healthcare

Exclusion of maternity and pregnancy spending

This section presents our estimates for healthcare spending in the early years in Scotland. We first present total spending on children aged 0-4 from 2010/11 to 2023/24, and then per-child spending by service type, age subgroup, and spending in health boards by quartile of children in relative poverty. Our results suggest that both total and per-child spending have been increasing consistently since 2010. This pattern can be observed in all subcategories included in the analysis, particularly inpatient care, which is the largest spending category for children.

Per-child spending on both 0-1- and 2-4-year-olds has been increasing, with the former constituting the majority of spending on 0-4 year-olds and seeing the greatest increase since 2010/11. Finally, per-child spending appears to be increasingly distributed to health boards serving local authorities with the highest proportion of children in relative poverty.

As mentioned in the methodology, the figures below also reflect the impact of any government-funded programmes that were delivered through Health Boards. There are various healthcare initiatives and programmes that have been implemented in recent years in Scotland. For example, outpatient services include findings from Neonatal Neurodevelopmental Follow Up, primary care includes the Childsmile programme (offering dental care), and community care includes the Ready Steady Baby programme (providing parental support) and the Universal Health Visiting Pathway. The spending data includes the impact of these policies, but does not explicitly allow us to distinguish between spending following from each individual programme. This makes it quite difficult to explain all healthcare spending trends. However, we comment below in cases where we have good reason to believe that specific policy initiatives or funding decisions are driving material changes in the spending figures.

Total and per-child spending

In total, healthcare spending on the early years (ages 0-4) in Scotland was approximately £320m in 2023/24. As shown in Figure 8, total spending has generally been increasing since 2010 by approximately 17% in total. It is worth noting that all time series analyses of healthcare spending include data gaps in 2020/21 and 2021/22 due to the COVID pandemic.

Figure 8. Time series of early years healthcare spending, 2010/11-2023/24

Figure 9 presents a time series of healthcare spending per child aged 0-4. Increases in spending on a per-child basis are more marked, due to the decline in the 0-4 population since 2010-11. Per-child spending was approximately £910 in 2010/11 and has been gradually increasing since 2012-13, reaching about £1,290 by 2023/24.

Figure 9. Time series of early years healthcare spending per child, 2010/11-2023/24

Spending by subcategory

This subsection breaks down spending by the broad categories of healthcare services, each including several items. As shown in Table 3, most spending is concentrated in inpatient services (£120m), followed by primary care (£70m), and outpatient care (£50m). The shares of spending across these categories have remained relatively stable since 2010/11 and through 2016/17. Mental health is the smallest of the spending areas, representing only £4m. This has however approximately doubled since 2010/11, which is driven by an increase in the number of 0-4-year-olds' attendances at mental health services (rather than the costs per attendance), suggesting that it likely reflects increased mental health need. Spending on A&E services has also grown significantly (almost 68%), especially since the pandemic.

Throughout the examined timeframe, the vast majority of healthcare spending (almost 91%) can be classified as responding to needs rather than preventive. Similarly, almost 90% of all health spending on children is distributed directly through the Scottish Government to Health Boards, while local authorities deliver only community services. As a result, the community services subcategory is the only one in our analysis funded through local authorities rather than the Scottish Government.

Table 3. Total early years healthcare spending by subcategory, 2010/11-2023/24

Table 4 breaks down spending per child into the aforementioned types of provision in 2010/11, 2016/17, and 2023/24. As with total spending, most spending per child is concentrated on inpatient services (£480 per child), followed by primary care (£270), and outpatient (£220), with mental health ranking last (£20). This table also shows the significant increase in spending per child for inpatient (45%), outpatient (65%), A&E (95%), and mental health (164%) services.

Table 4. Early years healthcare spending per child by subcategory, 2010/11-2023/24

Spending by age group

Figure 10 presents the time series of spending per early years child by age group from 2010/11 to 2023/24⁹. Spending per child is substantially higher for 0-1-year-olds, and has increased more quickly – rising by 51% between 2010/11 and 2023/23, while spending per child on 2-4-year-olds rose by 28%. This cross-age difference is almost entirely driven by increased spending in inpatient and outpatient services. It is difficult to be sure what drives the difference. It could reflect increased healthcare needs, which may manifest more in the very earliest stages of life. There are also programmes rolled out in recent years that are explicitly targeted to the neo-natal/post-natal stages (e.g., Neonatal - Family Integrated Care/Family Centred Care, New Model of Neonatal Care, Neonatal Neurodevelopmental Follow Up).

Figure 10. Time series of healthcare spending per child by age bracket, 2010/11-2023/24

Finally, per-child healthcare spending on the early years has risen somewhat more quickly, 2010/11, than per-child healthcare spending on all 0-18-year-olds. As shown in Table 5, spending per child aged 0-4 was, if anything, slightly lower than per-child spending across all children in 2010/11 – at £910, compared to £930. By 2016/17, these figures had converged at £1,000, and by 2023-24, Scotland was spending more per early years child (£1,290) than per child aged 0-18 (£1,170). This increase may in part reflect a shift in Government priorities, expressed through various programmes targeting specifically children in the early years, such as the Neonatal Neurodevelopmental Follow Up, the Childsmile programme (offering dental care), and the Ready Steady Baby programme.

Table 5. Spending on healthcare per child aged 0-4 compared to 0-18

Spending by share of children in relative poverty by Health Board

Table 6 presents the distribution of healthcare spending per early years child by quartiles of children in relative poverty for 2016/17 and 2023/24. As described in the methodology and detailed in the Technical Appendix, these quartiles are based on the share of children in early years in each local authority who are in families with low income. The results were then aggregated to the health board level and used spending data per health board to match shares of relative poverty with the healthcare spending.

The results suggest that there were no large differences across quartiles in 2016 or 2023. However, it is worth noting that the greatest increases since 2016 are observed at the lowest end of the income distribution (i.e., Q1 and Q2, representing the health boards with the highest shares of children in relative poverty).

Table 6. Average spending on healthcare per child, by quartile of the share of children in relative poverty, 2016/17 and 2023/24

Children's services and social care

This section explores trends in early years spending on children's services and social care in Scotland from 2010/11 to 2023/24, captured by local government finance statistics. It examines changes in both total and per-child spending, highlights differences across age groups, and considers how spending varies by local authority income. We found that the total spending was flat overall, while the per-child spending was increasing from around 2010/11 to 2018/19. Since then, both total spending and per-child spending have fallen, with the total spending being below its 2010/11 level. Moreover, there has been a greater per-child expenditure on children aged 0-4 in local authorities with greater child poverty.

We estimate early years spending on children's services and social care using publicly available Scottish Local Government Financial Statistics (SLGFS) Social Work data (Scottish Government, 2025a). Hence, this category only presents spending on children's services and social care for early years that is related to local authority spend. Although local authorities are responsible for children's services and social care in Scotland, some spending is distributed via third parties and is not captured by the SLGFS. Examples are the Children Protection Improvement Programme, the Children, Young People and Families Early Intervention Fund (CYPFEIF) & Adult Learning and Empowering Communities Fund (ALEC).

The most significant omission is the Whole Family Wellbeing Fund (WFWF), which was excluded from our analysis because it is not captured in the SLGFS statistics. The WFWF was introduced towards the end of our period of analysis, in 2022/23, and has allocated £148 million (an unknown fraction of which will go to supporting the early years) to a range of children's services and social care activities in support of the Promise, the Scottish Government's commitment to improve the social care system.

The spending data available for children's services and social care in Scotland means that it is not possible to precisely distinguish between preventive and reactive or universal compared to targeted services. Additional details are presented in the Technical Appendix.

Total and per-child spending

Figures 11 and 12 present the full time series of total and per-child early years spending on children's services and social care from 2010/11 to 2023/24. Total early years spending on children's services and social care remained quite flat between 2010/11 and 2018/19. However, this represented a rise in per-child terms due to the falling 0-4-year-old population. Since 2018-19, both total and per-child spending in this area have fallen. In aggregate, this has taken spending below its 2010/11 level, but in per-child terms, it remains above it. Per-child spending rose from £840 in 2010/11 to a peak of £920 in 2019/20 and stood at £880 in 2023/24.

Figure 11. Time series of children's services and social care spending, 2010/11-2023/24

Figure 12. Time series of children's services and social care spending per child, 2010/11-2023/24

Spending by age group

Figure 13 presents the full time series of per child spending on children's services and social care from 2010/11 to 2023/24 for age groups 0-1 and 2-4. Throughout the period, spending per child for the 2-4 group is greater than the spending per child for the 0-1 group, although there has been some convergence. Per-child spending for the 2-4 age group has barely changed since 2010/11, while increasing from £720 to £820 over the same period for the 0-1 age group.

Figure 13. Time series of children's services and social care spending per child by age bracket, 2010/11-2023/24

Table 7 shows the spending per child on the children's services and social care for the early age group 0-4 and for the whole 0-18 group in 2010/11, 2016/17, and 2023/24. For all three periods, the spending per child for 0-4 is lower than the spending per child for 0-18. This difference has increased over time from £200 in 2010/11 to £270 in 2023/24.

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Early education and childcare

Table 7. Spending on children's services and social care per child aged 0-4 compared to 0-18

Spending by share of children in relative poverty

Table 8 presents average per-child spending on children's services and social care in different local authorities, grouped into quartiles according to their levels of relative child poverty, for 2016/17 and 2023/24. Local authorities with the highest shares of children living in relative poverty are in the first quartile. For both time periods, spending per child is higher in areas with higher child poverty. This is likely to be related to the fact that many of these services are needs-based. The distributional pattern of spending across these local authorities has not changed dramatically over time.

Table 8. Average spending on children's services and social care per child, across quartiles of local authorities classified by the share of children in relative poverty, 2016/17 and 2023/24

Early education and childcare

We find that the magnitude of expenditure on early years within early education and childcare has increased substantially over time, particularly in recent years. Total spending per child almost tripled between 2010/11 and 2023/24. The expansion of funded childcare hours from 600 to 1,140 annually for eligible 2-year-olds, and all 3-year-olds in 2021, has been a key driver of this increase (Scottish Government, 2024b). As a result, spending growth has been concentrated among children aged 2 and over, while spending on children aged 0-1 remains far smaller, as provisions for this age group continue to be offered on a discretionary basis by Scottish local authorities ¹⁰.

Early education and childcare accounts for all of the overall growth in early years spending in Scotland since 2010/11. It has also grown by more per child than spending across all children aged 0-16, which included spending associated with pre-primary education, primary education, secondary education, and special education. Similar rates of spending growth have been seen across different kinds of local authorities, ranked according to their levels of child poverty.

Total and per-child spending

Figure 14 shows the time series of early years spending on pre-primary education (including ELC) from 2010/11 to 2023/24 ¹¹. Overall, total spending has increased by 143% between 2010/11 (£470m) and 2023/24 (£1,140m), driven by sharp increases since 2017/18.

As illustrated in Figure 15, due to the decline in the 0-4 population in Scotland in recent years, this spending increase is even larger in per-child terms, with per-child spending almost tripling between 2010/11 (£1,600) and 2023/24 (£4,670). Most of the increase occurred from 2021 onwards. This increase in both total spending as well as spending per child is most likely linked to policy reforms expanding funded ELC, which extended the number of funded hours available across age groups. In particular, the Children and Young People (Scotland) Act 2014 expanded funded early learning and childcare provision in August 2014 from 475 to 600 hours per year for all 3- and 4-year-olds, as well as eligible 2-year-olds. This was later expanded to 1,140 hours in August 2021 (Children and Young People (Scotland) Act 2014, n.d.; Scottish Government, 2024b). Although the largest increase is observed after 2017/18, this may reflect a delayed uptake in the offer, particularly as providers expanded their capacity (Scottish Government, 2017).

We estimate that 92% of ELC spending in 2022/23 and 2023/24 is universal, with the remaining 8% being targeted. The large universal share reflects the fact that the majority of funded ELC places are for 3- and 4-year-olds, for whom entitlements are available to all children of those ages. These estimates are limited to these two years, as they are the only periods for which the dataset used separates ELC spending from broader "Pre-primary" education spending ¹². Furthermore, as previously mentioned, we classify all associated spending as preventive.

Spending by age group

Figure 16 shows that early education and childcare spending in Scotland, and its increase over time, are heavily concentrated among 2-4-year-olds. This reflects the rise in eligible childcare hours available for 3- and 4-year-olds and eligible 2-year-olds, as previously discussed. Although no funded ELC is currently available for children aged 0-1 in Scotland, and provision for 2-year-olds remains targeted, the Scottish Government has committed to expanding this funding to all 1- and 2-year-olds over time as per the 2021 Programme for Government (Scottish Government, 2024b).

Table 9 compares the spending per child amongst children aged 0-4, with the spending per child on all children aged 0-16. Spending on children aged 0-4 years has increased by a greater amount (194%) between 2010/11 and 2023/24 than wider spending on education for children (20%). Our findings are also in line with similar research, which has found that total spending on schools and early years has increased in real terms between 2015/16 and 2023/23 (Snape & Sibieta, 2025).

Table 9. Spending on early education and childcare per child aged 0-4 compared to education spending per child aged 0-16

Spending by share of children in relative poverty

Table 10 presents average per-child spending on early education and childcare spending in different local authorities, grouped into quartiles according to their levels of relative child poverty, for 2016/17 and 2023/24. Local authorities with the highest shares of children living in relative poverty are in the first quartile.

The table shows that this spending and the increases in spending are distributed relatively evenly across local authorities according to their child poverty rates. This reflects the fact that most of the funded childcare entitlements are universal.

Table 10. Average spending on early education and childcare per child, by quartile of the share of children in relative poverty, in 2016/17 and 2023/24

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Scottish Government (2017) The expansion of early learning and childcare: evaluation report 2017. Available at: https://www.gov.scot/publications/expansion-early-learning-childcare-evaluation-report-2017/ (Accessed: 11 September 2025).

Scottish Government (2019) Welfare reform: annual report 2019. Available at: https://www.gov.scot/publications/2019-annual-report-welfare-reform/pages/3/ (Accessed: 11 September 2025).

Scottish Government (2020) Deferred entry to primary school: statistics. Available at: https://www.gov.scot/publications/deferred-entry-primary-school-statistics/pages/1/ (Accessed: 11 September 2025).

Scottish Government (2021a) EARLY LEARNING AND CHILDCARE STATUTORY GUIDANCE. Available at: https://www.gov.scot/binaries/content/documents/govscot/publications/advice-and-guidance/2021/07/early-learning-childcare-statutory-guidance-july-2021/documents/early-learning-childcare-statutory-guidance/early-learning-childcare-statutory-guidance/govscot%3Adocument/early-learning-childcare-statutory-guidance.pdf.

Scottish Government (2021b) EARLY LEARNING AND CHILDCARE STATUTORY GUIDANCE. Available at: https://www.gov.scot/binaries/content/documents/govscot/publications/advice-and-guidance/2021/07/early-learning-childcare-statutory-guidance-july-2021/documents/early-learning-childcare-statutory-guidance/early-learning-childcare-statutory-guidance/govscot%3Adocument/early-learning-childcare-statutory-guidance.pdf.

Scottish Government (2021c) Equity and excellence leads: Care Inspectorate findings. Available at: https://www.gov.scot/publications/equity-excellence-leads-report-care-inspectorate-special-inspection-focus-update-development-role/pages/2/ (Accessed: 8 October 2025).

Scottish Government (2022a) Producing time series comparable to 2020-21 LFRs: guidance note. Available at: https://www.gov.scot/publications/producing-time-series-comparable-to-2020-21-lfrs-guidance-note/ (Accessed: 11 September 2025).

Scottish Government (2022b) Scottish Budget: 2023 to 2024. Available at: https://www.gov.scot/publications/scottish-budget-2023-24/pages/6/ (Accessed: 30 January 2025).

Scottish Government (2023) Social Security Scotland statistics: publications. Available at: https://www.gov.scot/collections/social-security-scotland-stats-publications/ (Accessed: 11 September 2025).

Scottish Government (2024a) Early learning and childcare (ELC): provision for 1 and 2 year olds in Scotland. Available at: https://www.gov.scot/publications/early-learning-childcare-elc-provision-1-2-year-olds-scotland/ (Accessed: 11 September 2025).

Scottish Government (2024b) Scottish Budget 2025 to 2026: Distributional analysis of the Scottish Budget. Available at: https://www.gov.scot/publications/scottish-budget-2025-2026-distributional-analysis-scottish-budget/pages/4/ (Accessed: 9 October 2025).

Scottish Government (2024c) Scottish Prison Population Statistics 2023-24. Available at: https://www.gov.scot/publications/scottish-prison-population-statistics-2023-24/ (Accessed: 11 September 2025).

Scottish Government (2024d) Summary statistics for schools in Scotland 2024. Available at: https://www.gov.scot/publications/summary-statistics-for-schools-in-scotland-2024/pages/early-learning-and-childcare-elc/ (Accessed: 11 September 2025).

Scottish Government (2025a) Children's Social Work Statistics: Looked After Children 2023/24. Available at: https://www.gov.scot/publications/childrens-social-work-statistics-looked-after-children-2023-24/ (Accessed: 11 September 2025).

Scottish Government (2025b) Funded early learning and childcare for 2 year olds. Available at: https://www.mygov.scot/childcare-costs-help/funded-early-learning-and-childcare-for-2-year-olds (Accessed: 11 September 2025).

Scottish Government (2025c) Funded early learning and childcare for 3 to 5 year olds. Available at: https://www.mygov.scot/childcare-costs-help/funded-early-learning-and-childcare (Accessed: 11 September 2025).

Scottish Government (2025d) Local Financial Return (LFR). Available at: https://www.gov.scot/publications/local-financial-return/ (Accessed: 11 September 2025).

Scottish Government (2025e) Scottish Local Government Financial Statistics. Available at: https://www.gov.scot/collections/local-government-finance-statistics/ (Accessed: 11 September 2025).

Snape, D. and Sibieta, L. (2025) 'Scottish school spending, teachers and pupil numbers'. Available at: https://doi.org/10.1920/re.ifs.2025.0008.

Technical Appendix

Welfare method and sources

Total and per-child spending

Our approach to estimating welfare spending involves two steps. First, we compute total UK welfare spending. This is the sum of welfare spending reported by HMRC and DWP, plus spending in Scotland on benefits for which responsibility has been devolved to Scotland (including new top-ups to support that the Scottish Government has chosen to introduce, such as the SCP), which we base on Scottish Government Social Security Statistics along with the Scottish Government Budget (DWP, 2025e; HM Revenue & Customs, 2025a; Scottish Government, 2022b, 2023).

Second, we use broadly representative household-level survey data from the Households Below Average Income (HBAI) series to apportion how much of total UK welfare spending (calculated above) goes to different groups within Scotland (DWP, 2025d). Most fundamentally, for our purposes, this includes the proportion of UK welfare spending that goes to children in Scotland under 5. We have checked that the benefits devolved to Social Security Scotland are all captured in the survey questionnaire underlying these data.

The reason why we do not use the HBAI data to simply measure early years welfare spending in Scotland directly is that survey data is known to under-record total welfare spending when compared to administrative totals. Hence, we use the administrative totals and the information in the survey to apportion that total between groups. The implicit assumption is that the extent of under-recording/under-reporting of welfare is the same across all groups.

There was underreporting of the SCP Payment in 2021/22 and 2022/23, though the 2023/24 data is considered reliable. We contacted the Fraser of Allander Institute, which had previously estimated the impact of this underreporting on poverty statistics (Fraser of Allander Institute, 2025). Based on their estimates, we adjusted the SCP amounts in 2021/22 and 2022/23 by scaling reported payments from the FRS accordingly. This ensured better consistency across years and a robust recording of the scale of SCP in each year of operation.

It should be noted that the Council Tax Reduction Scheme (CTRS) is excluded from this analysis as it lies at the intersection of the tax and benefit systems. Notably, as it is formally/administratively a reduction in tax, it is not picked up as a distinct benefit in the survey data.

We have to make an assumption about the degree to which children benefit from welfare payments received by their household. We make the simple and transparent assumption that the benefit is shared equally among all individuals within a household. For example, if a household contains two parents, a 3-year-old, and a 10-year-old, and it receives £100 in welfare, we effectively assume that £25 (1/4 of the total payment) of this is early years spending. This assumption was preferred over alternative options, such as assuming that some people in the household do not benefit at all, as it is a more realistic representation of the benefits' impact.

Spending by subcategories

Due to its relatively large scale as a pure top-up to other UK benefits, we estimate the amount of SCP received by children aged under 5. As the HBAI dataset does not report the amount of SCP received specifically, we drew on the underlying Family Resources Survey, the dataset used to provide the HBAI figures, to estimate the amount of SCP received by children under 5. The total SCP received was easily matched with the HBAI dataset, as common identifiers are used across the two. We then applied the same method used in HBAIl to allocate benefit spending, using the total UK welfare spending.

Spending by age group

We use the same approach as above to produce estimates on how early years spending on welfare is distributed between the age groups 0-1 and 2-4, consisting of using the HBAI data on the number of children in each family by age. In addition, allows us to present the proportion of spending on early years compared to spending on all children (0-18) ¹³.

Spending by income group

Using the detailed household-level data provided by the HBAI dataset, we are able to examine the distribution of early years spending in Scotland across households with children by income quintile.

Mapping of spending

Welfare spending was mapped into the following categories:

• Targeted versus universal: Virtually all welfare spending is targeted at certain eligible individuals and families using eligibility rules, rather than being universal, and is distributed directly to households.
• Preventative versus reactive: Welfare can also generally be considered as being a combination of both preventative and reactive, depending on the nature of the benefit.
• Distribution channels: Welfare spending is distributed directly to households.

Healthcare method and sources

Total and per child spending

We have developed an approach tailored to primary and secondary care in collaboration with policy experts from Scotland. Below, we detail the sources, assumptions, and calculations used to calculate total spending for each type of care.

We then used official mid-year population estimates by single year of age from the National Archives of Scotland to calculate spending per child in Scotland (NRS, 2025). In particular, we calculated the total number of children aged 0-4 for each year and then divided the total expenditure in this area by that population.

Primary care

As mentioned in the methodology section, primary care includes:

• Primary medical services (GP)
• Primary Dental Care
• General Ophthalmic services
• Prescriptions within pharmaceutical services

Our scoping has established that total costs are available for each of these categories in the Cost Book, apart from prescriptions (Public Health Scotland, 2025b). To address this issue, we explored two separate approaches, both of which yielded almost identical results. The first approach was using GP prescribing unit cost information from NRAC and applying this to the GP population demographics data (see age breakdown section). The second approach was using the number of children aged 0-1 and 2-4 receiving GP care, calculating their share compared to the total number of people, and applying this to the total pharmaceutical cost reported in the Cost Book. Overall, we are confident in our estimates, given that both approaches yielded very similar results. However, we opted for the second approach, as the first results in a slightly lower figure, given that NRAC does not reflect all costs (see the next subsection).

Secondary care

Our engagement with policy experts in Scotland has highlighted that the unit costs for some services are substantially different for children in early years compared to other age groups. To address this issue, experts suggested that we use NRAC data (Public Health Scotland, 2024c). The NRAC is a formula used to allocate approximately 70% of the total NHS budget between the 14 NHS boards. The formula starts with the number of people resident in each NHS board area and then adjusts for: (i) age and sex profile of the NHS board population; (ii) additional needs based on morbidity and life circumstances (including deprivation); and (iii) excess costs of providing services in different geographical areas.

This dataset offers unit costs by acute, community, and mental health services for 0-1 and 2-4 age groups. However, it does not capture all of the funding and is only available up to 2022-23. To estimate spending in 2023, we discussed with experts and decided to assume that unit costs remain at the same level as in 2022. To ensure we capture all spending, we will take the following steps, suggested by PHS experts:

1. Calculate total costs from the NRAC age-sex curves, for 0-4 and for all ages, by multiplying the cost-per-head by the relevant populations used in NRAC.
2. Divide the total costs for 0-4 by the total costs for all ages to estimate the share of all expenditure that applies to early years.
3. Multiply the total Cost Book expenditure for each service type by this share from Step 2 to get an estimate of expenditure for 0-4 years.

It is worth noting that the Cost Book extends from 2010 to 2023, with data gaps in 2020 and 2021 due to the COVID-19 pandemic (Public Health Scotland, 2025b). Following discussions with experts, we concluded that we should leave these years as gaps in the time series, rather than attempt to estimate them.

The table below presents the relevant NRAC and Cost Book items we used for each service type.

• Home dialysis for children
• GP out of hours for children
• Health visiting

Spending by age group

Our approach to calculating secondary care expenditure yielded the age breakdowns of interest directly. As a result, this section presents our approach to calculating the age breakdowns for primary care.

The available age breakdowns differ for each type of care, as detailed below.

• GP data is available for the following in-scope age groups: 0-4, 5-14, and 15-24 (Public Health Scotland, 2025a).
• Primary dental care is reported on 0-2, 3-5, 0-18, and all age ranges (Public Health Scotland, 2025a).
• General ophthalmic services are broken down into the following relevant age ranges: 0-4, 5-9, 10-14, 15-19, and all ages (Public Health Scotland, 2024a).

To address these inconsistencies, we used official mid-year population estimates by single year of age from the National Archives of Scotland (NRS, 2025). In particular, we calculated the share of the general population of each single year of age within the age groups in each type of care. For example, we calculated the share of 1-year-olds with respect to the total number of children aged 0-2 in the general population and applied this percentage to the total 0-2 population in dental care services to estimate how many 1-year-olds use dental services. This approach assumes that service utilisation within the same age bracket is distributed proportionately to the national population share of the ages in that bracket.

Finally, we estimated spending on all children (i.e., aged 0-18) to compare this against spending on early years. To that end, we used the aforementioned age breakdowns for children within the 0-18 group, where available from the raw data. In cases such as ophthalmic services, which report spending on 15-19, we followed the same approach using National Archives of Scotland to estimate the share of each single year of age within the 15-19 group and then manually exclude 19-year-olds.

Spending by share of children in relative poverty

We were not able to identify any data that would allow us to directly estimate how spending on healthcare is distributed to income groups based on a household-level measure of income. As a result, we developed an approach based on area-level income. First, we collated spending data on primary and secondary care across all health boards from the Cost Book. We then calculated the share of this spending applicable to early years by following the same approach used for the total spending (i.e., using NRAC shares by age group).

Finally, we used DWP data showing the number of children in low-income families by local authority (DWP, 2025b). In particular, we focused on early years children in families in relative poverty, which is based on income Before Housing Costs. Income in this context is defined as Gross Personal Income from benefits or tax credits, from employment and self-employment, and from occupational pensions. We then summed the number of early years children in relative poverty across local authorities served by the same Health Board. This figure per board was then divided by the total number of early years children in each Health Board, resulting in a share of early years children in relative poverty by board. Finally, we mapped these shares to the spending on early years per board, calculated as described above.

Mapping of spending

Healthcare spending was mapped into the following categories:

• Targeted versus universal spend: Healthcare is available to everyone who may need it, regardless of age, income, or type of care. As a result, we considered all spending in this area universal.
• Primary prevention versus reactive spend: We classified all A&E and non-elective costs as reactive spend, while remaining items will be classified as preventative. Non-elective costs were calculated by using hospital episode statistics showing the number of all inpatient episodes that were elective, which allowed us to calculate a ratio. This ratio was then applied to all spending, excluding A&E (which was taken as reactive in its entirety).
• Distribution channels: Our understanding is that hospital and acute healthcare services in Scotland are funded from NHS Boards, through a dedicated block grant from the Scottish Government. However, we believe community services are funded by IJBs. As a result, we considered community services to be distributed via local authorities, while all remaining healthcare spending was attributed to the Scottish Government.

Children's services and social care method and sources

Total and per-child spending

We estimate total spend by utilising the Local Financial Returns (LFRs), which are part of the Scottish Local Government Finance Statistics (SLGS) (Scottish Government, 2025a). The LFRs provide a valuable source of information for this analysis, as they provide detailed, audited data on local authority expenditure across Scotland on an annual basis (Scottish Government, 2025e). Within the SGLS framework, this expenditure is categorised by service area, with "Social Work” (LFR 03) being the relevant category for this spending area. Specifically, we have identified the following subcategories of LFR 03 as relevant to early years spend: Service Strategy ¹⁵, Children's Hearings, and Children & Families.

The challenge of presenting the total early year spend for social care is that the categories presented in the LFRs also contain spend on other age categories. There is no specific breakdown on spending by age available for the LFR data. To address this limitation, we used

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Footnotes

Children's Social Work Statistics on the number of children looked after (CLA) in Scotland to approximate the share of spend for children aged 0-4 for categories that only include spend on children. Specifically, we assume that costs are distributed in proportion to the relative number of looked-after children in each age group. However, there is an additional complication for the Service Strategy category as it includes spend across all children's services and social care services, including adult social care. To estimate the children's share of Service Strategy costs, we assumed these costs are distributed in line with direct service spending (Children's Hearings, Children & Families, Adult Social Care, and Criminal Justice Social Work Services). Therefore, we calculate the proportion of total spend on direct service spending going to early years and apply this share to the Service Strategy budget to estimate the portion of the Service Strategy attributable to early years.

To estimate spending per child, we used official mid-year population estimates for Scotland by single year of age from the ONS (ONS, 2024c). Using these figures, we estimated the total number of children aged below 5 for each year and then calculated spending per child by dividing the total expenditure in this area by that population. This approach reflects spending per child across the entire population in this age group, rather than per child who directly benefits from or uses the service.

We produced an estimate of total expenditure and spending per child for the children's services and social care spending area from 2010/11 to 2023/24, the most recent year for which LFR data is available. To ensure that our time series is comparable, we followed the guidelines outlined in the Guidance on producing LFR time series document published by the Scottish Government (Scottish Government, 2022a). As this guidance only goes back to 2011/12, we used the same method of adjustment for 2010/11 as we do for 2011/12.

A consultation on the SLGFS local financial return (LFR) 03 data revealed that, while the core data was robust, there are significant concerns regarding the data quality of the additional information that captures the spending of individual services. This data limitation means that it is not possible to separate the children's services and social care spending into more detailed spending buckets, even though the data includes a range of services with different characteristics that could shed light on the focus of the early year social care policies and how they could be changing.

Spending by age group

As mentioned in the total early year spend section, the data does not provide information on breakdowns of spending by age group. The CLA data mentioned above provides further breakdowns of the numbers of CLA who are aged 0 and aged 1-4, per year since 2010. This is not exactly the population of interest, but it provides an empirical measure of the age distribution of support for a population that likely shares some relevant characteristics. We further assume that 1-year-olds receive 1/4 of the spending on 1-4-year-olds. This is to convert figures on 0-year-olds and 1-4-year-olds into figures on 0-1- and 2-4-year-olds for comparability with the other spending areas that we consider in this report.

To calculate early years spending as a proportion of total spending for children in this spending area, we again utilise LFRs for spend data and Children's Social Work Statistics on the number of children looked after (CLA).

Detailed age-specific data, enabling a 0-16 calculation, are only available for 2023/24. Therefore, we used the 0-18 definition so that we can present the proportion of early years spent compared to total spend on children across the whole time series of 2010/11 to 2023/24¹.

For service categories focused solely on children (e.g., Children & Families, Children's Hearings), total spend in these categories is taken as the baseline. For categories spanning both adults and children (e.g., Service Strategy), the children's share is derived by apportioning costs in line with the distribution of direct service spending (as described in the total early year spend section).

An additional category, Criminal Justice Social Work, could apply to some individuals aged 0-18, but is not relevant for the 0-4 early years group. We have no reliable way to determine how much of this spending relates to those aged 0-18, and several factors suggest it is negligible: its share of total children's services and social care spend is very small (<3%), under-16s are primarily dealt with through the Children's Hearing System, and only around 3% of prisoners in 2023/2024 were under 21 (Scottish Government, 2024c). For these reasons, we excluded it from the total spend for 0-18 years.

Spending by share of children in relative poverty

We are unaware of data that would allow us to directly estimate how spending on children's services and social care goes to different income groups based on a household-level measure of income or child poverty level. Hence, we employed an approach based on local area-level measurements. We present these figures for 2016/17 and 2023/24. We combined the LFR data on early year spending on children's services and social care by local authority with the proportion of early age children living in relative low-income households calculated from the DWP data on the number of children aged 0-4 living in households with relative low-income by local authority (DWP, 2025b).

Mapping of spending

• Preventive/Reactive and Universal/targeted: A consultation on the SLGFS local financial return (LFR) 03 data revealed that, while the core data was robust, there are significant concerns regarding the data quality of the additional information that captures the spending of individual services. This data limitation means that it is not possible to separate the children's services and social care spending into different spending lines that would assist a categorisation into preventative versus reactive and universal versus targeted.
• Distribution channels: All spending analysed in this review is local authority spending.

Early education and childcare method and sources

Total and per child spending

We estimate total spend using the Scottish Local Government Finance Statistics (SLGS) LFR 01 datasets (Scottish Government, 2025a). This data enables us to conduct an analysis of both childcare and early education provisions. The former refers to funded childcare, referred to in Scotland as ELC, while the latter captures broader expenditure on pre-primary education. Notably, it is not possible to separate these two components across most years of the analysis. As such, we provide a consistent time series for the years 2010/11 to 2023/24 of "pre-primary education” spend in Scotland, which includes funded ELC. To ensure that our time series is comparable across years, we followed the guidelines outlined in the Guidance on producing LFR time series document published by the Scottish Government (Scottish Government, 2022a). As this guidance only goes back to 2011/12, we used the same method of adjustment for 2010/11 as we do for 2011/12.

This time series is expressed in total as well as in per-child values. To calculate the expenditure per child, we divide the total expenditure for a given year by the population of children aged 0-4 years old in Scotland using population figures (NRS, 2025).

Spending by age group

We estimate the proportion of total funding allocated to 0-1-year-olds compared to the funding provided to 2-4-year-olds. Additionally, we estimate the funding provided per child aged 0-4 in comparison to the funding provided per child aged 0-16.

Information provided within the Scottish LFR datasets does not contain breakdowns of spending by age groups. Hence, we estimate spending by age groups using alternative sources of data. In particular, we estimate spending on ages 0-1 and 2-4 by drawing on data from the Summary Statistics for Schools in Scotland 2024 (Scottish Government, 2024e). This dataset provides information on funded ELC registrations in Scotland from 2012 onwards for children under 2 years old, 2 years old, 3 years old, 4 years old, and those with deferred entry.

To estimate spending by age group, we first calculate the share of total ELC registrations for each age group. This is done by merely dividing the number of registrations of each age group by the total number of registrations across both age groups, 0-1 and 2-4. We calculate this for the time series going back to 2012. To estimate the share of the registrations for years prior to 2012, for which data does not exist, we first calculate the average annual growth rate of funded ELC registrations for each age group from 2012 to 2014. We then apply this growth rate retrospectively for the years 2010/11 and 2011/12². Subsequently, we apply the corresponding percentage of registrations of each age group to the total spending on pre-primary education for each year between 2012 and 2024. This assumes that spending corresponding to each age group is directly proportional to the total registrations within each age group. Consultations with policy experts and initial scoping revealed that funded ELC represents the majority of total expenditure, allowing us to make this assumption in the absence of more granular data.

A note on deferred entry: Children who are 4 years old and due to start primary school are eligible to defer entry for one year (Education Scotland, 2023). Since 2019, all children who defer entry have been entitled to continue receiving funded Early Learning and Childcare; prior to this, eligibility was determined on a discretionary basis (Scottish Government, 2020). This means that some children may still be receiving funded ELC after turning 5, for a maximum of six months. However, these cases represent a small proportion, approximately 15% since 2014 (ibid.). Due to limitations in the available data, including the absence of granular information on the timing of funded ELC payments and exact dates of birth, it is not possible to fully isolate and remove funding for these children after they have turned 5 years old. For this reason, funded ELC for deferred entry is included in our analysis while estimating the total spending by age breakdowns. Given the small number of these cases and the short duration of extended provision into the 5th year of age, their inclusion is not expected to materially affect the results. This point was covered with the policy experts, who agreed.

We calculate the spending for all children aged 0-16 by combining expenditures on pre-primary education, primary education, secondary education, and special education using information available in the Scottish LFRs. To estimate the per-child spending on 0-4-year-olds in comparison to 0-16-year-olds, we divide the total spending available to each of the age groups by the population of each age group. Population figures are themselves sourced from National Records of Scotland (NRS, 2025).

Spending by share of children in relative poverty

The Scottish Government LFR datasets do not provide a breakdown of pre-primary education spending by income group. In order to estimate this breakdown, we follow the same approach towards income breakdown as already outlined within the relevant section of "children's services and social care." This involves using local authority information on the proportion of children aged 0-4 living in relative poverty, as well as information on expenditure on early education and childcare services by local authorities, which is available in the Scottish LFR datasets (DWP, 2025a). Local authorities are first ranked into quartiles based on the number of children in relative poverty aged 0-4. Subsequently, the average spending per child on early years is calculated for each of these quartiles. We present this analysis for 2016/17 and 2023/24 only.

Mapping of spending

Targeted versus universal spend

We estimate the total amount of funded ELC spending that can be classified as either targeted or universal. Within this spending area, we define universal spend as funding that is available to all children of a particular age group, with no specific eligibility criteria attached to it. Targeted spending, on the other hand, is defined as spending directed to specific groups of children within a certain age group that has some form of restrictions attached to it. In Scotland, funded ELC for 3- and 4-year-olds has been universally available and accessible to all children throughout the entire duration of our time series. On the other hand, ELC for 2-year-olds is discretionary and can only be accessed by certain children who meet certain criteria, such as parents falling under certain income levels (Scottish Government, 2021a, 2025c, 2025b).

To capture and apportion spending into each category, we utilise data available within the LFR datasets. While they do not distinguish between targeted and universal spending directly, they provide information on the total amount of funded ELC provided to children for the years 2022/23 and 2023/24. We combine this data with information on the registrations for ELC by age group (Scottish Government, 2024b, 2024d) to estimate spending allocated to 3- and 4-year-olds and spending on ages under 3. Given our knowledge of the policy area, we then classify all funded ELC allocated to 3- and 4-year-olds as universal and the remaining portion of funded ELC as targeted.

There exist two important caveats to this methodology. Firstly, we can only classify the amount of funded ELC that is targeted or universal, but not the entirety of pre-primary education itself. However, since the bulk of pre-primary education is funded by ELC, this mitigates against this caveat to an extent. Furthermore, it should be noted that this was done for the two years for which data is consistently available and could not be calculated across the entire time series.

Preventative versus demand-led spend

Due to the nature and purpose of early education and childcare in supporting child development, school readiness and longer-term outcomes, all spending in the area is classified as preventative.

Distribution channels

All spending included in this analysis is distributed by local authorities