Financial sustainability health check of the childcare sector: analysis and evidence

Section 2: Analysis of Survey Responses

20. To inform the Financial Sustainability Health Check separate detailed provider surveys were undertaken for day care of children services and for childminding services.

21. The surveys asked for information on areas including costs of delivery, income, capacity/demand, staffing and charges to parents and carers. In particular, many of the questions were designed to explore any changes in these factors between March 2020 (or the period to March 2020) and the point at which providers completed the survey (for most this would have be in May 2021).

22. This section sets out the detailed analysis of the surveys. Alongside some of the quantitative questions respondents could also provide supporting written information to provide more context to their answers. We summarise these written comments where relevant throughout the paper.

Survey design and response rate

23. The surveys were designed to capture detailed information on services' costs of delivery, income flows, capacity and demand, charges to family, staff recruitment and retention, and overall sustainability.

24. A key challenge in designing the surveys was balancing the need for collecting as much detailed information as possible, with making them as straightforward as possible for respondents to complete. With this in mind the survey questions were a mixture of multi-choice, numerical data entry (particularly for costs, income and charges), and optional text boxes to provide more information and context. We also worked to ensure that survey questions were neutral and balanced, so that respondents were able to present the factors that were key to their service (and to avoid leading respondents to a certain answer).

25. We are aware however, that despite these efforts completion of the survey required a significant time investment from respondents, and we are very grateful to those who took the time to complete the surveys.

26. The surveys were completed using an online form, with links to the surveys sent out to the sector via various routes including through the Care Inspectorate and the representative bodies.

27. The day care of children survey was live from 28 April 2021 to 20 May 2021, whilst the separate survey for childminding services was live from 30 April 2021 to 20 May 2021.

28. There were 167 responses to the day care of children services survey. Based on the latest registration data for the sector this represents around 9% of all registered private and third sector services. There were 203 responses to the childminding services survey, which represents just under 5% of all registered childminding services.

29. Scottish Government analysts undertook data cleaning of some of the data provided. This was predominately focussed on remove outliers, which was defined as data that looked to be outside the plausible range of responses for a particular question. The majority of the data cleaning was undertaken on the responses to the survey questions on the average costs of delivering an hour of childcare across different age groups and provision, and on the hourly charges for families for paid for childcare (again over different age groups and provision). We are aware from the feedback from providers, and from responses to the surveys, that some respondents experienced difficulties in being able to present their average costs of delivery on an hourly basis.

30. There has been no imputing of missing values in survey responses to inform the analysis presented in this paper.

Overview of responses to the surveys

31. In order to disaggregate the data to capture evidence across different types of services we have had to ensure a high enough number of responses in each sub-category to enable meaningful and robust analysis to be presented. To maintain consistency with reporting on other surveys for the sector each sub-category for analysis of the day care of children surveys must have at least 50 responses and we have prioritised as follows:

• Funded early learning and childcare (ELC) services;
• Services not delivering funded ELC;
• All private sector services;
• All third sector services; and
• Services delivering only school age childcare (SAC).

32. There are overlaps across some of these categories. For example, all private sector services will include both private services delivering funded ELC and private services not delivering funded ELC. However, the use of these broad categories allows for general variations across provider types to be identified.

33. The analysis of the childminding services survey splits between services delivering funded early learning and childcare (ELC) services and services not delivering funded ELC. It is important to note that respondents to the childminding survey were significantly more likely, relative to the overall childminding services population, to be delivering funded ELC.

34. The level of disaggregation that can be provided across tables in this paper will be dependent on the number of responses available (for example, not all respondents will answer all of the non-multiple choice questions).

35. Tables 2.1 and 2.2 provide an overview of the respondents to each of the surveys.

Table 2.1: Summary of respondents to Day Care of Children Services Survey, total respondents=167

Type of Service	Number of respondents in Group	% of respondents	Average Registered Places	% of services open
Funded ELC service	77	46%	54	100%
Service does not deliver funded ELC	90	54%	53	98%
Private Services	86	51%	61	100%
Third Sector Services	81	49%	45	98%
School age childcare only	73	44%	60	99%

Table 2.2: Summary of respondents to Childminding Services Survey, total respondents=203

	Number	% of services	% of services open
Funded ELC service	60	30%	100%
Service does not deliver funded ELC	143	70%	94%

Access to financial support during the pandemic

36. Childcare services have been able to access a range of financial support, including UK level schemes (for example, the Coronavirus Job Retention Scheme, the self-employment income support scheme, and the Bounce Back Loan Scheme), Scottish Government economy wide support (including the small business support grants, Pivotal Enterprise Resilience Fund, and the newly self-employed hardship grant), and targeted support for the childcare sector (including the Transitional Support Fund, Temporary Restrictions Fund, and the Childminding Business Sustainability Fund). The surveys asked a number of questions to establish the extent to which different types of childcare services had accessed financial support.

37. Given the different support schemes for the self-employed we have set out the information for day care of children services and childminding services separately.

Coronavirus Job Retention Scheme

38. The Coronavirus Job Retention Scheme (CJRS) is a UK Government scheme which has enabled employers to claim grants to cover the wages of workers furloughed since March 2020. The scheme was initially due to run until 30 May 2020, but has been extended on a number of occasions. The CJRS is currently scheduled to end on 30 September 2021.

39. The CJRS initially covered 80% (up to a maximum of £2,500 per month) of a furloughed workers wages as well as their national insurance and pension contributions. The level of support provided through the CJRS has varied at different points since August 2020.

40. From July 2020 flexible furloughing arrangements were introduced to allow employers to claim for usual hours not being worked by their employees (but who were now working some of their hours).

41. Table 2.3 sets out the proportions of services in each group who have drawn on any form of support from the CJRS since it was launched, whilst Table 2.4 shows the proportions of services that were accessing CJRS support at the time of the survey. This shows that:

• The majority of respondents to the survey reported that they had accessed support through the CJRS at some point since March 2020.
• School age childcare only services were the most likely to have accessed the CJRS (95%), whilst services in the third sector were least likely (73%).
• At the time of the survey some services were still accessing support through the CJRS. School age childcare only services were most likely to still be accessing CJRS support (65%), with funded ELC services least likely (18%).

Table 2.3: Have you, at any point since March 2020, accessed support through the Coronavirus Job Retention Scheme? (Day Care of Children Services)

Type of Service	No	Yes
Funded ELC service	26%	74%
Service does not deliver funded ELC	10%	90%
Private Services	8%	92%
Third Sector Services	27%	73%
School age childcare only	5%	95%

Table 2.4: Do you currently have any staff furloughed - either for all or part of their hours - through the Coronavirus Job Retention Scheme? (Day Care of Children Services)

Type of Service	No	Yes
Funded ELC service	82%	18%
Service does not deliver funded ELC	42%	58%
Private Services	50%	50%
Third Sector Services	72%	28%
School age childcare only	35%	65%

Targeted Support accessed by day care of children services

42. The Scottish Government has provided two targeted schemes for day care of children services in Scotland since the onset of the pandemic:

• The Transitional Support Fund (TSF) which provided one-off grants (ranging from £1,500 to £8,000 dependent on the size of the service) for day care of children services to enable them to meet the costs of meeting the requirements of the public health guidance for these services. The scheme was open for applications between September and October 2020.
• The Temporary Restrictions Fund, which has provided grants to services during the period of temporary restrictions in place from Boxing Day 2020. There have been 3 rounds of grants through the Fund with the final round targeted at school age childcare services.

Table 2.5: Day Care of Children Services who have accessed grant support through the Transitional Support Fund ( TSF) and the Temporary Restrictions Fund ( TRF) (Day care of children services)

		Access to TRF grant(s)
Type of Service	% that received TSF Grant	No	Yes - both Rounds 1 and 2	Yes - Round 1 only	Yes - Round 2 only
Funded ELC service	95%	16%	61%	10%	13%
Service does not deliver funded ELC	82%	36%	30%	1%	33%
Private Services	87%	22%	52%	5%	21%
Third Sector Services	89%	31%	37%	6%	26%
School age childcare only	88%	31%	32%	0%	38%

Other support accessed by day care of children services

43. Table 2.6 sets out the range of broader support that has been made available and the percentage of day care of children services that have accessed these schemes. Respondents accessing any of these schemes were given the opportunity to provide more information and highlighted that:

• The average value of loan secured through the Bounce Back Loan Scheme is around £40,000 (and the most common loan value reported is £50,000).
• The majority of respondents who have taken out a loan through the Bounce Back Loan Scheme have indicated that they will have started to make repayments by July 2021.
• For those who have accessed support through the Coronavirus Business Interruption Loan scheme the average value of the loan is around £120,000.
• Services that have secured a Coronavirus Business Interruption Loan indicate that they will make their first repayment between May 2021 and December 2021.

Table 2.6: Percentage of Day Care of Children Services who have accessed different support schemes that have been made available

Type of Service	Small Business Support Grant	Pivotal Enterprise Resilience Fund	Other Grant Scheme	Bounce Back Loan Scheme	Coronavirus Business Interruption Loan	Delayed Tax Payments
Funded ELC service	26%	9%	12%	23%	9%	0%
Service does not deliver funded ELC	15%	3%	21%	29%	0%	15%
Private Services	28%	5%	14%	51%	8%	15%
Third Sector Services	11%	7%	20%	1%	0%	0%
School age childcare only	10%	4%	22%	32%	0%	18%

Self-Employment Income Support Scheme

44. The Self-Employment Income Support Scheme (SEISS) is a UK Government scheme that has made grant support to the self-employed. The scheme initially opened in May 2020, with the initial support available determined by average monthly trading profit. The initial grant provided support for a 3 month period based on 80% of average monthly trading profit (up to a maximum grant of £7,500).

45. To date five rounds of SEISS grants have been made available with the maximum level of grant support available varying across the various grants provided through the SEISS.

46. Initially to be eligible for a SEISS grant the claimant must have been trading, and submitted a tax return, for the 2018-19 tax year (in later rounds those who became self-employed in the 2019-20 tax year could apply).

47. Table 2.7 sets out the proportions of each type of childminding service who have accessed some form of grant support through the SEISS and shows that:

• 70% of childminding services who had responded to the survey reported that they had accessed some grant support through the SEISS.
• Childminding services delivering funded ELC were more likely (78%) to have accessed SEISS support than childminding services not delivering funded ELC (66%).

48. For those childminding services who had accessed the SEISS the total average level of support received, at the time of completing the survey, was around £6,100. The average (mean) value of the total amount of support received through the SEISS is around £4,500 for funded ELC services and around £6,800 for childminding services who do not deliver funded ELC. Applications for the fourth SEISS grant were open (until 1 June 2021) at the time of the survey.

Table 2.7: Have you accessed a grant(s) through the Self-Employment Income Support Scheme? (Childminding Services)

	No	Yes
Funded ELC service	22%	78%
Service does not deliver funded ELC	34%	66%
Total	30%	70%

Other support accessed by Childminding Services

49. Childminding services could have accessed targeted grant support through either the Childminding Workforce Support Fund or the Childminding Business Sustainability Fund.

50. The Childminding Workforce Support Fund was targeted at childminding services experiencing financial hardship and who were struggling to access financial support through other schemes. Applications to the Fund could be made through two rounds in July 2020 and October 2020. Total funding of £420,000 (£390,000 from the Scottish Government funding and £30,000 from Scottish Childminding Association (SCMA)) was made available and the Fund was administered by the SCMA.

51. The Childminding Workforce Support Fund provided grants of £350 to 1,185 childminders in total.

52. The Childminding Business Sustainability Fund provided a one-off grant of £750 to all registered childminding services. Grants were issued in March and April 2021. The Fund was administered by the Scottish Government and 3,669 childminding services received a grant through the Fund (accounting for around 87% of all registered childminding services).

53. Table 2.8 shows the proportions of services responding to the survey who had accessed support through these funds. This shows that 46% of childminding services who responded to the survey reported that they had received a grant from the Fund. Those services delivering funded ELC were more likely to have received a grant (51% of services).

Table 2.8: Childminding Services who have accessed grant support through the Childminding Workforce Support Fund and the Childminding Business Sustainability Fund (Childminding Services)

	Did your service receive a grant from the Childminding Workforce Support Fund?		Has your service received a grant from the Childminding Business Sustainability Fund?
	No	Yes	No	Yes
Funded ELC service	49%	51%	22%	78%
Service does not deliver funded ELC	57%	43%	28%	72%
Total	54%	46%	26%	74%

54. Childminding services responding to the survey were also given the opportunity to provide more information on other support that they may accessed. Only a small number of childminding services accessed further support with the most notable being:

• 5% of childminding service reported that they had received support through the newly self-employed hardship grant.
• 7% of childminding services had secured a loan through the Bounce Back Loan Scheme. The average value of the loan secured is around £4,400, and the majority of childminders who have taken out one of these loans will have started to make repayments by July 2021.

Delivery Costs and Investment

55. This section explores the detailed information from the surveys regarding the costs of delivering childcare services. It also sets out the responses to questions regarding specific cost elements, in particular let/rent costs, and whether services had undertaken any capital investment.

Average Costs of Delivering Childcare Services

56. The surveys asked respondents to provide information regarding their average costs of delivering an hour of childcare, and whether they anticipated any changes to these costs in the next 6 months (from answering the survey).

57. This includes detailed information on the cost of delivering childcare to different age groups. These questions were not mandatory and not all respondents provided this information.

58. The range of values (in terms of the gap between the minimum and maximum responses reported) provided in response to the questions on the average costs of delivery was large and indicated some variations as to how some respondents answered the questions. In particular there were a number of outliers with very high values, and some respondents (in particular childminding services) were not able to estimate their costs of delivery on an hourly basis.

59. As highlighted earlier, in order to ensure that figures can be presented on a comparable and robust basis Scottish Government analysts undertook data cleansing of the cost information. The key adjustment that has been made here is that the analysis set out in tables 2.9 to 2.11 is based on responses where the hourly cost of delivery was in the range of £1 to £20.

60. The average costs in tables 2.9 to 2.11 are presented using both the median and mean. The data sets contain a small number of responses which are close to the maximum figure (£20 per hour) used in the range, and are considerably higher than the majority of responses. They therefore exert a disproportionate influence on the mean. The median, which is less affected by outliers in the data set, therefore provides meaningful measure of the average costs of delivery.

61. In light of these factors the key information to focus on in tables 2.9 to 2.11 is the average percentage changes across the different types of provision.

62. With regards to sustainable rates for the delivery of funded ELC hours, these should be set by local authorities in line with the guidance published in April 2019 and the additional Interim Guidance on implementation of Funding Follows the Child (the latest version of which was published in March 2021).

63. The average charges for School Age Childcare are presented separately in Table 2.10 due to the narrower range of provision in these services.

Table 2.9: Average cost of delivering an hour of childcare across different age groups and by type of day care of children service

Age Group	Funded ELC Service		Service does not deliver funded ELC		Private Services		Third Sector Services
	median	mean	median	mean	median	mean	median	mean
Under 2 years (March 2020)	£5.27	£6.24	£4.50	£4.23	£5.20	£6.31	£5.38	£4.99
Age 2 years (March 2020)	£5.00	£5.79	£4.50	£6.21	£4.99	£6.05	£5.00	£5.39
3-5 years (March 2020)	£5.00	£5.93	£4.45	£5.60	£5.00	£6.38	£4.75	£4.67
School age child (March 2020)	£4.90	£5.31	£4.20	£5.43	£5.00	£6.35	£4.00	£4.38
Holiday March 2020)	£4.90	£5.01	£3.10	£4.68	£4.50	£5.28	£3.10	£4.20
Under 2 years (current)	£6.11	£7.25	£4.60	£4.97	£6.00	£7.33	£5.63	£5.62
Age 2 years (current)	£5.65	£6.70	£4.60	£6.77	£5.65	£7.04	£5.31	£6.01
3-5 years (current)	£5.50	£6.62	£5.00	£6.67	£5.85	£7.16	£5.00	£5.05
School age child (current)	£5.31	£5.70	£5.00	£5.97	£5.93	£6.76	£4.79	£4.94
Holiday (current)	£5.30	£5.64	£3.50	£4.55	£5.00	£5.46	£3.00	£4.27
Under 2 years % change	16%	16%	2%	18%	15%	16%	5%	13%
Age 2 years % change	13%	16%	2%	9%	13%	16%	6%	11%
3-5 years % change	10%	12%	12%	19%	17%	12%	5%	8%
School age child % change	8%	7%	19%	10%	19%	7%	20%	13%
Holiday % change	8%	13%	13%	-3%	11%	3%	-3%	2%

Table 2.10: Average Cost of delivering an hour of childcare across different age groups, School Age Childcare Only Services

	Cost per hour (median)	Cost per hour (mean)
School age child (March 2020)	£4.13	£5.40
Holiday (March 2020)	£3.00	£4.83
School age child (current)	£5.08	£6.02
Holiday (current)	£3.10	£4.65
School age child % change	23%	12%
Holiday % change	3%	-4%

Table 2.11: Average cost of delivering an hour of childcare across different age groups and by type of childminding service

	Funded ELC Service		Service does not deliver funded ELC
	median	mean	median	mean
Under 2 years cost (March 2020)	£4.50	£4.32	£4.30	£4.22
Age 2 years cost (March 2020)	£4.50	£4.59	£4.28	£4.24
3-5 years cost (March 2020)	£4.50	£4.85	£4.50	£4.46
School age child cost (March 2020)	£4.88	£4.73	£4.50	£4.43
Holiday cost (March 2020)	£4.50	£4.41	£4.25	£4.29
Under 2 years cost (current)	£4.50	£4.48	£4.50	£4.53
Age 2 years cost (current)	£4.50	£4.53	£4.50	£4.50
3-5 years cost (current)	£4.50	£5.02	£4.50	£4.65
School age child cost (current)	£5.00	£4.95	£5.00	£4.67
Holiday cost (current)	£4.50	£4.65	£4.50	£4.44
Under 2 years % change	0%	4%	5%	7%
Age 2 years % change	0%	-1%	5%	6%
3-5 years % change	0%	4%	0%	4%
School age child % change	3%	5%	11%	5%
Holiday % change	0%	5%	6%	3%

64. Respondents to the survey were given the opportunity to set out more details as to what factors had driven any changes in their costs of delivery between March 2020 and at the point of completing the survey. The factors highlighted included:

• Increased cleaning costs were the most commonly reported factor – this covered both the additional supplies required as well as additional staff time.
• PPE costs, with some respondents mentioning in particular significant increases in the cost of purchasing gloves.
• Meeting the public health guidance for the sector, in particular working with the smaller cohorts (bubbles) which required more staff.
• Costs associated with staff having to self-isolate.
• Increase in insurance premiums.
• Supplier costs have increased (food, utilities, waste, etc).
• Costs of needing to pay staff the Real Living Wage.
• Costs per hour has declined as less children attending the service.
• Increase in rental charges.
• Increased electricity costs due to need to keep windows open for ventilation, increased heating costs and more laundry related costs.
• Increase in the cost of IT equipment.
• Some childminders reported increased transportation costs, including need to purchase more child car seats.
• Additional costs for new equipment for children, in particular for playing outdoors.
• Need for additional capital investment, including sinks, outdoor facilities, etc.

Potential changes in delivery costs

65. Respondents were asked if they anticipated that their delivery costs will change in the 6 months following the survey. Tables 2.12 and 2.13 set out the responses for day care of children and childminding services respectively.

66. The surveys offered respondents the opportunity to set out more information as to why they expected a change in costs. The factors highlighted were:

• Need to meet general inflationary pressures, including increases in food costs
• PPE costs continue to increase
• Loan repayments would start in this time period
• Need to increase wages to at least the Real Living Wage
• Staff cover for the holiday period
• To cover mandatory training courses that staff are required to attend
• Planned end of the Job Retention Scheme (currently scheduled to end in September 20210
• Local authority have increased rental fees
• End of rent holiday period
• Dependent on any changes to public health guidance for the sector
• Costs associated with recruiting new members of staff to replace those who have left

67. A number of respondents highlighted the importance of the public health guidance for the sector in influencing costs of delivery. For example, some respondents who indicated that they did not expect to see their costs of delivery change in the next 6 months was on the basis of the public health guidance not imposing further restrictions on the operation of their service in this period.

Table 2.12: Do you anticipate that your delivery costs will change in the next 6 months? (Day care of children Services)

	Funded ELC Service	Service does not deliver funded ELC	Private Services	Third Sector Services	School age childcare only
Increase	45%	33%	46%	31%	36%
Decrease	3%	13%	2%	15%	15%
Remain broadly unchanged	46%	54%	52%	54%	49%

Table 2.13: Do you anticipate that your delivery costs will change in the next 6 months? (Childminding Services)

	Funded ELC Service	Service does not deliver funded ELC	Total
Increase	33%	22%	25%
Decrease	7%	6%	6%
Remain broadly unchanged	60%	73%	69%

Capital Investment

68. Respondents to the surveys were asked if they had undertaken any capital investment within their service both in the year to March 2020 and in the period since March 2020. Capital investment could include actions to expand, modify, or develop a service (including investment in equipment). Tables 2.14 and 2.15 cover capital investment before and after March 2020, respectively, for day care of children services. Tables 2.16 and 2.17 present the information for childminding services.

Table 2.14: Did you undertake any capital investment within your service in the year to March 2020? Day Care of Children Services

Type of Service	Capital investment funded through a loan (or loans)	Capital investment funded through own funds or reserves	Capital investment funded through grant support	Capital investment funded through other route (please describe)	No capital investment
Funded ELC service	8%	38%	4%	3%	48%
Service does not deliver funded ELC	1%	3%	1%	0%	94%
Private Services	8%	33%	2%	1%	55%
Third Sector Services	0%	5%	2%	1%	91%
School age childcare only	0%	3%	1%	0%	96%

Table 2.15: Have you undertaken any capital investment to your service since March 2020 (this can include investment in equipment)? Day Care of Children Services

Type of Service	Capital investment funded through a loan (or loans)	Capital investment funded through own funds or reserves	Capital investment funded through grant support	Capital investment funded through other route (please describe)	No capital investment
Funded ELC service	9%	35%	14%	0%	42%
Service does not deliver funded ELC	1%	24%	6%	1%	68%
Private Services	10%	45%	11%	1%	33%
Voluntary/not-for-profit Services	0%	12%	9%	0%	79%
School age childcare only	0%	27%	6%	1%	66%

Table 2.16: Did you undertake any capital investment within your service in the year to March 2020? Childminding Services

	Capital investment funded through a loan (or loans)	Capital investment funded through own funds or reserves	Capital investment funded through grant support	Capital investment funded through other route (please describe)	No capital investment
Funded ELC service	2%	33%	5%	0%	60%
Service does not deliver funded ELC	0%	22%	11%	1%	66%
Total	0%	26%	9%	0%	64%

Table 2.17: Have you undertaken any capital investment to your service since March 2020? (Childminding Services)

	Capital investment funded through a loan (or loans)	Capital investment funded through own funds or reserves	Capital investment funded through grant support	Capital investment funded through other route (please describe)	No capital investment
Funded ELC service	3%	27%	12%	2%	57%
Service does not deliver funded ELC	0%	24%	13%	1%	62%
Total	1%	25%	13%	1%	60%

Premises

69. Respondents to the day care of children survey were asked whether they owned or let the building(s) in which they delivered their service. Those that let their premises were then asked whether these premises were owned by a local authority.

70. Table 2.18 sets out for the different types of day care of children services whether they owned or let the premises that they delivered their service in, and table 3.20 shows how many of those services that let the premises did so from a local authority.

Table 2.18: Do you own or let the building(s) in which you deliver your service? (Day Care of Children Services)

Type of Service	Let building/all buildings in which service is delivered	Own building/all buildings in which service is delivered	Service delivered over a mixture of owned and let buildings
Funded ELC service	74%	23%	3%
Service does not deliver funded ELC	92%	6%	2%
Private Services	69%	26%	5%
Voluntary/not-for-profit Services	99%	1%	0%
School age childcare only	94%	3%	3%

71. Of those respondents whose service is delivered in a building owned by a local authority, some were subject to a 'free let agreement': 31% of funded ELC services, and 37% of services who do not deliver funded ELC, who deliver in a building owned by a local authority were subject to a 'free let agreement'. This was more common for third sector services.

Table 2.19: Are any of the buildings in which your service is delivered owned by a local authority? (Day Care of Children Services)

Type of Service	No	Yes
Funded ELC service	51%	49%
Service does not deliver funded ELC	22%	78%
Private Services	50%	50%
Voluntary/not-for-profit Services	21%	79%
School age childcare only	23%	77%

Demand and Occupancy

72. The questions relating to occupancy levels provide an indication of changes in demand for services across the sector. Respondents were asked to consider occupancy in terms of the amount of their registered capacity they were currently utilising, and comparing this to the position in March 2020.

Changes in Occupancy Levels

73. Table 2.20 shows the reported occupancy levels (measures as the percentage of registered capacity being utilised) for the different types of day care of children services in March 2020 and at the time of answering the survey (the columns marked 'Current' in the table). Table 3.22 shows this for childminding services.

Table 2.20: Occupancy Levels (percentage of registered capacity) for Day Care of Children Services

Percentage of registered capacity	Funded ELC Service		Service does not deliver funded ELC		Private Services		Third Sector Services		School Age Childcare Only
	Mar-20	May 21	Mar-20	May 21	Mar-20	May 21	Mar-20	May 21	Mar-20	May 21
25% or less	1%	1%	1%	11%	1%	3%	1%	10%	0%	10%
26 to 30%	0%	1%	4%	4%	3%	2%	1%	4%	5%	4%
31 to 35%	1%	1%	1%	7%	1%	5%	1%	4%	0%	8%
36 to 40%	0%	0%	0%	10%	0%	5%	0%	6%	0%	11%
41 to 45%	0%	4%	2%	12%	0%	9%	2%	7%	1%	14%
46 to 50%	1%	8%	2%	11%	0%	10%	4%	9%	1%	11%
51 to 55%	1%	4%	2%	10%	1%	6%	2%	9%	1%	11%
56 to 60%	6%	4%	4%	11%	5%	9%	6%	6%	3%	12%
61 to 65%	3%	5%	3%	4%	5%	5%	1%	5%	3%	4%
66 to 70%	6%	8%	7%	6%	7%	7%	6%	6%	8%	5%
71 to 75%	12%	9%	9%	1%	14%	8%	6%	1%	10%	1%
76 to 80%	6%	3%	18%	2%	7%	3%	19%	1%	19%	1%
81 to 85%	6%	9%	10%	1%	12%	8%	5%	1%	11%	1%
86 to 90%	13%	14%	11%	3%	17%	9%	6%	7%	12%	1%
91 to 95%	22%	13%	8%	3%	16%	3%	12%	12%	8%	3%
96 to 100%	19%	16%	17%	2%	10%	6%	26%	11%	16%	1%
50% or less	4%	16%	11%	56%	6%	35%	10%	40%	8%	58%
Over 75%	68%	55%	63%	12%	63%	30%	68%	33%	67%	8%

Table 2.21: Occupancy Levels (percentage of registered capacity) for Childminding Services

Percentage of registered capacity	Funded ELC Service		Service does not deliver funded ELC
	Mar-20	May 21	Mar-20	May 21
25% or less	3%	3%	12%	21%
26 to 30%	2%	2%	2%	2%
31 to 35%	3%	5%	3%	7%
36 to 40%	0%	7%	1%	4%
41 to 45%	0%	3%	2%	3%
46 to 50%	0%	2%	3%	4%
51 to 55%	0%	3%	2%	9%
56 to 60%	3%	5%	5%	7%
61 to 65%	2%	2%	0%	3%
66 to 70%	3%	8%	4%	3%
71 to 75%	2%	5%	6%	6%
76 to 80%	7%	10%	5%	7%
81 to 85%	5%	13%	2%	4%
86 to 90%	8%	10%	6%	8%
91 to 95%	17%	8%	8%	5%
96 to 100%	45%	13%	40%	8%
50% or less	8%	22%	22%	40%
Over 75%	82%	55%	61%	32%

74. Tables 2.22 and 2.23 highlight the expected changes in occupancy levels that day care of children and childminding services were anticipating in the 6 months after completing the survey.

Table 2.22: Expected Change in Occupancy Levels for Day Care of Children Services over the next 6 months

	Funded ELC Service	Service does not deliver funded ELC	Private Services	Third Sector Services	School Age Childcare Only
Increase	36%	63%	56%	46%	68%
Decrease	17%	9%	14%	11%	8%
Remain broadly unchanged	47%	28%	30%	43%	23%

Table 2.23: Expected Change in Occupancy Levels for Childminding Services over the next 6 months

	Funded ELC Service	Service does not deliver funded ELC
Increase	15%	15%
Decrease	34%	47%
Remain broadly unchanged	51%	38%

Income

75. The surveys collected information on the income that services received from various sources. This included questions for those services that delivered funded ELC on the contribution that the payments for funded ELC made to their overall income.

Income from fees paid by parents and carers

76. The surveys asked services to provide the following information on their non-ELC income:

• What was your average monthly income from fees paid by parents and carers (e.g. non-funded ELC hours) in the year to March 2020?
• What was your average monthly income from fees paid by parents and carers (e.g. non-funded ELC hours) over the period since August 2020 when your service has been open and not subject to temporary restrictions as to which children can attend your service (for example, in early 2021 many services could only be open for children of key workers and vulnerable children)?

77. Tables 2.24 and 2.25 set out the changes in average monthly from fees paid by parents and carers (non-ELC income) for day care of children services and childminding services, respectively.

Table 2.24: Changes in average monthly income from fees paid by parents and carers (e.g. non-funded ELC), (Day care of children Services)

	Funded ELC service	Service does not deliver funded ELC	Private Services	Third Sector Services	School age childcare only
Monthly income year to March	£21,201	£11,491	£21,798	£9,058	£12,295
Current monthly income (£)	£15,525	£6,160	£15,038	£5,245	£6,117
Percentage change in average monthly income	-27%	-46%	-31%	-42%	-50%

Table 2.25: Changes in average monthly income from fees paid by parents and carers (e.g. non-funded ELC), (Childminding Services)

	Funded ELC service	Service does not deliver funded ELC
Monthly income year to March	£1,679	£1,315
Current monthly income (£)	£1,076	£895
Percentage change in average monthly income	-36%	-32%

Income from delivery of Funded ELC

78. For those services who deliver funded ELC the surveys asked for the following information:

• In the year to March 2020, what percentage of your service's annual income was accounted for by the payments for the funded ELC hours?
• In the period since August 2020, and when your service has been open and not subject to temporary restrictions as to which children can attend your service, what percentage of your service's income has been accounted for by the payments for the funded ELC hours?

Table 2.26: Percentage of total income accounted for by payments for the delivery of funded ELC, day care of children services and childminding services

	Funded ELC service	Private Services	Third Sector Services	Childminding Services
Percentage of income in year to March 2020	51%	33%	69%	31%
Current percentage of income	61%	45%	77%	35%

79. Those services delivering funded ELC were then asked about changes in the overall levels of income they received for delivering funded ELC:

• Compared to the year to March 2020, how has the total amount (level) of income that you receive for delivering funded ELC changed over the last 12 month period?

80. Where services reported that they had experienced a change in the level of income received for delivery of funded ELC they could set out the percentage increase or decrease in this income. Table 2.27 shows the split of services reporting that their levels of income from funded ELC had decreased, increased or remained unchanged. For those that reported an increase or decrease in the level of their income from funded ELC table 2.28 shows the reported percentage change in this income.

81. Respondents were also able to provide more information as to the reasons for the changes in the amount of income that they received for delivery of funded ELC. The key factors raised were: changes in the number of registered children with increases linked to delivery of 1140 hours; the local authority has provided a supplement to hourly rate to cover additional COVID-19 related costs; and increases in the hourly rate.

Table 2.27: Change in level of income for delivery of funded ELC over the past year, day care of children services and childminding services

	Funded ELC service	Private Services	Third Sector Services	Childminding Service
Decreased	16%	14%	18%	32%
Increased	63%	67%	57%	45%
Unchanged	22%	19%	25%	23%

Table 2.28: Percentage increase or decrease where level of income for delivery of funded ELC changed over the year to March 2020, day care of children services and childminding services

	Funded ELC service	Private Services	Third Sector Services	Childminding Service
Decreased by	38%	27%	50%	27%
Increased by	25%	25%	25%	37%

Charges to Families

82. The surveys asked respondents to provide information regarding the charges that they set for families in order to access their service and any proposed changes to these charges.

83. This includes detailed information on the hourly charges in each service for different age groups. These questions were not mandatory and not all respondents provided this information.

84. As with the information on the costs of delivery Scottish Government analysts undertook a quality assurance exercise on the responses to ensure that comparable and robust analysis can be presented. The key adjustment that has been made here is that the analysis set out in tables 2.29 to 2.31 is based on responses where the hourly charge was in the range of £1 to £20. This was judged to be reasonable cut-off point in order to adjust for where a small number of respondents may not have entered an hourly charge or misinterpreted the question.

85. As with the analysis on costs of delivery both the median and mean figures are presented for the average charge.

86. The average charges for School Age Childcare are presented separately in Table 2.30 due to the narrower range of provision in these services.

Table 2.29: Average (mean and median) charge per hour to parents and carers for an hour of childcare, Day care of children services

Age Group/Type of care	Funded ELC Service		Service does not deliver funded ELC		Private Services		Third Sector Services
	median	mean	median	mean	median	mean	median	mean
Under 2 years (March 2020)	£5.19	£5.27	£4.33	£4.41	£5.19	£5.35	£4.00	£4.42
Age 2 years (March 2020)	£5.00	£4.92	£3.90	£4.03	£5.00	£5.11	£4.00	£4.20
3-5 years (March 2020)	£5.00	£5.05	£4.15	£4.61	£5.00	£5.29	£4.20	£4.43
School age child (March 2020)	£4.82	£5.03	£4.14	£4.67	£4.50	£5.27	£4.00	£4.19
Holiday (March 2020)	£4.79	£4.88	£2.50	£3.29	£4.38	£4.53	£2.50	£3.04
Under 2 years (current)	£5.37	£5.44	£4.50	£4.56	£5.37	£5.48	£4.86	£4.68
Age 2 years (current)	£5.10	£5.09	£4.38	£4.77	£5.15	£5.34	£4.45	£4.40
3-5 years (current)	£5.00	£5.29	£4.60	£4.89	£5.30	£5.52	£4.66	£4.67
School age child (current)	£5.00	£5.37	£4.11	£4.78	£4.60	£5.47	£4.00	£4.29
Holiday (current)	£4.90	£5.14	£2.50	£3.18	£4.61	£4.44	£2.50	£3.19
Under 2 years % change	3%	3%	4%	3%	3%	2%	21%	6%
Age 2 years % change	2%	3%	12%	18%	3%	5%	11%	5%
3-5 years % change	0%	5%	11%	6%	6%	4%	11%	5%
School age child % change	4%	7%	-1%	2%	2%	4%	0%	2%
Holiday % change	2%	5%	0%	-4%	5%	-2%	0%	5%

Table 2.30: Average (mean and median) charge per hour to parents and carers for an hour of childcare, School Age Childcare Only Services

Age Group/Type of care	Charge per hour (median)	Charge per hour (mean)
School age child cost (March 2020)	£4.14	£4.83
Holiday cost (March 2020)	£2.50	£3.35
School age child cost (current)	£4.11	£4.92
Holiday cost (current)	£2.50	£3.15
School age child % change	-1%	2%
Holiday % change	0%	-6%

Table 2.31: Average (mean and median) charge per hour to parents and carers for an hour of childcare, Childminding Services

	Funded ELC Service		Service does not deliver funded ELC
Age Group/Type of care	Charge per hour (median)	Charge per hour (mean)	Charge per hour (median)	Charge per hour (mean)
Under 2 years (March 2020)	£4.37	£4.48	£4.50	£4.53
Age 2 years (March 2020)	£4.44	£4.49	£4.50	£4.53
3-5 years (March 2020)	£4.50	£4.65	£4.50	£4.50
School age child (March 2020)	£5.00	£4.84	£4.50	£4.60
Holiday (March 2020)	£4.50	£4.45	£4.50	£4.58
Under 2 years (current)	£4.50	£4.66	£4.50	£4.62
Age 2 years (current)	£4.50	£4.68	£4.50	£4.61
3-5 years (current)	£4.50	£4.72	£4.50	£4.70
School age child (current)	£5.00	£4.85	£5.00	£4.77
Holiday (current)	£4.75	£4.76	£4.50	£4.60
Under 2 years % change	3%	4%	0%	2%
Age 2 years % change	1%	4%	0%	2%
3-5 years % change	0%	1%	0%	4%
School age child % change	0%	0%	11%	4%
Holiday % change	6%	7%	0%	1%

Potential changes to hourly rates

87. Respondents to both surveys were asked whether they currently have any plans to make changes to the hourly rates that you charge to parents and carers over the next 6 months.

88. Table 2.32 sets out the responses from day care of children services. Where respondents provided further information as to why they were planning to change their charges over the next 6 months the main points raised were:

• Increase required to cover additional cleaning and PPE costs
• Need to cover general inflationary increases and higher staffing costs
• Need to increase fees in order to be able to pay all staff in the service the real Living Wage
• Implementation of planned annual increase (some services indicate this normally takes effect in August/September each year)
• Hourly rate received for delivering of funded ELC doesn't cover current costs of delivering the service
• Service has undertaken a market analysis of local area and will increase fees on the back of this
• Need to increase charges in order to off-set fall in demand
• Delayed previous planned price increases due to the impact of the pandemic
• Currently reviewing business model for service, which may require changes to charging structure in order to remain sustainable
• Dependent on decision at next AGM (a number of services in the third sector highlighted that decisions on charges taken each Summer at AGM, with some proposing price increases)
• No longer charge for snacks

Table 2.32: Do you currently have any plans to make changes to the hourly rates that you charge to parents and carers over the next 6 months? (Day care of children services)

	Funded ELC service	Service does not deliver funded ELC	Private Services	Third Sector Services	School age childcare only
Yes	44%	22%	36%	28%	24%
No	56%	78%	64%	72%	76%

89. Table 2.33 sets out the responses from childminding services. Where respondents provided further information as to why they were planning to change their charges over the next 6 months the main points raised were:

• Increase to reflect changes in the cost of running the services, due to a range of factors including increased cleaning costs (and associated additional hours of work), and increased food costs
• Need to increase in fees required to make business sustainable, with some indicating that this was to offset overall loss of income
• Moving from an hourly charge to a daily rate
• Higher fees for new families accessing the service (no change for current families to reflect loyalty)
• Introducing a previously planned increase which was delayed to help families during the pandemic
• Local childminding association reviews rates each year and sets recommended charging rates for local childminders

Table 2.33: Do you currently have any plans to make changes to the hourly rates that you charge to parents and carers over the next 6 months? (Childminding Services)

	Funded ELC Service	Service does not deliver funded ELC
Yes	37%	21%
No	63%	79%

Additional Charges

90. Respondents to both surveys were asked if in addition to fees charged for an hour of childcare, are there any other charges that parents and carers pay?

91. Tables 2.34 and 2.35 set out the responses from day care of children services and childminding services respectively. Respondents were given the opportunity to set out more information on these charges and whether they had, or planned to, make any changes to them. Where respondents provided further information on these additional charges the main points raised were:

• The most common charges were for meals and snacks:
  • The responses indicated that families were charged in the range of £1.50 to £2.50 per meal (for lunch or dinner) and £0.60 to £0.80 for breakfast.
  • Families were charged either a daily or weekly rate for snacks, with responses indicating that this was generally in the range of £0.35 to £0.50 per session.
• A number of third sector school age children services reported that they charged an annual family membership/registration fee, which ranged from around £10 to £30 per family each year.
• Additional charges for trips/outings
• Mileage charges, as well as drop off and pick-up charges (highlighted by childminding services)
• Some childminding services indicated they charged retainer fees
• Some services indicated that they charged a late fee if children were not picked up at the end of their session
• Charges for additional classes offered at the service (examples included yoga, language classes, and sports classes).
• Only a very small number of respondents indicated that they had made any changes to these charges over the past year or had plans to make changes in the next 6 months. Where planned changes were highlighted these were mainly in relation to increases in charges for meals.

Table 2.34: In addition to fees charged for an hour of childcare, are there any other charges that parents and carers pay? Day Care of Children Services

	Funded ELC service	Service does not deliver funded ELC	Private Services	Third Sector Services	School age childcare only
Yes	36%	19%	27%	27%	22%
No	64%	81%	73%	73%	78%

Table 2.35: In addition to fees charged for an hour of childcare, are there any other charges that parents and carers pay? Childminding Services

	Funded ELC Service	Service does not deliver funded ELC
Yes	23%	13%
No	77%	87%

Staffing

92. The surveys asked respondents to provide a range of information relating to their staff. We have also used this as an opportunity to capture more information as to how many services currently pay the real Living Wage and how many intend to do so in the future.

93. The analysis in this section focuses on staff vacancies and those aspects from the surveys most closely linked to financial sustainability.

Staff Vacancies

94. Respondents were asked a range of questions relating to the movement of staff in their services including:

• Do you currently have any staff vacancies in your service (if fully staffed then answer no)?
• Have any members of staff left your service since March 2020?

Table 2.36: Do you currently have any staff vacancies in your service (if fully staffed then answer no)? (Day Care of Children Services)

Type of Service	No	Yes
Funded ELC service	61%	39%
Service does not deliver funded ELC	82%	18%
Private Services	65%	35%
Third Sector Services	80%	20%
School age childcare only	84%	16%

Table 2.37: Have any members of staff left your service since March 2020? (Day Care of Children Services)

Type of Service	No	Yes
Funded ELC service	25%	75%
Service does not deliver funded ELC	27%	73%
Private Services	14%	86%
Third Sector Services	38%	62%
School age childcare only	26%	74%

Payment of the real Living Wage

95. The Scottish Government believes that the single most important driver of the quality of a child's early learning and childcare (ELC) experience is a high quality workforce. That is why a commitment to Fair Work Practices is a key aspect of Funding Follows the Child.

96. The Scottish Government considers the payment of the real Living Wage to be a significant indicator of how a provider of funded ELC is committed to Fair Work practices. To support this private and third sector providers delivering funded ELC entitlement will receive a sustainable rate, which enables payment of at least the real Living Wage to all childcare workers delivering the funded ELC entitlement.

97. In order to gather more information on payment of the real Living Wage across the childcare sector the survey asked respondents:

• Do you currently pay at least the Real Living Wage to staff in your service?
• Do you intend to pay the Real Living Wage to all staff in your service from August 2021?

98. Tables 2.38 and 2.39 provide a summary of the responses to these questions.

Table 2.38: Do you currently pay at least the Real Living Wage to staff in your service?

Type of Service	No	Yes - all staff	Yes - staff delivering funded ELC
Funded ELC service	16%	56%	29%
Service does not deliver funded ELC	49%	51%	0%
Private Services	44%	37%	19%
Third Sector Services	22%	70%	7%
School age childcare only	48%	52%	0%

Table 2.39: Do you intend to pay the Real Living Wage to all staff in your service from August 2021?

Type of Service	No	Yes
Funded ELC service	12%	88%
Service does not deliver funded ELC	43%	57%
Private Services	36%	64%
Third Sector Services	21%	79%
School age childcare only	42%	58%

Assessment of Sustainability

99. The surveys asked respondents to provide assessments as to how sustainable they viewed their service on a scale of 1 to 10 (with 1 indicating very unsustainable/potential need to close in near future and 10 indicating very sustainable/no concerns) at: (1) March 2020 before the impacts of the pandemic, and the restrictions for the sector, took effect; and (2) at the time of answering the survey (which for the majority of respondents was some point in May 2021).

Day care of children services assessment of sustainability

100. Table 2.40 sets out for each type of day care of children their self-reported assessments of sustainability in March 2020 and at the time of the survey.

Table 2.40: Sustainability Assessments for Day Care of Children Services, On a scale of 1 to 10 (with 1 indicating very unsustainable/potential need to close in near future and 10 indicating very sustainable/no concerns)

Assessment of Sustainability	Funded ELC service		Service does not deliver funded ELC		Private Services		Third Sector Services		School age childcare only
	March 20	May 21	March 20	May 21	March 20	May 21	March 20	May 21	March 20	May 21
1	0%	0%	0%	6%	0%	5%	0%	1%	0%	5%
2	0%	1%	0%	8%	0%	3%	0%	6%	0%	8%
3	3%	3%	2%	4%	2%	5%	2%	2%	1%	5%
4	3%	5%	0%	8%	1%	6%	1%	7%	0%	10%
5	3%	9%	3%	13%	2%	15%	4%	7%	1%	10%
6	5%	18%	2%	14%	5%	15%	2%	17%	3%	15%
7	9%	18%	8%	12%	6%	14%	11%	16%	8%	11%
8	21%	16%	8%	14%	10%	8%	17%	22%	7%	16%
9	29%	13%	22%	6%	26%	8%	25%	10%	21%	4%
10	29%	17%	54%	14%	48%	21%	37%	10%	59%	15%
1-4 Total	5%	9%	2%	26%	3%	19%	4%	17%	1%	29%
5-6 Total	8%	27%	6%	28%	7%	30%	6%	25%	4%	25%
7+ Total	87%	64%	92%	47%	90%	51%	90%	58%	95%	47%

101. Table 2.41 provides a split within each type of service based on whether they reported a decrease, increase or no change in their sustainability assessment.

Table 2.41: Change in Sustainability Assessment between March 2020 and current assessment by type of service

Type of Service	Decrease	Increase	No Change
Funded ELC service	56%	13%	31%
Service does not deliver funded ELC	74%	9%	17%
Private Services	64%	8%	28%
Third Sector Services	68%	14%	19%
School age childcare only	77%	5%	18%

102. The surveys allowed respondents to provide further information to explain their sustainability assessments.

103. A range of different issues were covered in these responses. We have grouped these by theme in Table 2.42, and distinguished between funded and non-funded services, and for each group whether they reported: (1) a decrease in their sustainability assessment between March 2020 and now; or (2) an increase or no change in their sustainability assessment between March 2020 and now.

Table 2.42: Themes highlighted by services to support their assessment of sustainability, day care of children services

Funded ELC Service -

Decrease in Sustainability Assessment:

• Lower funded payments due to decrease in demand
• Increased COVID-19 related costs (e.g. cleaning, staff, PPE)
• Extra costs in order to be able to pay the real Living Wage
• Concerns as to whether the sustainable rate for delivering funded ELC will increase to cover additional COVID-19 related costs
• Increased administration Sustainable rate not felt to be enough to cover costs of delivery
• Sustainable rates for next school year not yet set by local authority
• Unable to compete with wraparound charges at local authority services
• Concerns that expansion to 1140 hours has resulted in too much local capacity, which could reduce demand for places at private/third sector services.
• Impact of public health guidance for day care of children services, in particular the need to operate smaller cohorts (bubbles)
• Concerns about losing staff
• Majority, or all, of financial reserves have been drawn down
• Concerns about the impacts of positive COVID-19 cases in setting
• Unable to match salaries offered in local authority settings
• Struggle to get parents to join Committee and to help run the service (and concerns raised by a small number of respondents regarding the parent committee based model)

Increase or no change in Sustainability Assessment:

• Strong demand for places (with some reporting long waiting lists)
• Owners of business have substantial assets to draw on
• Importance of Government support, in particular the Job Retention Scheme and payments for delivering critical childcare
• Determination of team running the service
• Gaining partnership status (being able to deliver funded ELC) has improved sustainability
• Used lockdown period as an opportunity to review business structure and processes in order to improve
• Low cost loans have supported the service during the period of restrictions and reduced demand

Service does not deliver funded ELC -

Decrease in Sustainability Assessment:

• Reliant on support provided by the Government (in particular the Job Retention Scheme), but concerned about these ending
• Running at a loss each month despite support measures
• Significant decrease in demand and currently slow to recover to previous levels
• Continued low demand could result in staff redundancies
• Increased cleaning costs
• Increased administration costs
• Change of premises has resulted in substantial increase in let costs
• Concerns about another lockdown period that restricted demand
• Majority, or all, of financial reserves have been drawn down
• Difficulty in attracting qualified staff to fill vacancies
• Move to university and college students predominately learning online has impacted demand
• Unable to hold fundraising events
• Pressures on staffing capacity
• Parents have continued to contribute to the service during closure periods

Increase or no change in Sustainability Assessment:

• Government support has helped to maintain sustainability (importance of Job Retention Scheme)
• Have been able to draw on reserves
• Able to sustain service on lower numbers
• Interest from families for places
• New service model to meet the needs of children, families and the community.

Childminding services assessment of sustainability

104. Table 2.43 sets out the self-reported assessments by childminding services of their sustainability in March 2020 and at the time of the survey.

Table 2.43: Sustainability Assessments for Childminding Services, On a scale of 1 to 10 (with 1 indicating very unsustainable/potential need to close in near future and 10 indicating very sustainable/no concerns)

Assessment of Sustainability	Funded ELC Service		Service does not deliver funded ELC		Total
	Mar-20	Current	Mar-20	Current	Mar-20	Current
1	5%	7%	6%	8%	5%	7%
2	0%	2%	1%	6%	1%	5%
3	2%	7%	4%	7%	3%	7%
4	0%	5%	3%	10%	2%	8%
5	7%	17%	8%	16%	7%	16%
6	2%	13%	2%	9%	2%	10%
7	3%	15%	8%	13%	7%	13%
8	20%	20%	8%	12%	12%	14%
9	10%	3%	13%	8%	12%	6%
10	52%	12%	47%	12%	48%	12%
1-4 Total	7%	20%	13%	31%	11%	28%
5-6 Total	8%	30%	10%	25%	9%	27%
7+ Total	85%	50%	77%	44%	79%	46%

105. Table 2.44 provides a split based on whether the childminding service reported a decrease, increase or no change in their sustainability assessment between March 2020 and the time of the survey.

Table 2.44: Change in Sustainability Assessment between March 2020 and time of survey by type of childminding service

Type of Service	Decrease	Increase	No Change
Funded ELC service	63%	7%	30%
Service does not deliver funded ELC	57%	14%	29%

106. The survey allowed childminding services to provide further information to explain their sustainability assessments.

107. A range of different issues were covered in these responses. We have grouped these by theme in Table 2.45, and distinguished between funded and non-funded services, and for each group whether they reported: (1) a decrease in their sustainability assessment between March 2020 and now; or (2) an increase or no change in their sustainability assessment between March 2020 and now.

Table 2.45: Themes highlighted by services to support their assessment of sustainability, childminding services

Funded ELC Service -

Decrease in Sustainability Assessment:

• Reduced demand from families and struggling to fill places. Some services indicate that demand is particularly low for places for school age children (and need for wraparound care).
• More flexible working practices, in particular working from home, suggested as a factor for lower demand.
• Some report less demand for places for babies. This can have a knock-on impact for future places as this can evolve into a blended place as children gets older.
• Drawing on savings to maintain service
• Limited, or no, blended placements.
• Indication that some parents currently preferring children to be at nurseries due to time lost during the periods of restrictions.
• Not being able to charge parents when children have to self-isolate and cannot attend service.
• Limited, or no, enquires for ELC places starting in August 2021.
• Some other services, such as playgroups, no longer available.
• Had to invest in capital equipment and funded through bank loans.

Increase or no change in Sustainability Assessment:

• Loss of other childminding services in the local area during the pandemic has meant a waiting list for places at services still open.

Service does not deliver funded ELC -

Decrease in Sustainability Assessment:

• Considering closing their service as demand remains low.
• Income levels and demand for places remains very low (and no demand for some services).
• Lack of enquiries for places.
• Challenges of being located in a rural area.
• Have offered funded hours, but no demand from families for places.
• Level of financial support that they have been able to access has been limited.
• Loss of space in setting (home) as partner now working from home.
• Exhausted after challenging year and extra work to meet requirements of the public health guidance for the sector.
• Incurred debt in order to maintain, and rebuild, business.
• Impact of not being able to charge parents if their child has to self-isolate and is unable to attend.

Increase or no change in Sustainability Assessment:

• Becoming a funded provider will help to provide more stability in income.
• Reliant on support through Universal Credit.