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

Section 3: Experiences of Childcare Providers

108. This section focuses on the key findings from the case study interviews and the discussions with the provider representative bodies. We capture these findings through broad profiles for the different types of providers set out in Section 2. The profiles bring together a mixture of quantitative data from the detailed surveys and the insights from the in-depth case studies and discussions with the representative bodies.

Representative Body Discussions

109. As highlighted in the main report many childcare services are members of one (or more) of the childcare sector representative bodies in Scotland: Care and Learning Alliance (CALA), Early Years Scotland (EYS), National Day Nurseries Association (NDNA), Scottish Childminding Association (SCMA), and the Scottish Out School Care Network (SOSCN).

110. In addition to representing their members, the representative bodies provide a range of targeted support and advice. They are also reliant on funding from a variety of sources including membership fees, grant support from the Scottish Government, additional targeted services for members, delivery of childcare services (for some bodies), and accessing grant support from other schemes where possible.

111. The Scottish Government Early Learning and Childcare Directorate works closely with the representative bodies, and this engagement increased during the pandemic as we worked to understand the emerging impacts on the sector. They are also members of a range of working groups, including the Childcare Sector Recovery Working Group which played an important role in helping to inform the actions taken to support the wider childcare sector.

112. However, the sector representative bodies have also been impacted by the pandemic. To better understand these impacts we held detailed discussions with each of the bodies. We are very grateful to the representative bodies who gave a significant amount of the time to contribute to this exercise.

113. In addition, as part of our provider case study interviews we also, where relevant, sought the views of providers on the representative bodies of which they are members.

114. The questions asked during these in-depth discussions with the sector representative bodies were based around the following categories:

• Impacts & Finances
• Member Issues, Membership Support & Relationships
• Workforce
• Forward Look

115. Table 3.1 provides a summary of the key points raised across these discussions.

Table 3.1: Main themes highlighted by the sector representative bodies

Impacts & Finances

• The representative bodies have had to significantly restructure the nature of the support and advice that they provide to their members, as they have focused more on COVID-19 related work. As a result they had to pause some of their strategic and development work streams.
• All of the representative bodies have seen a significant increase in the volume of their engagement with members, as the need for support has increased significantly throughout the pandemic.
• There has been a substantial amount of learning since March 2020, as new working practices and solutions have had to be developed.
• There has been a significant financial impact on the representative bodies. For example:
  • All groups have incurred some costs as they have altered the way their organisations operate including having to invest in additional IT equipment, software licenses and online platforms
  • Income has been impacted by a range of factors including: a decrease in membership subscriptions; cancellation of income generating events and face to face services; decrease in trading activities; and loss of dedicated project funding for projects that couldn't go ahead due to COVID-19.
  • Some running costs have decreased, such as travel costs and office spaces, although there have been some savings in moving to online work.
  • All bodies highlighted that core funding provided by the Scottish Government has been static for a number of years despite an increase in ongoing costs and staff salaries.
• Some bodies highlighted that there is a potentially hidden cost from the knock-on effect on other strategic strands of work due to more reactive COVID-19 related work.
• Some elements of funding received from the public sector is variable as it is often tied to particular workstreams or projects.
• Some bodies have accessed furlough or part-time furlough at some point over the past year.

Member Issues, Membership Support & Relationships

• There is a mixed picture in terms of the impact of the pandemic on membership numbers.
• Membership fees for services have generally remained unchanged during the pandemic period.
• More frequent contacts with members, and this has often involved providing emotional support that was not required before.
• There is a sense that more advice and information about business and financial support has been given and has been required (as some members have found it challenging at times to navigate the range of support that has been made available by various bodies).
• There has been an increase in the focus on campaigning and influencing relationships with the Scottish Government and local authorities and other partners.
• The bodies indicated that they were appreciative of their involvement in various groups the Scottish Government created and the opportunity to be 'a voice of the sector'.
• Members really appreciative of the level of support and advice they have received, and the opportunity to have their voice heard in policy development.
• Resources that were produced were also, in many cases, available to non-members as well.

Workforce

• New ways of working such as online networking allowed the representative bodies to reach more members in remote areas, meet more regularly and keep in touch with members and staff.
• The majority of staff across the representative bodies had been working from home since March 2020 (excluding staff that work directly in settings).
• Whilst it has been challenging for staff not being in the same physical location, it has provided new opportunities, including improved use of technology, and there are some cases of staff being connected more than before.
• Staff capacity was hugely impacted as many had to move their focus to reactive, COVID-19 related work.
• Staff have reported being anxious at times and the isolation has been hard for some, and, at times, it has been difficult to maintain work-life balance.
• Online learning to support staff and the sector workforce has been developed.

Forward Look

• Financial sustainability is an increasing concern for the representative bodies with many having to make challenging decisions (in particular where they also operate services).
• The is a willingness to support the sector more and develop new projects and income generating streams – however, core funding will be crucial, including to increase staff capacity.
• For some representative bodies their sustainability rests on their members' sustainability – another closure period and reduced demand on services could have a knock-on effect on the organisations.
• Considerations being given to operational models to ensure financial sustainability going forward, and will continue to look for opportunities to diversify their income streams and focus on growth.

In-depth case study interviews

116. Table 3.2 provides an overview of the participants to the in-depth case studies. The participants covered a variety of provider types, which enabled for a range of issues to be discussed. We are very grateful to the providers who gave a significant amount of their time to contribute to this exercise.

Table 3.2: Overview of contributors to in-depth case studies

Provider Type: Private and third sector day care of children services

Background: 5 providers – including an outdoor setting, mixed provision (some School Age Childcare (SAC) services) of varying sizes and a mixture of urban/rural settings. All of these services delivered funded ELC.

Provider Type: School Age Childcare (SAC) only services

Background: 5 dedicated SAC, of varying sizes and locations (e.g. rural and urban services)

Provider Type: Childminders

Background: 5 childminders – one larger provider. Various locations, including remote & rural settings. Mix of funded/unfunded ELC providers.

117. The questions asked for the case studies were loosely based around six key categories, informed in part by our engagement with the sector. The categories were:

• Impacts & Sustainability
• Business & Financial Support
• Costs & Delivery
• Capacity & Income
• Relationships – Representative Body & Local Authority
• Workforce

118. Questions were tailored to the experiences and circumstances of providers and interviews remained open to topics and issues raised by participants throughout the session. Participants were asked about the general topics, as well as some issues specific to their provider sub-group. Where possible we looked to use case studies to explore some of the emerging themes from the very early analysis of the provider surveys.

Provider Profiles

119. Drawing on the range of evidence and analysis we have presented profiles for different types of providers across the sector in order to highlight variations in impacts. The profiles bring together a mixture of quantitative data from the detailed surveys and the insights from the in-depth case studies and discussions with the representative bodies.

120. Profiles are presented for the following broad categories of provider:

• Day care of children services in the private and third sector delivering funded early learning and childcare (ELC)
• Day care of children services in the private and third sector not delivering funded ELC
• Private day care of children services
• Third sector day care of children services
• Day care of children services that deliver school age childcare only
• Childminding Services delivering funded ELC; and
• Childminding Services not delivering funded ELC.

121. Each profile covers the following areas: Impacts and Sustainability; Business and Financial Support; Costs and Delivery; Capacity and Income; Relationships; and Workforce. Each profile finishes with key considerations for the group of providers.

122. Before presenting the provider profiles we have set out a summary of the key themes that emerged across the majority of provider types. Whilst, as we will highlight, there are variations in the scale and nature of impacts across different types of providers there are also examples where all providers faced similar impacts.

123. Whilst there are challenges and concerns for the sector the evidence from the case studies and the surveys does indicate that many providers have managed to remain sustainable and continue to be positive about their long-term position. However, this has required considerable adjustments, both in service delivery and in managing their finances, throughout the pandemic as they adapted to the temporary closures and ongoing restrictions on the numbers of children in attendance.

124. Some providers have reported however, that the changes to working practices necessitated by public health guidance have been a positive experience, with the majority of participants reporting that relationships with communities and staff have deepened and strengthened with many providers keen to embed these new practices.

125. There are four driving factors across all types of providers that are reported as having a negative effect on sector sustainability and resilience for all providers, and these could, in turn, impact the pace and extensiveness of overall sector recovery:

• Continuing COVID-19 related impacts, such as further restrictions on childcare provision which would negatively impact on delivery costs and significantly reduce income levels; or any further closure periods.
• The continued reduced demand for services – although to varying degrees across different providers – caused by a variety of factors, including increased working from home, staff still being on furlough and a shift in parental attitudes. It is not clear at the moment how many of these factors are temporary and how many will become more permanent structural changes in demand.
• Reduction in, and volatility of, income.
• Retention, Recruitment & Wellbeing of the workforce.

126. In addition, there are specific points relating to certain types of providers:

• Services delivering funded ELC have, in general, reported less significant changes in income and have highlighted the importance of the income that they continued to receive for funded ELC. However, a key challenge has been the funding rate they receive for delivering funded ELC with some indicating that this does not currently cover costs of delivery (and, in particular, the additional COVID-19 costs).
• There are a number of specific challenges for School Aged Childcare services, in particular:
  • The costs associated with, and the lack of control over arrangements, for premises.
  • Working in small separate cohorts of children and staff (often referred to as bubbles and issues over blended placements have caused concern for some SAC services.
  • The declines in demand and income are particularly acute for many SAC services.
  • Concerns regarding the longer-term impact on demand for service, with some indicating that they expect some families to struggle to afford a return to quality SAC services.
• Childminding services – regardless of whether they were delivering funded ELC – highlighted the following specific challenges:
  • Difficulties in providing blended placements due to the impacts from the implementation of public health guidance and the models of blended placement on offer across authorities.
  • Some childminders reported feeling under-valued and unfairly treated at times (compared to nurseries); whilst some indicated that more still needed to be done to promote childminding as an option for funded ELC provision.

127. The following sections set out the broad provider profiles.

Funded early learning and childcare (ELC) services – including day care of children services in both the private and third sector

Impacts & Sustainability

• Income for funded ELC, which continued during the closures period, has been crucial to funded ELC providers, and has helped to keep many businesses solvent.
• Those that stayed open as Key Worker Hubs maintained continuity in terms of relationships (staff & community) and this has for some helped resilience levels.

Business & Financial Support

• Most providers indicated that support from the Coronavirus Job Retention Scheme has been vital to keeping them in business – although almost all have had a full staff compliment back since March 2021.
• Income from statutory ELC hours has been crucial for these providers, for some their income from statutory hours has gone up in 2021 as the 1140 hours roll out continued.

Costs & Delivery

• Salaries have been the largest outgoing for most providers. Funded providers that pay the real Living Wage have felt pressure to increase all wages as a result and many have still done despite the pandemic challenges
• Some providers also highlighted the need to compete with their local authority for quality experienced staff, particularly in terms of salaries. Some highlighted that they felt the sustainable rate offered by authorities for delivery of funded ELC was not sufficient to allow for fair competition in salaries.
• All participants have incurred a wide range of COVID-19 related costs due to a variety of factors including: cleaning hours; cleaning materials and PPE; installing hand washing facilities; adjusting rooms to work in bubbles; investing in outdoor spaces; increased transport costs and heating costs (due to need for increased ventilation).
• Costs of delivery have also risen due to increased staffing to incorporate small consistent cohorts and other operational arrangements in place, and to cover staff absences.

Capacity & Income:

• Many settings have been operating below capacity due to restrictions on childcare provision and positive COVID-19 cases.
• Those services who also offered school age childcare provision indicated that changes in working patterns (in particular more people working from home) and flexibility of working hours could lead to other forms of childcare, such as informal childcare, becoming appealing to some families.
• Summer months are generally quieter income-wise for many funded providers.

Relationships:

• Some providers felt that partnership working has been negatively impacted since that start of the pandemic. The main feedback was that local authorities (ELC teams and other departments) did not maintain adequate communications with the sector at times during the pandemic.
• However, there were also some examples of continued positive relationships between services and local authorities.
• All case studies participants were members of at least one representative body.
• In addition to their representative body, many providers use local forums and other support groups to share information and best practice.

Workforce:

• Some providers we spoke to expressed their ongoing concerns around staff retention and losing qualified staff to local authority nurseries, as well as increased recruitment costs.

Key considerations:

• For funded providers, a key determinant of sustainability will be the level of funding that they receive from their local authority for delivering funded ELC.
• The case study participants emphasised the importance of a fair and equal funding rate from their local authority to be able to meet living wage commitments and help with training costs. Some providers have also highlighted that the funded income level should increase annually to match at least the percentage increase of wage costs due to real living wage increase.
• Concerns remain about cash flows/reserves if another period of restrictions become necessary, especially as the support from the Coronavirus Job Retention Scheme ends (in September 2021).
• Participants have also expressed a need for clarity in terms of the timeline around restrictions to plan effectively for the future.
• All providers rely on parents returning to work and increasing their demand for services going forward to remain sustainable.

Day care of children services not delivering funded ELC

Impacts & Sustainability:

• Working in small separate cohorts of children and staff (often referred to as bubbles) and issues over blended placements have caused concern in some way for most case studies participants.
• Many providers have reported a reduction in demand – this is particularly acute for some providers with a school age childcare element to their service as working environments and flexibility of hours have changed.
• A few non-funded providers have mentioned a loss of nursery aged children accessing their service who now are able to access care at the local authority nurseries for the full 1140 hours.

Business & Financial Support:

• Many providers have drawn on support from the Coronavirus Job Retention Scheme; whilst the Transitional Support Fund and Temporary Restrictions Fund have provided support as well, although overall have had a smaller impact than the furlough scheme on business sustainability.

Costs & Delivery:

• Providers have reported higher staff costs as they have had to meet increases in the National Minimum Wage and the National Living Wage increase.
• The consequence of implementing bubbles coupled with a drop in demand have directly affected capacity for many – and has a doubly negative effect, as staffing levels do not reduce in line with number of children, resulting in less income but higher staffing cost per hour.
• COVID-19 related costs, particularly due to increased cleaning, have been felt by all participants.
• Some have reported an increase in snack costs due to more single-use, convenient foods that reduce contamination risks.
• Most reported that they had not introduced increases in session charges, as they felt this wouldn't be right during the pandemic.

Capacity & Income:

• Many providers have been operating at a lower occupancy levels due to restrictions.
• There has been a reduction in children attending for various reasons, mainly due to parents either working from home or being on furlough.
• Other forms of income generation have been lost due to the pandemic (such as private lets).

Relationships:

• Strong consensus on sectoral gratitude for their representative bodies - providing support and helping to disseminate important information has been invaluable.
• Human Resources (HR) support and improving financial knowledge most often cited as areas where the sector would like to see more support.

Workforce:

• Participants reported some ongoing concerns around staff retention and losing qualified staff to local authority nurseries.
• Majority have accessed some sort of online Learning and Development (L&D) resources and now looking to undertake face to face training once possible (such as First Aid); all employed new channels of communication and increased use of technology.

Key considerations:

• For non-funded providers, further COVID-19 restrictions and/or closures would have a largely detrimental impact on their sustainability, particularly if coupled with the furlough scheme ending and the need to meet deferred tax payments and loans.
• Important that services are given sufficiently advanced notice as to when changes to restrictions are required to aid with planning and promotion of services to increase occupancy levels
• Low demand remains the main concern, including for Holiday Club sessions and school age childcare provision.
• Some providers highlighted that targeted funding may be required to help them remain open until demand increases with the return of parents to workplace and further education settings.
• Participants were also apprehensive about a potential increase in their running costs (including a rent increase by their local authority), whilst they largely feel unable to increase their own prices as parents would find it unaffordable.

Services delivering school age childcare (SAC) only

Impacts & Sustainability:

• General reduction in demand as working environments and flexibility of hours have changed.
• In addition, SAC services have faced challenges not always as prevalent in other parts of the sector including, for some services, a lack of autonomy over access and reopening of premises.
• Drop in demand has been particularly acute for some SAC services.
• There is a distinct difference based on type of premises – rent and ability to control environment is a significant factor for these providers.

Business & Financial Support:

• Many SAC providers have drawn on the Coronavirus Job Retention Scheme (CJRS), with some continuing to do so, due to longer restrictions on their services and, to a smaller extent, on the Transitional Support Fund (TSF) and the Temporary Restrictions Fund (TRF, Round 3).
• Some reported not applying for the TSF (as they were closed, unaware or pre-occupied dealing with reopening and navigating guidance).

Costs & Delivery:

• SAC providers tied in to costly contracts have been negatively impacted.
• The staff costs have increased per child due to the requirement for bubbles, as well as increases in the statutory National Living Wage.
• Increased running costs (rent increases annually for many) and COVID-19 related costs, some providers made changes to premises for reopening.

Capacity & Income:

• Drop in income reported by most SAC providers over the past year reflecting lower demand.
• A sense that parents or carers of school age children are more likely to allow their child to come home at the end of school whilst they work from home or make alternative informal arrangements.

Relationships:

• All SAC participants expressed gratitude for their sector representative bodies who have been providing support and helping to disseminate important information throughout the pandemic.

Workforce:

• SAC services, who had to close for longer, felt more detached and resilience fluctuated more among staff.
• SAC participants reported a bigger focus on wellbeing during the second lockdown due to winter time and local restrictions in place.

Key considerations:

• Continued low demand and cost of premises remain the key concerns for SAC providers. In particular, it is not clear the degree to which the current impacts will be temporary or whether some will become permanent and result in changes in demand for SAC services.
• Some participants felt that parents and carers might require financial support to go back to quality SAC if parental income is squeezed due to furlough or self-isolation.
• Worries around further COVID-19 restrictions and/or closures and their potential impact on cash flows – as there is no security blanket for many providers and the Job Retention Scheme is ending in September 2021.
• Some participants indicated that funding may be required to help SAC services to stay open until demand improved with the return of parents to workplaces. Reserves across services are low and ability to replenish funds are restricted.
• Some concerns around the Scottish Government's plans for funded before and after school care provision – views that replicating the ELC model could be beneficial, and that a potential over-reliance on future local authority provision could have negative consequences for private, third and childminding sector services.

Private sector day care of children services

Impacts & Sustainability:

• A small number of participants in this sub-category reported that they were able to turn around a profit during the pandemic.
• Operating models had to adapt and many are still not back to pre-pandemic patterns of demand.
• There was a substantial increase in outdoor activity.
• Providing critical childcare allowed private providers to maintain continuity in terms of relationships with staff and community, and even generated new business for some participants.

Business & Financial Support:

• Private sector services who deliver funded early learning and childcare (ELC) have been protected more due to continued ELC payments during closure periods.
• Providers reported that the Coronavirus Job Retention Scheme has helped them to stay in business.
• All case study participants reported that they have accessed support through the Transitional Support Fund and / or the Temporary Restrictions Fund.

Costs & Delivery:

• Increased running costs due to additional staff to cover bubbles
• Increased hygiene measures and the costs of products associated with that, such as PPE and cleaning materials coupled with increase in costs from suppliers
• Reported wear and tear on outdoor equipment happening more quickly due to increased use
• Salaries have been the largest outgoing in this sub-category as well, especially for providers paying the real Living Wage to their staff.

Capacity & Income:

• Negative impact of bubbles on larger settings in terms of the capacity they can operate at.
• Most did not increase charges for families, as felt this wouldn't be right during the pandemic.
• Lower demand for before and after school care due to new working patterns and parents working from home.
• Uncertainty over summer provision has been hard.

Relationships:

• Mixed picture in terms of partnership working between funded private providers and their local authorities. Some participants highlighted that their local authorities did not maintain adequate communications with them during the pandemic
• Some issues remain about the lack of consistency on the setting of rates for delivering funded ELC and the payment processes operated by local authorities.
• General consensus on gratitude for their representative bodies, although some felt that the sector would be better served by a single representative body.

Workforce:

• Staff have been largely resilient, although participants reported issues with staff wellbeing throughout the pandemic.
• Staff retention reported as an ongoing issue for many, as providers continue to lose employees to local authority nurseries. Rate of pay is a crucial consideration for these providers in order to maintain quality.

Key considerations:

• Need to continue operating with a high-occupancy rate to remain sustainable.
• Easing of COVID-19 restrictions, such as removal of bubbles and clarity around timescales for lifting restrictions have been highlighted by private providers as key factors impacting on future sustainability of their services.
• Further lockdowns or closures in particular without the government support combined with the removal of the Coronavirus Job Retention Scheme would be expected to have a detrimental effect on these providers.
• The job market has a great impact on their sustainability, parents returning to work and higher demand remain crucial.
• For funded private providers the sustainable rate that they receive from their local authority is a key consideration.
• Further loss of qualified staff to local authority settings is a concern, particularly if services are unable to recruit suitably qualified staff to replace them.
• Increase in general costs (including rent) but inability to increase own prices as parents would be expected to find it unaffordable.

Third Sector day care of children services

Impacts & Sustainability:

• There is a sense that providers have risen to the challenge presented by the pandemic.
• Providers expressed a strong sense of duty towards children and families throughout the pandemic and reported considerable learning, which allowed them to develop new working practices that have improved service delivery.

Business and Financial Support Measures:

• A relatively small number of third sector providers have been able to access a wider range of business and financial support measures in addition to the Coronavirus Job Retention Scheme and the targeted support for childcare providers provided by the Scottish Government (TSF and TRF).

Costs & Delivery:

• Increase in staff wages to meet adult: child ratios and due to increased infection control practices; higher salaries due to real Living Wage and to compete with LA salaries.
• Increase in cleaning costs and PPE; use of Staff bank if/when staff had to self-isolate.
• Increase in lets and running costs.

Capacity & Income:

• Grant funding from local authorities is an important source of income for third sector organisations.
• There have been fluctuations in demand, and cancellation of sessions due to new working patterns and working from home.
• Operating at reduced capacity due to working in small consistent cohorts (bubbles).
• Other forms of income generation have been lost due to the pandemic (such as fundraising and sponsored events).

Workforce:

• Reported that the workforce is exhausted but the resilience shown and the dedication of the staff has been commendable.
• Often embedded in communities and seen by users as more than just childcare providers – ties can be stronger.

Key considerations:

• Continuation of grant funding will be crucial to subsidise costs incurred by third sector organisations.
• Voluntary providers keen to bring back other forms of income generation, such as fundraising activities.
• Need to see increases in numbers of children, but expected to be dependent on what happens with parents working patterns, including how many continue to work from home.
• Removal of bubbles and no further restrictions or lockdowns.
• Staffing a big concern – no finances for many providers to compete with local authority settings in terms of salaries, and worried about losing qualified staff to local authority settings.
• Many reported increases in rent charges and other running costs.
• Some expressed concerns around the furlough scheme ending while demand was still below pre-pandemic levels.

Childminders delivering funded Early Learning and Childcare

Impacts & Sustainability:

• Increase in the number of childminders concerned about their business sustainability.
• Interpreting and implementing guidance and surviving closure periods consumed most participants time.
• Childminders reported additional hours of paperwork and enhanced cleaning at the end of the working day and at weekends.
• Some childminders indicated that they felt forgotten, with the perception that they do not have as much support from Government and local authorities as day care of children services.
• Outdoor activity has increased at every setting type, including childminding services – which has been positive in many ways.

Business & Financial Support:

• Childminders delivering funded ELC benefited from income from statutory hours

• Most childminders have drawn on the Self-Employment Income Support Scheme – although many received a lot less than what they would normally see in terms of earnings. Some also highlighted that they felt that the SEISS provided lower support compared to the Job Retention Scheme, which other childcare services could access for their staff.
• The case study participants expressed their disappointment that childminders were not eligible to apply for the Transitional Support Fund in 2020.

Costs & Delivery:

• All childminders reported that they are spending more money and time on cleaning their premises.
• Many have invested in outdoor provision, clothing and resources.
• Most did not increase charges for families, as they felt this wouldn't be right during the pandemic.
• All incurred additional running costs (heating, electricity, food costs), and higher insurance costs.
• For some childminders accurately estimating costs and the impact this has on delivery was a significant challenge.

Capacity & Income:

• Participants reported fewer children attending due to parents working from home or on reduced hours, fewer school age children attending, and fewer nursery pick-ups.
• Despite being able to open fully earlier than the rest of the childcare sector, some childminders indicated that they operated at a lower capacity upon reopening reflecting, in particular, restrictions and attitudes towards blended placements.

Relationships:

• All childminders we spoke to were members of a sector representative body and found their support and advice to be invaluable.
• Childminders mentioned experiencing some difficulties with the Care Inspectorate and local authorities regarding inspections and paperwork. The tendering process for becoming a funded ELC provider was also raised as being challenging by some.

Workforce:

• Childminders who participated in the case study expressed a clear sense of duty towards children & families with many embedded in local communities through generations.

Key considerations:

• Impact of requirements to self-isolate on childminding services, and challenges accessing support in these situations. Unlike a day care of children service that may still be able to partially open a childminding setting will most likely have to completely close.
• Concerns remained regarding potential further periods of restrictions in the future.
• Some childminders indicated that they required more clarity on the advice issued by the Competitions and Market Authority (CMA) regarding when they could continue to charge parental fees when children were unable to attend.
• There is a need to attract more children, especially those below school age, to attend childminding services will be crucial to supporting sustainability
• Concerns regarding reduced take up of blended funded care option due to a lack of promotion of available funded childcare models for families in some local authority areas.
• Closer relationships are required with local nurseries to obtain the best situation for learning for children with hours attended at each setting - it's often not financially viable for a childminder to just provide half days and wrap around care for funded children.

Childminders not delivering funded ELC

Impacts, Sustainability & Relationships:

• There has been an increase in the number of childminders concerned about their business sustainability.
• Some childminders reported losing children to local authority nurseries where they now access the expanded funded early learning and childcare (ELC) entitlement.
• They also highlighted that more time had to be invested to keep up with changing regulations combined with lower levels of support from their local Council.

Business & Financial Support:

• No income from statutory ELC payments to sustain their services during period of lower demand and temporary COVID-19 restrictions.
• There was disappointment that childminders were not eligible for the Transitional Support Fund or that childminding services not delivering funded ELC could not access the Winter Clothing Fund.

Costs & Delivery:

• It was indicated that before and after school care is often not financially viable for some childminders.
• Some childminders indicated that they found it difficult to estimate their costs of delivery, in particular on a cost per hour basis (even if they often charged families per hour).
• Some services anticipated that they would lose more children if they put their rates up at present.

Capacity & Income:

• Many reported losing some of their children and lower demand as families do not currently require the same level of childcare as before the pandemic, as well as fewer preschool children combined with only being able to access limited financial support.
• Some childminders feel they need to offer competitive hourly rates for childminding in order to compete with other forms of childcare, such as playgroups and after school clubs, in their local area.

Key considerations:

• Childminders highlighted that they require more financial support, especially as the UK-wide Self-Employment Income Support Scheme (SEISS) is ending. Some indicated that they didn't feel as though the level of support offered to childminders was equitable when compared to what was available to other childcare services.
• Some childminders indicated that there should be greater emphasis on the clear differences between service types, including reflecting the sole nature of childminding and being mindful of the ability of childminding services to meet similar reporting requirements as other childcare services.
• Some highlighted that it would be difficult for their business to carry on if they were to lose any of their children to a local nursery or if they experienced a further sustained period of low demand for their services.
• Another lockdown, further restrictions, parents losing jobs or increased use of informal childcare are also major concerns for these childminders.