Financial Sustainability Health Check of the Childcare Sector in Scotland

Developments since the 2021 Financial Sustainability Health Check

13. A range of actions were taken following publication of the Health Check report in August 2021, as set out below. Alongside this, there was an ongoing assessment of the financial sustainability of childcare providers. This included considering the financial implications of any further significant public health Covid-related restrictions to be introduced in the future.

Childcare Sector Omicron Impacts Fund

14. In Winter 2021, a rapid surge of the Omicron variant created operational challenges and significant financial implications for childcare services. In January 2022, case rates and absence levels in the childcare sector were higher than at any previous point in the pandemic.

15. In addition to experiencing acute staff absence, loss of income from children self-isolating and temporary closures due to staffing and isolation, the sector had been impacted by the requirement for home-working, which reduced demand for school age childcare services in particular.

16. In recognition of the very challenging circumstances in which childcare sector providers were operating during the Omicron wave, and following the substantial targeted financial support made available to childcare providers since March 2020, the Childcare Sector Omicron Impacts Fund was introduced. This made up to £9.8 million of support available to the sector in March 2022. The Fund was aimed at mitigating some of the financial impacts that services experienced as a result of these conditions including loss of income due to temporary partial and full closures due to staff and children self-isolating.

17. Grants were available to all private and third sector day care of children services and all childminding services registered with the Care Inspectorate on 31 December 2021, including school age childcare services. A total of 4,639 grants, with a total value of £8.02 million, were paid to registered services through the Fund. As with previous COVID financial support for the sector, grant amounts varied according to the size of their service. Grants ranged from £950 to £4,500.