Financial sustainability health check of the childcare sector in Scotland

Overview of the Financial Sustainability Health Check

10. The Health Check has been informed by evidence and analysis from:

• Detailed surveys of childcare providers, with separate surveys for day care of children and childminding services.
• In-depth case study interviews with a range of providers;
• In-depth one-to-one discussions with each the provider representative bodies (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); and
• Analysis of trends in Care Inspectorate registration data.

11. As part of this exercise we have also published updated information from all local authorities on: the sustainable rates that they have set for their funded providers in the private, third and childminding sectors; rates paid for the delivery of the free meal commitment; their approach, in-line with guidance published in April 2019, for setting sustainable rates; and any additional support that has been offered to their funded providers during the pandemic.

12. This paper is intended to be a summary of the key findings from the Health Check. It also sets out the further actions that the Scottish Government will take in partnership with the sector in order to support the recovery from the pandemic and long-term sustainability.

13. Reflecting the diversity of the sector, the size and nature of impacts since March 2020 have varied across different types of services. The key comparisons for day care of children services are between those delivering funded ELC and those not delivering funded ELC; services in the private and third sectors; and those services that deliver only school age childcare. For childminding services we compare between those services delivering funded ELC and those not delivering funded ELC.

14. The Health Check has enabled a wide range of rich data and information to be captured. Alongside this summary report we have published a separate analysis paper which sets out the detailed results from the provider surveys and the analysis of the latest CI registration data.