Funding follows the child and the national standard for early learning and childcare providers: guidance on criteria 7 - business sustainability

Annex A: Care Inspectorate Registration Financial Information

Initial Registration

58. The Care Inspectorate needs to be satisfied, prior to granting registration, that any proposed new care service has appropriate funding in place and has taken steps to ensure its financial viability.

59. Applicants for registration declare, in their application, that they are neither subject to sequestration or bankruptcy nor have they granted a trust deed for the benefit of their creditors. They must declare that they have not been disqualified as a company director. Making a statement that is knowingly false or misleading on application is an offence.

60. Note: Based on a high level financial risk assessment, financial viability is not assessed for applicants who register as childminders, nor for applications made by local authorities.

61. Financial risk assessment is performed at the point of registration. The assessment is based on the applicant’s experience, any history they may have as a reputable provider, evaluations of any other services registered by the applicant, type of service to be provided and funding. The assessment informs the intensity of financial viability review to be undertaken.

62. To assess financial viability, applicants are required to submit a business plan, cash flow forecast and a financial reference to support their application to register a care service. The Care Inspectorate has powers to require this information under section 59(2)(c) of the Public Services Reform (Scotland) Act 2010 (the Act) which states in relation to applications for registration that an applicant must ‘give any other information which the Care Inspectorate may reasonably require the applicant to give’.

63. It is vital that the Care Inspectorate ensures that applicants have addressed and understood the financial implications of establishing and providing a sustainable care service.

64. The Care Inspectorate’s internal key performance indicator for registration applications is a period of 6 months from receipt of a competent application to registration for all services, apart from childminders for whom it is 3 months. Legislation requires 3 months advance notice for submission of variations.

Business Plan

65. As mentioned above, to assess financial viability, any applicant to register a care service is required to submit a business plan as part of their application. A good business plan should aid the Care Inspectorate’s understanding of the proposal and there are certain fundamental topics that they would expect to see included:

Background

• History and background of applicants
• Aims and objectives of the individuals in setting up the business
• Ownership structure and details of associated businesses

Management & Staff

• Detailed CVs of proposed managers & senior staff

Market Research

• Location of proposed business
• Hours of operation
• Services / facilities to be provided
• Competition

Financing & Capital Investment

• Capital Investment required
• Funding sources
• Premises – leased / owned

Operating Assumptions (supporting the financial forecasts)

• Proposed weekly fee rates
• Proposed staff grades & ratios per child placed
• Proposed pay rates
• Overheads – rent, rates, insurance etc.

66. The list is not intended to be exhaustive and it is not expected to see each of the categories listed in every business plan received.

67. Any gaps in the information provided which affects the Care Inspectorate’s understanding of the proposal should be raised with the applicant and noted separately.