Current status: Answered by Natalie Don on 11 June 2024
To ask the Scottish Government what early warning systems are in place to identify any nurseries that are at risk of closure due to financial difficulties or staffing shortages.
Under Funding Follows the Child, all nurseries who deliver funded early learning and childcare (ELC) must, as part of the criteria in the National Standard for all ELC providers Section 2: The National Standard for all Early Learning and Childcare Providers - Funding Follows The Child and The National Standard for Early Learning and Childcare Providers: Operating Guidance - gov.scot (www.gov.scot) , be able to demonstrate that they are financially viable providers and that they have a sustainable staffing structure in place which meets the recommended adult: child ratios.
Local authorities are responsible for assessing and monitoring compliance with the National Standard in all funded providers, as part of their contract management arrangements and in their role as guarantors of quality. With regards to business sustainability, services delivering funded ELC must ensure that they are able to demonstrate – when required – that their business model continues to be financially viable through the provision of appropriate financial information, for example, accounts and business forecasts/projections. A Business Continuity Plan must also be in place.
If a service delivering funded ELC was at risk of closure due to financial difficulties or staffing shortages then it is expected that they would make their local authority aware of these challenges.
The Scottish Government monitors trends in sustainability and staffing across the overall childcare sector, including through the Financial Sustainability Health Checks. Analysis in the most recent Financial Sustainability Health Check: Financial Sustainability Health Check of the Childcare Sector in Scotland - gov.scot (www.gov.scot) published on 31 July 2023, reported that annual cancellation rates for private and third sector services over the period March 2020 to March 2023 were at similar levels to previous years.