Current status: Answered by Natalie Don on 11 June 2024
To ask the Scottish Government what long-term strategies are being developed to ensure the financial viability and sustainability of nurseries.
The Scottish Government is committed to supporting a diverse, sustainable and thriving childcare sector.
For those providers in the private and third sector, including childminders, who deliver funded early learning and childcare (ELC) the payment of sustainable rates by local authorities is vital to supporting their financial sustainability and to enabling the delivery of high quality ELC. Rates have increased substantially since the implementation of the ELC expansion to 1140 hours – with the average rate paid by local authorities to providers for delivering funded ELC to 3-5 year olds increasing by 64.1% between 2017 and 2023, from £3.68 per hour in 2017-18 to £6.04 per hour in 2023-24.
However, while the average rate has increased, there remains variation in the rates paid across Scotland. That is why the Scottish Government will continue to look for opportunities to strengthen the current system, including taking forward the recommendations of the joint Scottish Government and COSLA Review of Sustainable Rates Early learning and childcare: sustainable rates review - gov.scot (www.gov.scot) , published in December 2023. The evidence-based review recommends a wide-ranging set of actions, which are currently being progressed, to strengthen the process for setting rates.
In 2024-25 the Scottish Government has provided local authorities with an additional £16 million to enable staff delivering funded ELC in the private, and third sector to be paid at least £12 per hour from April 2024. To support this commitment joint Scottish Government and COSLA guidance Funding Follows the Child and the National Standard - Funded early learning and childcare (ELC) - setting sustainable rates 2024 to 2025: guidance - gov.scot (www.gov.scot) sets out our shared commitment to increasing rates for all funded ELC providers by at least 7.6% in 2024-25.
To support the sustainability of the overall childcare sector the Scottish Government has legislated to continue the Nursery Rates Relief Scheme, which provides 100 per cent relief on Non-Domestic Rates to eligible day nurseries; made more than £35 million of dedicated financial support available to providers during the pandemic; and funded pilot programmes of targeted Business Gateway support to enable childcare providers to access tailored, specialist advice on strengthening their businesses.
As set out in Best Start: Strategic early learning and school age childcare plan for Scotland 2022-26 (careinspectorate.com) we will maintain a robust but proportionate means of monitoring the financial sustainability of the childcare sector to ensure that both national and local policy is informed by up to date evidence about the health of the sector. This includes through the Financial Sustainability Health Checks. The most recent Financial Sustainability Health Check of the Childcare Sector in Scotland - gov.scot (www.gov.scot) was published on 31 July 2023 and sets out a programme of actions, across a number of areas, to support the long-term sustainability of the sector.