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Many parts of the childcare sector operate under a mixed economy model where they receive income from different sources, including directly from their local authority to support the delivery of funded early learning and childcare (ELC). For example, the 2023 Financial Sustainability Health Check reported that public funding accounted for, on average, around 46% of overall income for private childcare services who delivered funded ELC.

The payment of sustainable rates to providers delivering funded ELC is vital to the financial sustainability of these providers.

This is why the Scottish Government and COSLA undertook a joint Sustainable Rates Review in 2023. Through evidence from providers and local authorities, it identified a risk that some providers were not being as effectively supported as others by rates at the time of the review.

To address this, work is underway to improve the data available to inform funded ELC rates-setting by local authorities. The Scottish Government has contracted the Diffley Partnership to undertake a new funded ELC cost survey. The findings will inform future sustainable rates-setting and the Scottish Government and COSLA’s future financial planning.

While work is underway to improve rates-setting processes, the childcare sector in Scotland has been impacted significantly by the UK Government’s unilateral changes to employer National Insurance Contributions. We estimate that these changes will add £5 million per year to funded providers’ costs for the delivery of funded ELC (with higher additional costs expected for the whole of the childcare sector).

The Scottish Government called on the Chancellor to fund these costs in full, including the costs for commissioned services such as ELC, but she has failed to do so. The additional funding of £339 million being provided by the UK Government falls far short of the estimated additional costs and means that public services in Scotland still face a £400 million shortfall.

I refer the member to the answer to question S6W-38244 on 17 June 2025. All answers to written Parliamentary Questions are available on the Parliament's website, the search facility for which can be found at https://www.parliament.scot/chamber-and-committees/questions-and-answers.

Youth work falls within the scope of The Requirements for Community Learning and Development (Scotland) Regulations 2013. This regulation, in effect, requires local authorities to identify need and plan provision of Community Learning and Development in their areas.

As the regulatory requirements for Community Learning and Development are placed with education authorities, the Scottish Government does not collate information on youth workers.

The Scottish Government monitors trends across the whole childcare sector, drawing on data published by the Care Inspectorate. In recent years the Scottish Government has published financial sustainability health checks and the Sustainable Rates Review, which have considered issues relating to the financial sustainability of the sector.

Under the Business Sustainability criteria in the National Standard for funded ELC, providers are required to demonstrate to the local authority that they are financially viable. If a service delivering funded ELC was at risk of closure due to financial difficulties, they would therefore be obliged to make their local authority aware.

The national funded ELC cost survey that is currently being carried out by the Diffley Partnership on behalf of the Scottish Government and COSLA will help to ensure that our long-term investment to support the setting of sustainable rates is informed by a robust and reliable evidence base. The findings will be shared with local authorities and the sector later in 2025.

The Care Inspectorate collects and publishes data on service cancellations and registrations (available here: Statistics and analysis).

Figure 8 of the Care Inspectorate’s 2023_Early_learning_and_Childcare_Statistics.pdf shows service cancellations for childminding services and day care of children services for the period 2014 to 2023.

The Scottish Government drew on Care Inspectorate data to inform the most recent Financial Sustainability Health Check, published in July 2023. This included an analysis of annual cancellations across the whole childcare sector for the period March 2019 to March 2023, and provided a more detailed breakdown of cancellations by type of provider for this period. This information is set out in Table 1.10 of the Section 1: Recent Trends in the Childcare Sector - Financial Sustainability Health Check of the Childcare Sector in Scotland: Analysis and Evidence - gov.scot.

A breakdown of cancellations by local authority area can be produced using data available from the Datastore.

I refer the member to the answer to question S6W-38244 on 17 June 2025 All answers to written Parliamentary Questions are available on the Parliament's website, the search facility for which can be found at https://www.parliament.scot/chamber-and-committees/questions-and-answers.

The Scottish Government monitors trends across the whole childcare sector, drawing on data published by the Care Inspectorate. In recent years the Scottish Government has published financial sustainability health checks and the Sustainable Rates Review, which specifically considered the contribution of local authority sustainable rates to funded providers’ financial sustainability.

It is important to note that funded ELC is often delivered in a mixed economy model. The payments that providers receive from local authorities to deliver funded ELC therefore only form part of their total income. For example, the 2023 Financial Sustainability Health Check reported that public funding accounted for around 46% of overall income for private childcare services who delivered funded ELC.

The joint Scottish Government and COSLA Sustainable Rates Review identified a need to improve rates-setting processes to better support provider sustainability. As part of the evidence gathering phase of the review local authorities did however report that “they had seen very little evidence of funded services in the private, third or childminding sectors reporting to them that they had been under financial duress or of services closing due to financial sustainability pressures”.

The Scottish Government and COSLA are continuing to progress the reforms from the Sustainable Rates Review. This includes improving the data available to inform funded ELC rates-setting by contracting the Diffley Partnership to undertake a new funded ELC cost survey. The survey findings will inform future sustainable rates-setting and the Scottish Government and COSLA’s future financial planning.

Further information about support available to ELC providers, including the Nursery Rates Relief Scheme, which provides 100% relief on Non-Domestic Rates to eligible day nurseries in Scotland and is estimated to be worth around £11 million a year, is available on the Scottish Government website.

Youth work falls within the scope of The Requirements for Community Learning and Development (Scotland) Regulations 2013. This regulation, in effect, requires local authorities to identify need and plan provision of Community Learning and Development in their areas.

As the regulatory requirements for Community Learning and Development are placed with education authorities, the Scottish Government does not collate information on youth centres.

Capital funding for the play park renewal programme is distributed to all 32 Local Authorities based on population of 0-14 year olds and rurality. In the first year, the formula was:

1.95% on population 0-14

2.5% on rurality

From 2022-23, the formula was:

1.93% on population 0-14

2.7% on rurality

The full table of allocations to each local authority by year is:

The £60 million play park renewal funding is allocated to local authorities to use across their whole play estate. It is the responsibility of individual local authorities to manage their own budgets and to allocate the total financial resources available to them based on local needs and priorities. The Scottish Government recognise that the extent of renewal and refurbishment will be influenced by local plans and investment priorities and engagement with children and young people.

The Scottish Government does not hold data centrally on the geographic and socio-economic spread of play parks within local authority estates.