Financial sustainability
Support for childcare providers
A range of business support is available through Business Gateway. Business Gateway have local offices all over Scotland and you can contact your local office for more information.
Support for third sector organisations
Just Enterprise is a Scottish Government-funded programme for the third sector in Scotland which provides a range of business support, training and information for third sector organisations and social enterprises. The majority of the services are entirely free to access.
Find more information on the Just Enterprise website.
Day Nursery Relief
Premises in Scotland that are used wholly or mainly as a day nursery can apply for 100% relief from non-domestic rates (NDR). Non-domestic rates are paid by business, public sector and third sector organisations unless exempt.
To access this relief your premises must be used only as a nursery school or mainly as a nursery school. You can check with your local council to see if you're eligible or to apply. More information can be found at Day Nursery Relief.
HMRC guidance on the Employment Allowance
The UK Government has published additional guidance on the Employment Allowance for childcare providers. This includes clarifications on eligibility and how the allowance applies to early years providers. For any further inquiries regarding the guidance, please contact HMRC directly.
Sustainable rates for providers delivering funded early learning and childcare
Private, third sector and childminding providers can enter into contract with their local authority to deliver funded early learning and childcare (ELC). Providers will be paid a sustainable rate for each hour of funded ELC that they deliver.
Joint Scottish Government and COSLA guidance for local authorities to set sustainable rates in 2026 to 2027 was published on 16 March 2026. The guidance confirms that in 2026-27 local authorities will apply a minimum increase of 5.2% to all 2025-26 sustainable rates. This minimum increase passes onto providers the additional funding from the Scottish Government to enable childcare workers delivering funded ELC in private and third sector services to be paid at least the Real Living Wage from April 2026.
The minimum increase will also apply to the sustainable rates paid to childminders who deliver funded ELC.
Sustainable rates data collection 2025 to 2026
Each year, we collect and publish data on the sustainable rates local authorities pay to private, third sector, and childminding providers for delivering funded early learning and childcare (ELC). The latest report – sustainable rates for funded providers: 2025 to 2026 – sets out information provided by local authorities on the sustainable rates they have set for 2025-2026.
Previous reports were published for 2024-25, 2023-2024, 2022-2023, and 2021-2022 (which includes data for 2020-2021).
Sustainable rates review
The Scottish Government and COSLA published the early learning and childcare: review of sustainable rates in December 2023. The Review examined the approach to setting sustainable rates for providers of funded ELC in the private, third and childminding sectors during 2022 to 2023.
The review recommended long-term reforms to improve the existing sustainable rates process. This includes a requirement to introduce greater standardisation in the rates setting process.
To support this a Sustainable Rates Review Implementation Working Group was created which brings together sector and local government representatives, alongside Scottish Government ELC policy representatives and COSLA. Its main role is to inform the approach taken to collecting robust and reliable data on the costs of delivering funded ELC in private, third, and childminding sector providers.
Funded ELC costs survey
A key commitment from the 2023 joint Scottish Government and COSLA Sustainable Rates Review was to improve the data available to inform funded ELC rates-setting by local authorities. To support this, a new funded ELC costs survey was designed by the Diffley Partnership in collaboration with sector representatives and local authorities. The survey took place in Summer 2025 and was open to all private and third sector providers delivering funded ELC, with a separate survey developed specifically for childminding services.
We are grateful to all those providers and local authorities who gave their time to support the development of the surveys and participated.
A report and supporting dataset were published on 17 March 2026. They provide a detailed snapshot of the costs associated with delivering funded ELC in Scotland, as reported by providers.
Financial sustainability health check
We previously carried out financial sustainability health checks to inform understanding of the impact of economic developments on childcare providers to ensure policy is informed by evidence. We published the last financial sustainability health check in July 2023.
Evidence was collected on the sustainability of the childcare sector, in light of the costs crisis, workforce pressures and the lasting impacts of the pandemic. A supporting analysis and evidence paper was published.
A previous financial sustainability health check (first edition) was published in August 2021. We will continue to monitor trends across the childcare sector.