Financial sustainability health check

Financial sustainability health check of the childcare sector

The period since March 2020 and the onset of the impacts of COVID-19 has been challenging for the childcare sector, as it has been for many other sectors of the economy.

We published the financial sustainability health check in August 2021. The health check collected evidence on the sustainability of the childcare sector in Scotland, in particular in light of the impacts of COVID-19. The exercise have also captured information on the impact of the range of financial support that has been made available.

The health check was informed by evidence and analysis from:

  • detailed surveys of childcare providers
  • in-depth case study interviews with a range of providers
  • discussions with childcare provider representative bodies
  • analysis of trends in Care Inspectorate registration data

The findings were published on 31 August 2021 and set out in Financial sustainability health check of the childcare sector in Scotland.

Alongside this a supporting analysis and evidence paper has also been published.

We are working with the sector and delivery partners to progress the series of actions set out in the health check to enable recovery and to support the long-term sustainability of the sector, including:

  • funding a pilot programme of targeted business gateway support for childcare services most likely to be experiencing significant sustainability challenges
  • working with COSLA and local authorities to strengthen the process for local authorities to set sustainable rates for providers delivering funded early learning and childcare

We continue to monitor the sustainability of the childcare sector and explore options for further support to the sector, working within the limited resources available.

Childcare Sector Representation and Sustainability Fund

In August 2022, the Childcare Sector Representation and Sustainability Fund provided the opportunity for childcare sector representative organisations in Scotland, who met the eligibility criteria, to apply for funding for the two-year period 2023-24 to 2024-25 to support the delivery of their representative functions and to enable them to strengthen their long-term sustainability.

This followed the commitment in the health check to review how the impact of the core funding that childcare sector representative organisations currently receive can be maximised to support outcomes for children, childcare services, and the long-term sustainability of the representative bodies.

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