Business sustainability and support for childminders
The pandemic has had a negative impact on businesses across Scotland. It has resulted in childminders, as with many other childcare providers, having concerns regarding their financial sustainability. In order to support recovery, and provide choice and flexibility to families, it is vital to have a financially sustainable childcare sector.
The evidence, including surveys of providers undertaken in June 2020 by both the Scottish Government and the SCMA, indicates that childminders, as with other providers, have experienced significant pressures on their incomes. The declines in income for childminders reflect both general reductions in demand from families, as well as reduced opportunities for offering some models of delivery such as blended models.
However, in contrast to other providers the evidence indicates that the specific reopening guidance for childminders did not result in the additional cost pressures that other childcare settings were facing from their reopening guidance. For example, a Scottish Government survey of providers over the period 19-24 June, found that whilst 79% of day care of children respondents to the survey reported that they expected their costs to increase as a result of the reopening guidance. In contrast 65% of childminders who responded indicated that they either expected no change in costs or for costs to decrease. The SCMA found "broadly comparable" results in a survey that they ran in late June 2020.
Childminders may have been able to access support to cover some of their lost income through schemes such as the Self Employed Income Support Scheme or the Newly Self-Employed Hardship Fund, the Scottish Government. In addition, for those childminders delivering funded ELC, they will have benefitted from local authorities continued payments for the statutory ELC entitlement for the duration of closures, regardless of whether providers were open or closed.
Childminders caring for 12 or more children who have been affected by the restrictions on their operations brought into effect from 26 December 2020 will be able to access the Temporary Financial Support which is being provided. Further information on this support will be made available on the Scottish Government's website.
However, we are aware that not all childminders have been able to access support through these routes.
Recent activities the Scottish Government has led or funded which have been focused on supporting sustainability:
- The Scottish Government has provided funding to enable local authorities to pay sustainable rates to childcare providers, including childminders, delivering funded ELC from August 2020. The payment of sustainable rates to funded providers will be vital to supporting financial sustainability across the sector.
- To support sustainability the Interim Guidance on Funding Follows the Child encourages local authorities to work with funded providers to commission provision beyond the 600 hours statutory minimum where possible, and provided this is within current budgets.
- In response to the COVID-19 Pandemic a range of financial support was made available which many childminders will have been able to access. This includes the Self-Employment Income Support Scheme (UK Government); the Newly Self Employed Hardship Fund (Scottish Government); and the deferral of tax payments, including self-assessment payments.
- Childminders who were in partnership with local authorities to deliver funded ELC continued to receive those ELC payments during the closure period, and around 1,000 childminders across the country worked, many in cooperation with local authorities, to provide critical childcare to key worker families and vulnerable children.
- The Scottish Government initially joint funded, with the SCMA, the £60,000 Childminding Workforce Support Scheme open to all childminders who have been unable to access support through other routes. In September 2020, we announced that an additional £390,000 would be provided to extend the Childminding Workforce Support Scheme, including up to £60,000 for administration with an agreement to re-purpose any unused administration fees back into the fund to increase the number of grants available.
- On 22 January 2021 the Scottish Government announced that a further £1 million of support will be available to provide grants to childminders to support their business sustainability. Further details on this financial support will be made available on the Scottish Government's website.
- We have worked with the childminding sector to provide clarity on the optional charges that childminding settings are able to offer whilst still being able to offer funded ELC. This information, particularly around where retainer fees are permitted, was published in the ELC Statutory Guidance consultation in December 2019. The final version of the ELC Statutory Guidance will be published ahead of the statutory roll-out of 1140 hours.
Our Our Short and Medium Term Commitments
In the context of supporting childminders to access the opportunity to provide funded ELC:
21. Re-schedule the conference aimed at supporting more childminders to offer funded ELC, initially due to be hosted in April 2020, taking account of current restrictions to explore virtual opportunities and the potential for series of mini-events if more appropriate.
22. Commence a review of local tendering approaches, with involvement from key partners including local authorities and sector representative bodies (SCMA. CALA and EYS), to understand how recent changes, as part of Funding Follows the Child, have impacted on small and micro-enterprises such as childminders. This review will, where appropriate, identify where further support can be provided to these enterprises, good practice examples and any areas for further improvement.
In the context of supporting childminders to manage their business sustainably, a project considering the potential for business support tools and training for all childcare providers, and ensuring that this support is accessible, will explicitly examine the concerns and challenges of childminders as mainly self-employed lone workers.
The Scottish Government is committed to continuing to review the need for further support across the whole childcare sector in response to the impact of COVID-19. In particular, should further funding become available at a later date as a result of savings elsewhere, we will consider the best means of supporting childminders to develop and grow as a valued part of our sector.
We will also work with partners to consider whether there are specific challenges for the sustainability of childminders in rural communities which may require tailored support.
We will continue to monitor closely, working in collaboration with the SCMA and others, the longer term impacts to childminding sustainability as we progress through the stages of pandemic recovery, this will inform future activities.
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