SCMA recently questioned a Scottish Government update in which it was stated that childcare providers could not charge parents fees when families are self-isolating. The Scottish Government has responded, acknowledging the statement was inaccurate in some areas and it should have been clearer this was based on advice which they had sought from the Competition and Markets Authority (CMA) and that providers should only charge voluntary and low-level fees when families are self-isolating.
We have today written to the Scottish Government informing them that having considered their response we feel we have no alternative, but to express our complete dismay about the current situation in which childminders in Scotland find themselves, as a result of a combination of UK-wide regulatory guidance from the Competition and Markets Authority (CMA) and legislation introduced in Scotland, by the Scottish Government, which collectively reduce childminders’ ability to charge fees and responsibly run a viable business.
As an organisation committed to supporting childminders, childminding and families, and which has also worked tirelessly to support the national response throughout the pandemic, we find the current situation of extreme concern and urge the Scottish Government to take action to resolve this situation. In this regard we will willingly work with the Scottish Government and others to find a solution.
Legal Complexities
Having contributed to the national response throughout the pandemic we do not under-estimate the legal complexities involved. We recognise this is multi-layered through a combination of:
- devolved (Scottish Government) and reserved (CMA) matters;
- that this was complicated further by the UK and Scottish Governments putting COVID-19 restrictions into law as we progressed through the pandemic, so restrictions would be enforceable to support public compliance. This, in turn, had an effect on other legislation; and
- also through the competing requirements on providers to follow CMA advice (based on the application of consumer law) while also trying to run a viable businesses to support children and families and, in the case of those delivering funded hours of Early Learning and Childcare (ELC) and who are required to follow the Scottish Government’s National Standard, demonstrate business sustainability.
While we recognise the complexity of the current legal and regulatory position, if the Scottish Government legally requires families to self-isolate and not attend settings which are open, and from a consumer perspective the CMA requires that parents should largely not be charged when self-isolating (just voluntary and low level) we believe it is fundamentally unfair and imbalanced if providers are then required to experience a reduction in income arising from this which could threaten their business viability and sustainability.
We have advised the Scottish Government that if it feels that it is not able to influence the current regulatory and legal position in which we find ourselves, we believe that having introduced legislation in this area it has a responsibility to provide direct compensation to vulnerable childminding businesses caught in the middle of this situation if they are not able to charge when parents have to self-isolate.
We have much empathy with parents, but believe this situation has to be balanced and fair. The sums involved in investing in support for childminders’ loss of income due to families self-isolating would not be significant to government, but would make a very significant difference to vulnerable childminding businesses and support their business viability and continued support for families.
Background/Context
SCMA contributed to the CMA’s review of cancellation and refunds during COVID-19, an area into which we believed childminding had been unfairly drawn, but we constructively contributed to that review. To our belief and understanding from having contributed to this process, it was never anticipated by anyone that we would still find ourselves in a pandemic 14 months on or that such measures would be applied more widely, for this duration or indeed beyond. Nor did we believe the approach intended for extended closures would be applied to when childminding settings were open, available, operating, but parents were required by subsequent legislation to self-isolate.
Childminders are small business owners, childminding is not a high-income profession and a majority of childminders are drawn into it as a career to support and make a difference to children in their local communities. Childminders’ income levels do not enable them to build up much in the way of reserves.
Many childminders stayed open to support the national response to COVID-19 by providing childcare to families (including key workers and vulnerable children) and during the pandemic many childminders have experienced financial difficulty. Throughout the pandemic we have captured a range of evidence on the impact of the pandemic on childminding and shared this with the Scottish Government.
We have also shared with the Scottish Government our concerns that, due to their small business size, childminding businesses have been disproportionately adversely affected financially by the pandemic, and that inequalities between childminders and other providers have widened. We recognise that the Scottish Government has provided Business Sustainability Grants (£750 per childminders) and this has been valuable, but childminders have proportionately received much less financial support than other childcare providers, of comparable size, through the Transitional Support Fund and more recently the Temporary Restrictions Fund.
We recognise it is easier to highlight problems than to come up with solutions; as such, we have willingly offered to work with the Scottish Government to develop a solution which is fair, balanced, proportionate and demonstrates an understanding of childminding – as the Scottish Government will be aware from our submissions we do not believe the current position is any of these. Without this, we believe many childminding businesses will become completely non-viable.
SCMA will be meeting with the Scottish Government later today to discuss our concerns.
Members will receive further details about this matter.