SCMA Response: Scottish Government Financial Sustainability Health Check of the Childcare Sector

SCMA Response:  Scottish Government Financial Sustainability Health Check of the Childcare Sector

Today, (Tuesday, 31 August), the Scottish Government published its Financial Sustainability Health Check of the Childcare Sector in Scotland.  This report has collected evidence from a range of sources on the sustainability of the childcare sector, and in particular, focuses on the impact which COVID-19 has had financially, including on childminding businesses. 

The report found that school-aged childcare providers and childminders (particularly non-funded providers) remain the most exposed and vulnerable financially with their concerns about business sustainability having increased significantly during COVID-19.

This is of particular concern to SCMA, as the survey of childminders conducted as part of the exercise also found that 70% of childminders have been relying on financial support from the UK Government’s Self-Employed Income Support Scheme (SEISS) which is due to end in September. The ending of this support could worsen the position for many childminding businesses in Scotland and, in turn, have an adverse impact on children and families.

The report includes a number of actions in response to the findings including; 

targeted business support and training to help providers increase their future business sustainability and a commitment to develop a new workforce strategy and to review the level of administrative work required of childminders and private providers

However, the report does not include any additional financial support for providers and includes little in the way of new childminding-specific actions in response to its findings.

Graeme McAlister, Chief Executive, SCMA, said,  “We are grateful for the financial support provided to date for childminders and recognise that public funds are limited, but we are very disappointed with the report and do not believe it goes far enough to address the inequalities which exist regarding financial support across the childcare sector.  

“While the provision of business support and training may be useful to some, it doesn’t address the underlying issues and the inequalities which exist. The gap between childminders and other childcare providers which arose during ELC expansion have widened further during the pandemic and there have been significant differentials in the level of financial support at both a Scottish and UK level provided to nurseries (and employees) and childminders (the self-employed). Childminding is still very much in catch-up and further targeted support is required to reduce these inequities. Further risks remain, in particular, when financial support to childminders from the SEISS ends next month. 

“However, we welcome the Scottish Government’s renewed commitment within this Financial Health Check Report to reviewing the administrative requirements of childminders and private providers. Reviewing the levels of bureaucracy and administration requirements of childminding is something which SCMA has been pressing for since our large-scale survey of childminders in 2020, (which gathered nearly 1500 responses), and found that the level of bureaucracy associated with childminding practice is the main reason why childminders have been leaving the profession, or intend to do so.

"Our workforce has declined by 22% in the last 5 years; 25% of remaining childminders do not believe they will still be childminding in 5 years’ time and a further 25% are undecided.  It doesn’t take much to realise that we have a potential workforce crisis on our hands if we don’t take bold action to turn this around.

"SCMA advocated for and secured the new Action Plan on Childminding which was published by the Scottish Government in January and this must progress at a faster pace. We are willing to contribute to discussions as to how we can reduce the level of bureaucracy before it’s too late and we need other statutory stakeholders at a national and local level to recognise the problem and commit to changing this.   

“We believe many childminders will be disappointed by this report and its actions. SCMA remains absolutely committed to representing members’ views, concerns and experiences so that they can, in turn, support children and families, and we will continue to support our members to recover and sustain their businesses.” 

Financial Sustainability Health Check of The Childcare Sector in Scotland 
Analysis and Evidence Paper