Chamber and committees

Under Funding Follows the Child, all nurseries who deliver funded early learning and childcare (ELC) must, as part of the criteria in the National Standard for all ELC providers Section 2: The National Standard for all Early Learning and Childcare Providers - Funding Follows The Child and The National Standard for Early Learning and Childcare Providers: Operating Guidance - gov.scot (www.gov.scot) , be able to demonstrate that they are financially viable providers and that they have a sustainable staffing structure in place which meets the recommended adult: child ratios.

Local authorities are responsible for assessing and monitoring compliance with the National Standard in all funded providers, as part of their contract management arrangements and in their role as guarantors of quality. With regards to business sustainability, services delivering funded ELC must ensure that they are able to demonstrate – when required – that their business model continues to be financially viable through the provision of appropriate financial information, for example, accounts and business forecasts/projections. A Business Continuity Plan must also be in place.

If a service delivering funded ELC was at risk of closure due to financial difficulties or staffing shortages then it is expected that they would make their local authority aware of these challenges.

The Scottish Government monitors trends in sustainability and staffing across the overall childcare sector, including through the Financial Sustainability Health Checks. Analysis in the most recent Financial Sustainability Health Check: Financial Sustainability Health Check of the Childcare Sector in Scotland - gov.scot (www.gov.scot) published on 31 July 2023, reported that annual cancellation rates for private and third sector services over the period March 2020 to March 2023 were at similar levels to previous years.

The Scottish Government's annual teacher workforce planning process is informed by a statistical model which estimates the number of Initial Teacher Education students required to maintain teacher numbers. The model considers a number of inputs, including projections of the number of teachers retiring.

The Strategic Board for Teacher Education, which comprises a range of key education stakeholders, is also considering issues around the recruitment and retention of teachers in Scotland.

The Scottish Government is committed to protecting teacher numbers, and we are offering local authorities £145.5m in this year’s budget for that purpose. This funding will allow councils to protect teacher numbers in order to support children’s education.

The Scottish Teachers’ Pension Scheme (STPS) continues to be an integral part of the remuneration package for teachers in Scotland. A Defined Benefit scheme, it offers the security of a guaranteed income in every year of retirement for all its members. Pensions in payment to retired members are inflation proofed and adjusted each April in line with the Consumer Prices Index. In April 2023, pensions increased by 10.1% and in April 2024 by a further 6.7%.

While Scottish Ministers have executively devolved responsibility for the STPS, they exercise those functions within a reserved framework. The Scottish Ministers must therefore implement policy which reflects UK government primary legislation and any secondary legislation introduced by Scottish Ministers requires HM Treasury approval.

The design of the STPS, including accrual rates and benefits payable from the scheme, are determined by reserved UK Government primary legislation. Scottish Ministers have no powers to vary the accrued benefits payable from the scheme to retired teachers without HM Treasury consent.

The latest Scottish Teachers’ Pension Scheme Annual Report and Accounts show that the average annual pension in payment from the Scheme as at 31 March 2023 was £13,842. In addition, the accounts show that lump sums totalling £133.5 million were paid to 2,723 new retirees in 2022-23, an average lump sum of £49,063.

The Scottish Teachers’ Pension Scheme (STPS) provides teachers in Scotland with a Defined Benefit pension scheme which offers the security of a guaranteed inflation proofed income in every year of retirement which is paid in addition to the State Pension. Teachers are automatically enrolled into the scheme and begin accruing pension immediately upon taking up teaching employment which supports pension saving throughout their careers.

The value of members’ benefits accrued in the Scottish Teachers’ Superannuation Scheme (STSS) are protected by transitional protections on moving to the Scottish Teachers’ Pension Scheme 2015. These protections include a Final Salary Link which provides that members’ final salary pension from the STSS is based on their pensionable salary at the point they finally retire and not at the point they transition to the 2015 Scheme.

The Scottish Teachers’ Pension Scheme was reformed by the UK Government under the Public Service Pension Act 2013 along with the other main public service pension schemes in the UK. All schemes are broadly comparable and are based on Career Average Revalued Earnings. Apart from the uniformed public services, all schemes have a pension age linked to State Pension age.

There are three early retirement options available to members of the Scottish Teachers’ Pension Scheme who have reached normal minimum pension age:

• Premature Retirement is an option if a member is made redundant or retires in the interest of efficiency. The pension would be actuarially reduced because the member is retiring early and employer must agree to make up the shortfall to the full pension amount. Therefore, there is no impact on the final pension amount the member receives.
• Voluntary Early Retirement is where the member chooses to receives an actuarially reduced pension. The benefits are reduced to take into account the fact the pension will be paid over a longer period of time than a normal retirement pension.
• Phased Retirement allows members to take up to 75% of their pension while reducing their working commitment. To do this, members must reduce their pensionable salary by at least 20% for a minimum of 12 months. Any percentage of pension benefits taken before normal pension age would be subject to an actuarial reduction.

The Teachers’ Pension arrangement in Scotland comprises of two schemes. The Scottish Teachers’ Superannuation Scheme (STSS) which is the legacy scheme and which closed to all members on 31 March 2022, and the reformed Scottish Teachers’ Pension Scheme 2015 (STPS).

The STSS is a final salary scheme and has a normal pension age (NPA) of 60 for members who joined prior to 1 April 2007 and a NPA of 65 for members who joined on or after 1 April 2007. For members with a NPA of 60, the accrual rate is 1/80 th of the members final salary for every year of pensionable service, there is also an automatic tax-free lump sum payable of 3/80ths. For those with a NPA of 65, the accrual rate is 1/60 th and there is no automatic lump sum. However, members have the option to give up pension for a tax-free lump sum at retirement.

In the STPS, benefits accrue on a Career Average Revalued Earnings (CARE) basis and NPA is linked to State Pension Age. The accrual rate is 1/57 th of the member’s pensionable earnings each year. There is no automatic lump sum but members have the option to give up pension for a tax-free lump sum at retirement.

The pension benefits structure in the STPS is broadly comparable with the main UK public service pension schemes which are all based on Career Average Revalued Earnings. Apart from the uniformed public services, all schemes have a normal pension age linked to State Pension age. `