Chamber and committees

The Scottish Government does not hold specific data on the number of nurseries which have cancelled their registrations with the Care Inspectorate since 2016. However, the Care Inspectorate publishes data each year on its website. This data shows that, between 1 January 2017 and 30 April 2024, 1,000 day care of children settings cancelled their registration. This figure will include nurseries as well as other types of day care of children settings.

It is important to note that a cancelled registration does not always mean that the service is no longer operating but can reflect other factors such as a change in ownership.

Source: Care Inspectorate Cancelled Services, Changes to registration, variations and cancelled services (careinspectorate.com)

The Scottish Government does not hold specific data on the number of nursery closures by local authority area. However, the Care Inspectorate publishes data each year in the Early Learning and Childcare Statistics publication that sets out changes across different types of childcare settings at a national level. This shows an increase in the number of nurseries from 2,468 in 2016 to 2,538 in 2022 (a 3% increase). This figure will be affected by both closures and openings of new settings.

Source: Care Inspectorate, Early Learning and Childcare Statistics 2016.pdf (careinspectorate.com) and Early learning and childcare statistics 2022.pdf (careinspectorate.com) .

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 is committed to supporting a diverse, sustainable and thriving childcare sector.

For those providers in the private and third sector, including childminders, who deliver funded early learning and childcare (ELC) the payment of sustainable rates by local authorities is vital to supporting their financial sustainability and to enabling the delivery of high quality ELC. Rates have increased substantially since the implementation of the ELC expansion to 1140 hours – with the average rate paid by local authorities to providers for delivering funded ELC to 3-5 year olds increasing by 64.1% between 2017 and 2023, from £3.68 per hour in 2017-18 to £6.04 per hour in 2023-24.

However, while the average rate has increased, there remains variation in the rates paid across Scotland. That is why the Scottish Government will continue to look for opportunities to strengthen the current system, including taking forward the recommendations of the joint Scottish Government and COSLA Review of Sustainable Rates Early learning and childcare: sustainable rates review - gov.scot (www.gov.scot) , published in December 2023. The evidence-based review recommends a wide-ranging set of actions, which are currently being progressed, to strengthen the process for setting rates.

In 2024-25 the Scottish Government has provided local authorities with an additional £16 million to enable staff delivering funded ELC in the private, and third sector to be paid at least £12 per hour from April 2024. To support this commitment joint Scottish Government and COSLA guidance Funding Follows the Child and the National Standard - Funded early learning and childcare (ELC) - setting sustainable rates 2024 to 2025: guidance - gov.scot (www.gov.scot) sets out our shared commitment to increasing rates for all funded ELC providers by at least 7.6% in 2024-25.

To support the sustainability of the overall childcare sector the Scottish Government has legislated to continue the Nursery Rates Relief Scheme, which provides 100 per cent relief on Non-Domestic Rates to eligible day nurseries; made more than £35 million of dedicated financial support available to providers during the pandemic; and funded pilot programmes of targeted Business Gateway support to enable childcare providers to access tailored, specialist advice on strengthening their businesses.

As set out in Best Start: Strategic early learning and school age childcare plan for Scotland 2022-26 (careinspectorate.com) we will maintain a robust but proportionate means of monitoring the financial sustainability of the childcare sector to ensure that both national and local policy is informed by up to date evidence about the health of the sector. This includes through the Financial Sustainability Health Checks. The most recent Financial Sustainability Health Check of the Childcare Sector in Scotland - gov.scot (www.gov.scot) was published on 31 July 2023 and sets out a programme of actions, across a number of areas, to support the long-term sustainability of the sector.

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) 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 Scottish Government has no functions in relation to the changes introduced by the UK Government's reform of public service pensions.

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%.

The impact of the recent teacher pay settlement will be taken into account as part of the 2024 scheme actuarial valuation. The valuation measures the costs of the benefits being provided and informs the future contribution rates to be paid by employers in order to ensure sustainability.