Scottish Government admits 'real challenges' amid sharp fall in the number of childminders and private nurseries

Surveys show huge rise in number of childcare providers fearing for the future

The number of private and third sector nurseries in Scotland has plummeted by 220 in just five years amid staff shortages and funding concerns.

New data shows a fall of more than 11 per cent, from 1,932 providers in 2018 to 1,712 in March this year. In the same period, the number of council-run nurseries has increased from 1,719 to 1,785 – a rise of almost 4 per cent.

Meanwhile, the statistics show a dramatic fall in the number of registered child-minders, from 5,333 to 3,462 – a decline 35 per cent. The figures have emerged amid growing concern about the crisis facing many early learning and childcare (ELC) providers.

File photo of a child playing. Dominic Lipinski/PA Wire

The Scotsman revealed last month the Scottish Private Nursery Association (SPNA) was considering legal action over the running of the Holyrood Government’s flagship £1 billion-a-year, funded childcare scheme.

In August 2021, the number of hours of funded childcare that children were eligible for almost doubled, from 600 hours a year to 1,140 hours a year. It covers three and four-year-olds, and the Scottish Government plans to expand it to include one and two-year-olds.

But concerns have been raised about the way the policy is funded, claiming many councils are not paying fair rates to private and third sector nurseries. The government and councils are reviewing the arrangements.

In a newly-published “health check” report, the Government said the number of children in childcare was gradually declining due to demographic changes. The report highlights figures showing drops in the number of private and third sector childcare services in every year since 2018.

In 2018, there were 1,093 private nurseries and 839 in the third sector, while by 2023 these numbers had fallen to 1,028 and 684 respectively.

The number of places in private nurseries actually increased in the same period, from 61,753 to 62,551, although in the third sector it fell from 31,442 to 28,291. Overall, total day care places, including council facilities, increased from 165,754 to 179,979.

In child-minding, the total number of places dropped from 33,007 to 21,601. Surveys also showed confidence in financial sustainability has “declined across all types of childcare services” since 2021, with the “largest shift” being among those providing funded childcare.

Sustainability concerns were raised by 31 per cent of those providing funded childcare, up from 9 per cent in 2021. For private nurseries, the proportion more than doubled from 19 per cent to 42 per cent, although the Government said the response rate was low.

In the report, the Government said: “The analysis has highlighted that the childcare sector is currently facing real challenges due to the ongoing costs crisis, workforce pressures and the lasting impacts of the pandemic.

“While all parts of the sector reported less confidence in their financial sustainability since the last health check, some types of services have been disproportionately impacted due to their business models and changes in demand for different types of childcare provision.”

The report said the Government would build on a programme of “targeted business support” for childcare providers, as well as covering the costs of the Protecting Vulnerable Groups (PVG) membership fees for new entrants to the sector for the remainder of the 2023/24 financial year.