Scottish Government report reveals hundreds of nurseries have closed

Scottish Liberal Democrat education spokesperson and North East Fife MSP Willie Rennie has called on Humza Yousaf to honour an ‘absolute commitment’ he gave on fair funding for private and voluntary nurseries. It comes after a Scottish Government report showed that more than a hundred private and third sector childcare services have stopped operating since 2021, and highlighted concerns over staffing and recruitment in the sector.

The Scottish Government’s ‘Financial Sustainability Health Check of the Childcare Sector in Scotland’ was published on Monday. The report showed that:

•           346 private and third sector childcare services have cancelled their registrations with the Care Inspectorate since 2021, with a net loss of 106.

•           Confidence among private nurseries has collapsed, from 51% of surveyed nurseries saying they were sustainable in 2021 to only 30% in 2023.

•           89% of surveyed private sector services had lost at least one member of staff in the last twelve months, higher than any other nursery sector.

The report also included concerns over the loss of staff from private and third sector services, and challenges in recruiting suitably experienced staff. In particular, survey respondents highlighted the pay gap between local authority and the private and third sector settings.

At an SNP leadership hustings in March, Humza Yousaf acknowledged the funding disparity between council-run, and private and third sector nurseries. He pledged to introduce fair funding in his first budget. However when he was later questioned by Willie Rennie at First Minister’s Questions in June, Humza Yousaf claimed that he “did promise to of course look at the issue”, but did not commit to bringing in a fair funding formula.

Willie Rennie said:

“I warned the government that we were seeing an exodus of staff from private and voluntary nurseries, but it took them far too long to acknowledge that there was a problem. Now we can see the damage, with hundreds of private and voluntary nurseries closing in the last two years.

“Nurseries are essential to ensuring that children get the best start in life, and helping parents return to work. The expansion of childcare hours was a welcome step but parents need choice about when and where to access childcare. That flexibility is at risk because private and voluntary nurseries received lower funding than council-run equivalents, and struggle to hire staff.

“Humza Yousaf was clear during the SNP leadership race that there needs to be fair funding for private and voluntary nurseries, but since then he has dodged the issue. He needs to recommit to fixing this problem and bringing forward a fair funding formula.”