Closure of North Edinburgh Childcare 'direct' result of council defunding, says councillor
Edinburgh council denied the closure was due to the withdrawal of funding, saying the organisation had faced “long term financial difficulties”
A SNP councillor has blamed Edinburgh council for the collapse of North Edinburgh Childcare (NEC), claiming there is a “direct link” between the defunding of the service and its sudden closure.
NEC, which provides a nursery and several out-of-school clubs across the city, informed staff and parents earlier this week that services will close from Friday after the Board of Trustees revealed the organisation was facing insolvency.
NEC is not council-run, but has received funding from Edinburgh council through contracts and grants for over ten years, most recently through the Affordable Childcare for Working Parents service.
Following the introduction of the new service in 2024, the grants received by NEC and the three other childcare providers funded by the service have been tapered annually.
The three-year agreement was introduced to encourage the providers to revise their business models to become more self-sustaining, with the annual grants due to cease entirely in 2027.
In that time, it is understood the NEC took several measures to try and adapt, including expanding its wraparound care services such as after-school clubs.
At a council committee meeting last month, a motion was passed to replace the current system with a new model, meaning from next year the £913k budget for the Affordable Childcare Service would be used for a citywide subsidy programme provided directly to parents, instead of subsidising the four providers.
Euan Hyslop, the SNP councillor for the Drum Brae and Gyle ward, said that amounted to “cutting their funding to zero” and that it was “foreseeable and inevitable” that a major childcare provider would be forced to close as a result.
The council has denied the closure was due to the withdrawing of funds, saying NEC was facing “long-term financial difficulties”.
NEC’s accounts show in 2024–25, expenditure exceeded income by £137,904. In 2022–23, it exceeded income by £182,885 and in 2023-24, the surplus was only £23,134.
Meanwhile, an email sent to parents by the NEC’s Board of Trustees cited a number of factors, including “a falling birth rate, lower demand for childcare, increasing overheads and diminishing external financial support”.
Mr Hyslop said: “I had warned that it was an inevitability back at the committee meeting on September 29.
“I literally said, mark my words, this will lead to the closure of one or more of these organisations that are being defunded. I'm sad to say that that has been proven correct.
“It’s clear that any organisation being defunded to that extent is not going to survive.”
On the new funding model voted for by councillors, he said: “Giving the pot of money directly to parents instead of the providers is all well and good, but if these organisations close, there’s not going to be anywhere for these families to send their kids.
“Anyone with kids in Edinburgh will know how hard it is already to find childcare spaces.”
Mr Hyslop has submitted an emergency motion on the issue ahead of Thursday’s full council meeting.
He is calling on council officers to offer “emergency assistance” to families who have been left without suitable childcare, including financial assistance where necessary, and to establish whether there are alternative childcare providers that can step in to continue the services.
The council administration has also submitted a motion on the closure, agreeing that senior council officers meeting the Board of Trustees to explore opportunities to continue providing a level of care and calling for an urgent report on what measures can be taken to support the parents and children without a service.
In the motion, the administration confirmed that NEC have 26 funded nursery places, all of which will be offered an alternative place by the end of this week.
Cllr James Dalgleish, education, children and families convenor, said: “I was very concerned to hear of the sudden closure of North Edinburgh Childcare and realise the huge impact this will have on young people and parents across Edinburgh as well as the staff that have lost their jobs.
“I want to stress that this closure was due to long term financial difficulties that North Edinburgh Childcare has faced and not from the council withdrawing funding. In fact, we committed to provided funding to North Edinburgh Childcare from Edinburgh Council until July 2027.
"Edinburgh Labour have raised an emergency motion for the full council meeting [on October 29], looking at real solutions not looking to blame others or use this serious issue as a political football.
“This is an immediate problem for parents needing after school care to continue to study and work and to help the staff affected as well.
“We will treat this issue seriously and act as quickly as possible.
“I know the council leader will be writing to the Scottish Government urgently to highlight the huge challenge surrounding being able to offer affordable childcare to our residents.”
A spokesperson for the NEC said: “It is with enormous sadness that North Edinburgh Childcare announces that the organisation is facing insolvency and is closing on Friday 30 October 2026. For the avoidance of doubt, we will be open as normal on Friday 30th but will be closed thereafter.
“The Board of Trustees has explored every possible option and scenario to keep the organisation open and financially viable. Sadly, despite our best efforts, a sustainable way forward cannot be identified and, having taken legal advice, the decision has been made to close forthwith.
“This is a devastating outcome for an organisation that has supported children, families and the local community for many years. Our thoughts are very much with the children and families who rely on our services, and with our dedicated staff who have worked so hard to support them.
“We continue to liaise with the City of Edinburgh Council to ensure that all available support is identified for families affected by the closure and for our staff during this very difficult time.”