The trustees present their annual report and financial statements for the year ended 31 March 2025.

The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's Memorandum and Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019).

The principal activities of the company (CALA) are to promote, maintain, improve and advance the educational and social development of children and their families working with settings providing early learning and childcare (ELC) and or school age childcare and through family services support to parents and communities.

The Charity's values guide our work:

Our Strategic Plan for 2022-2026, which has an overarching Vision and 4 key aims, continued to be a key focus over the year as we sought to balance supporting current vital work with developing new services in response to increase demands. We continued to streamline systems and processes to ensure CALA works smarter and more effectively while monitoring the improvements and outcomes achieved.

Vision

• We deliver high quality services that nurture and support children and families.

• Children, families and our team are at the heart of all we do.

4 key aims

• We will provide high quality services for children and families.

• Children and families have access to inclusive services.

• Our workforce is professional, skilled and valued.

• We are a dynamic, responsive, and sustainable organisation.

Our work continues to focus on outcomes that benefit the children and families of the Highlands as well as supporting our vitally important staff. We continue to develop our Key Performance Indicators (KPI) for 2024-25, ensuring we are fully capturing how our work is joined up, evaluated and evidencing our improvement and outcomes. The KPI’s ensure our board has full scrutiny and oversight of our work and has the required assurance.

The following sections for achievements, performance and finance against our new 4 Aims form the strategic report of the charity. Here are a few examples of how we are meeting each aim:

Aim 1 - We will provide high quality services for children and families

Childcare settings

CALA prides itself in offering flexible, inclusive and quality childcare services across Highland. In 2024/25 reporting period we provide care to an average of 305 children across 20 childcare settings every day - from full daycare to early learning and childcare, school aged childcare and holiday clubs. Continuous improvement and self reflection are key to ensuring we provide the best for the children in our care every day - we are especially proud of the strong partnerships and relationships we have with parents and carers so together we can ensure children have the best start in life.

"The staff are fantastic. They're kind and thoughtful, they take the time to really know the children and help them develop in ways that suit their personalities" Parent, Fortrose ELC

Active Play

With funding from Inspiring Scotland we delivered an Active Play programme within primary schools and associated ELC in Highland and Moray. We also deliver active play in partnership with NHS Highland in targeted areas in Highland. The Active Play model is 30 minutes of social games followed by 30 minutes of free play. During the free play component, practitioners have adopted a child-centred approach—designing activities in response to children's interests and play patterns observed during sessions. To enhance the impact of the programme and ensure its long-term sustainability - particularly in promoting child-led play - practitioners played an active role during break and lunchtime periods. They supported older pupils in taking the lead on social games and worked collaboratively with playground staff to review and expand the variety of available play resources. Additionally, pop-up play sessions were delivered within the communities associated with each school, giving families an opportunity to engage with the key messages of Active Play and encouraging a shared enthusiasm for active, outdoor play. After the sessions, 88% of school staff felt there was a high level of impact on the children’s social and emotional development, with 12% reporting a medium level of impact .

“Initially I was sceptical – an hour in curriculum time seemed a lot. However, [CALA] have been inspirational with their ideas for engaging the children in play linked to their learning. I am already using a lot of what I have seen in practice.” Primary 3 teacher

Play sessions

The Play team continue to provide valued and well attended community-based sessions across Highland from Play and Learning groups to baby massage. These regular community-based groups offer the opportunity for parents to meet with peers to access support and advice in a relaxed and informal atmosphere. Our skilled play practitioners can also signpost onto other support and services while role modelling positive child development strategies. Children have the opportunity to enjoy a wide range of quality play opportunities and experiences while socialising with other children.

“Love everything about the group!!! There is something different at every session and

we love coming. Thank you“ Parent, Raigmore

“This has been super – such a lovely calm atmosphere – it has really helped my confidence getting

out with my baby and meeting other Mums.” Parent, baby massage

Aim 2 - Children and families have access to inclusive services.

Children’s Rights

The provisions within the UNCRC (Incorporation) (Scotland) Act 2024 came into effect in July 2024. Scotland is the first country in the UK to make this commitment to children and young people. The Act says that people like teachers, police, community planners and public services amongst others as ‘duty bearers’ must act compatibly with the 54 children’s rights articles based on four principles: non-discrimination, in the best interest of the child, children’s views and their right to survival and development. 

In CALA, Children’s Rights have underpinned our work in childcare and learning for many years featuring significantly in our organisational policies, guidance, inspection frameworks, professional learning, practice support, quality assurance and in our interactions with and on behalf of children on a daily basis.

Family links Project

The Family Links (FL) Project is a collaboration of three charities - the Care and Learning Alliance (CALA), Home Start East Highland and Thriving Families - funded and supported by the Highland Whole Family Wellbeing Programme to work alongside families in a holistic way. The FL workers help with positive solutions to promote children and young people’s learning and development by enhancing family well-being and supporting positive engagement with school. Once evaluated it is hoped to roll out this test of change project across Highland. CALA is currently supporting 11 Families in a variety of ways, including small group sessions with children to work on social skills, going to the family home to support morning routines, working with parents on managing behaviours along with sign posting to support with housing/wellbeing and managing money etc.

“I very much love it when you come and see me . . it makes me feel like more people care about me . .” Child supported by CALA FL worker

“I have seen my child is happier going to school and her behaviour has also changed – she has not been so angry over the last few weeks.” Parent

Rural service support and innovation

CALA continue to emphasise and advocate for recognition of the vital role childcare plays in ensuring sustainable and thriving rural and island communities, while highlighting the unique challenges there are delivering quality accessible childcare in these areas. CALA’s expertise and experience as both a representative body and a direct provider means we understand uniquely what the challenges, and possible solutions are. For instance, we have highlighted where current regulations, such as Nappy Changing, may be more suited for urban based settings and are actually barriers to provision in rural areas. We are delighted the Care Inspectorate is now developing new guidance that is more proportionate, pragmatic and appropriate while also keeping children safe. Working closely with Highlands and Islands Enterprise (HIE), Highland Council and Scottish Government, as well as the regulators, we have contributed and supported an Evidence Report which highlights not just challenges but solutions to the key issues of childcare delivery on rural and islands areas, developing new models that could better meet these specific communities needs as well as offering practical advice to communities seeking to develop their own childcare. Our innovative multi agency integrated Single Care Model (SCM) is gaining a huge amount of interest regionally and nationally and forms a key element of the Evidence Report, Highland Councils Delivery Plan for service design and the Highland Community Planning Partnership actions.

Our participation on a wide range of national advisory groups and forums allows us to input into policies, procedures and guidance using our lived experience and expertise in a solution focussed collaborative way.

“Thanks for work you completed on the Island – I don’t think the Trust would be where they are and ensuring childcare is a priority without the support of CALA.”

3 - Our workforce are professional, skilled and valued.

Hub Community Foundation - Building Brighter Futures Fund 

Building on our workforce development strategy and with funding from Hub Community Foundation and working with Inspiring Scotland, we secured two years of funding to implement the 'Building Brighter Futures' program. This initiative is designed to assist the most disadvantaged young people who are furthest from the labour market by offering them opportunities to develop the skills and confidence needed to thrive through education, training, and employment across Scotland.

Working across a rural area, we provide advice, guidance and opportunities for learning about a career in childcare as well as 1:1 mentoring sessions and interactions with as many members of childcare staff, as well the children, as possible. This helps increase knowledge acquisition, confidence and communication skills. Supported placements within childcare settings, parent, baby and toddler groups, play and learn sessions, active play sessions and pop-up community events allow mentees to develop and enhance their communication, teamwork and problem-solving skills as well as affirming their goal of working with children and ascertaining that it is achievable.

"The support received from CALA has been invaluable for preparing X for her first steps into a career in childcare. . . Particularly when the childcare sector in the Highlands is in acute need of new people entering the profession, these sessions are vital in building the resilience not only of individuals and the sector itself, but of rural areas more generally.” DYW West Highland

Staff survey and Fair Work

We continue to value and recognise our staff as our greatest resources and so undertook a thorough anonymous survey of all our staff in June 2024. 97% of respondents were very satisfied or quite satisfied with their current job and 95% find their role meaningful. Positive comments from staff included recognising that “my manager listens and takes our issues further” and “happy the way everything is!” However, some staff also highlighted that they wished the pay could be higher recognising the valuable work they do. Therefore, in June 2024 we were proud to receive our accreditation as a Living Wage employer as well as being committed to ensuring Fair Work practices for all our staff.

Professional learning and development

Our online ‘ELZ’ e module platform has a Scotland-wide reach and continues to provide high quality and valued support and training to a wide range of practitioners, other professionals and parents. Its development is based on feedback gathered from both face-to-face sessions and the e-learning platform. Currently, we have over 12,836 registered users across all 32 authorities in Scotland, with 52% of our users located outside the Highland region. Over past year, 21% of ELZ users were as childminders, 19% SAC providers, and 39% as ELC practitioners, along with participation from students, parents and a range of professionals such as social work, teachers, children’s services workers etc.

Moreover, our platform also supports tailored staff induction programs in line with the National Induction Resource for ELC, customized Continuous Professional Learning (CPL) for CALA staff, and the facilitation of online delivery for aspects of our Foundation Apprenticeship courses. This approach enables our small team to effectively accommodate two cohorts simultaneously, maximizing our reach and impact within the childcare sector.

CALA Staffbank

Our CALA Staffbank is a hugely valued and much used resource to support high quality childcare provision across Highland. Over past year, we had 67 on our staffbank - 27 new Relief Childcare Practitioners (RCPs) joined us while the majority of the 38 RCP leavers went onto permanent posts with CALA or the wider sector which demonstrates the value of Staffbank as a pathway into a career in childcare. 

4 - We are a dynamic, responsive, and sustainable organisation.

Membership support - training

We have been focussing on engaging with our members in ways and at times that suits their busy schedules and responding to their needs and concerns. In feedback from recent contact with members, 100% of members spoken to have stated they are happy with the member’s services provided by CALA. 55% of our members particularly enjoy benefits such as access to MemberZone with 22% saying our flexible adaptable policies are a key benefit. In response to demand, face to face training on Children’s Rights in Practice was delivered in Highland and Moray in the evenings to meet sector requests and fit with staff’s work patterns. The course was attended by 52 practitioners, with 98.7% rating the training as ‘very good’ or ‘excellent’, highlighting its strong relevance and impact. Learner evaluations found the

opportunity for face to face discussion, sharing practice ideas and experiences highly beneficial. Quality Assurance visits to some of our CALA settings post delivery has demonstrated the implementation of learning gained in practice and increased awareness by children and parents.

Membership support - payroll

Over the 24/25 tax year we processed 1855 payslips for 15 member clubs as part of our payroll service, a much used membership offer. Our bespoke and individualised service based on years of sector experience means we are highly valued by our members due to going above and beyond with our advice and support.

You are amazing - can't tell you how much I appreciate that! … Thanks for all your support again this year - lucky to have you! 3rd sector member after we gave some advice on their pension scheme.

Membership support – Parent, baby and toddler groups

Our Family Services team have been supporting our parent, baby and toddler group members throughout the year with bespoke support and advice on a wide range of topics from childcare guidance to training as well as termly visits to the toddler groups to provide play sessions and provide hands on advice and support. Throughout the year, we made 97 visits to 35 of these vitally important community based and run groups, supporting over 1536 children and 1302 families.

“We had a visit from CALA this morning – it was so nice we had the whole session outdoors”

CALA member toddler group

Reducing child poverty

CALA are committed to working in partnership to reduce child poverty and so our CEO is a 3rd sector representative on the Reducing Poverty sub group of the Highland LOIP and is chairing the sub committee looking at the needs of very young children and their families and the key role childcare plays in supporting a reduction in child poverty. This is now a key action across the Community Planning Partnership (CPP) and the CEO will be presenting on that topic at the upcoming CPP Conference. A recent visit by the Improvement Service to Highland saw their officer spend time with the CEO to understand the role of childcare and the barriers to access within a rural context.

Collaboration and strategic working

CALA have always worked in partnership and have been looking at how to increased collaborative funding bids in partnership with public and third sector organisations, aiming to maximise outcomes for our service users while ensuring optimal use of public resources, supporting our strategic goals. By fostering these relationships, we are better positioned to leverage collective expertise and funding opportunities that can lead to more impactful programs. Currently, we are working in partnership with NHS Highland's Infant Feeding program, Calman Trust, a local care home, HALO, Mikeyline, Thriving Families and Homestart East Highland with more in planning stages. By working together, we aim to create comprehensive support systems that enhance the quality of care and resources available to our service users, ultimately contributing to healthier and more resilient communities and supporting holistic whole family wellbeing.

Close monitoring and review of the ongoing financial situation against budget has remained steady throughout 2024/25 despite a very challenging financial climate and the continued uncertainty of public sector funding. Forecasted budget planning is in place for 2025 onwards linked to our plans to develop a new Strategic Plan for 2026 onwards. Our current Strategic Plan has a key strand of which is to diversify income streams to continue to provide a quality service that is sustainable and reduce our reliance on more traditional forms of grant funding which must continue into the future.

Financially, there were a number of opportunities but also challenges over the year including a long running employment tribunal case, of which the final settlement figure is reflected in these accounts.

CALA continues to work closely with the Highland Council (THC) as a major funding partner, ensuring that shared key outcomes are met in relation to the outcomes identified. Any changes in funding from the Highland Council are closely monitored to ensure any impact of these is mitigated. Previous losses to our Highland Council SLA have been well managed however continual cuts or ‘flat cash’ is not a sustainable option into the future. Therefore, we are continuing to seek early discussions with Highland Council as well as develop new funding partners and streams of income for a sustainable future for CALA.

Investment policy

The company received shares on the flotation of the Alliance and Leicester Building Society (now Santander) and it is the company's policy to retain these shares.

Reserves policy

It is the policy of the charity to maintain unrestricted funds, which are the free reserves of the charity, at an appropriate level.

As we move into 2025/26 and beyond, CALA will continue to champion and provide solutions in a holistic and collaborative way, working across different agencies, communities and organisations to reflect the realities and challenges in rural areas as well as in the sector and country as a whole.

As always, our strength relies on our collaborative and trusted relationships with families and communities as well as key stakeholders Highland Council, NHS Highland, Highland Third Sector Interface (TSI), Inspiring Scotland, Highlands and Islands Enterprise (HIE) and Scottish Government, members and wider sector.

Our focus will be on growing these partnerships to effect real change especially in remote and rural communities. We will continue to work with families, communities and partners to develop place based integrated and intergenerational solutions, offering new ways of delivery that meet our socially responsible objectives. We will continue to evaluate our services including our communications and seek to pivot as needed to reflect new platforms and medias. We will continue to explore and develop our understanding of new and emerging technologies balancing innovation with risk and quality.

The ongoing challenges with recruitment and retention, expectations on regulated services, and the expansion of the unregulated School aged childcare sector are all contributing to concerns about ongoing viability of the sector especially in rural areas, although we welcome the upcoming proposed changes to the school aged childcare definitions and regulations and will monitor these closely.

The decrease in time allowed to achieve qualifications by SSSC is also a factor in the increasingly fragile childcare sectors, and again we will be watching closely to understand the impact. However, it must also be recognised that quality childcare services are not just be about qualifications, but also about having the essential time, mentoring and the opportunity for self-reflection, peer dialogue and learning for our staff. Therefore, we must build a new system of childcare that has the child, families and staff at the centre.

Play is at heart of UNCRC as well as at the heart of all we do and we will continue to raise its profile through development of a Highland Play Strategy, as well as the continuation and development of projects such as Active Play, our growing Pop Up Play offer and Play and Learn sessions.

CALA will continue to meet the diverse needs of children, families and communities in a Children’s Rights Whole Family Wellbeing based way, ensuring the wellbeing and empowerment of the child, family and communities remains at the heart of all of our work. We remain passionate that services must be connected in a child and family centred way to maximise support and minimise duplications or gaps, supporting the reduction in child poverty and rural inequalities. We also know that quality, trusted relationships, early support and intervention for parents and children is key to ensuring both the child and the whole families thrives. We will work to develop these relationships, services and resources in partnership across Highland and beyond.

We will continue to innovate and develop new income streams and more business-like ways of working with a range of stakeholders and partners while keeping our charitable purpose at heart of all we do.

Ensuring our staff are valued and their professionalism and skills recognised and fairly rewarded is key to our future sustainability and growth. Our dedicated staff are our greatest asset and resource, and we will continue to find ways to show how much we value them and continue to develop benefits that allow us to recognise their hard work and commitment.

CALA are extremely fortunate to have a hugely supportive, expert volunteer Board who provide leadership, strong governance and accountability. We have a truly dedicated and professional staff team, without whom we could not deliver to the high standards we do day in day out. Our TeamCALA ethos is what gives the charity its strength, integrity and authenticity to ensure all children have the best start in life.

CALA trustees are elected annually and the company benefits from a breadth of experience and skills. Throughout the year training and development opportunities are made available to the Board of Trustees. The Board meets quarterly with Chief Executive, Jaci Douglas, to review the strategic work of Care and Learning Alliance including financial scrutiny. The Finance and Audit sub-committee ensures greater scrutiny over finances and risks and is helping support the senior team to develop new ways of working and identify possible solutions and strategies to cope with the ever changing fiscal and policy landscapes. The day to day running of the company is devolved to the Chief Executive.

The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:

The trustees, who are also the directors of Care and Learning Alliance for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.

In preparing these financial statements, the trustees are required to:

- select suitable accounting policies and then apply them consistently;

- observe the methods and principles in the Charities SORP;

- make judgements and estimates that are reasonable and prudent;

- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.

The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In accordance with the company's articles, a resolution proposing that MacKenzie Kerr Limited be reappointed as auditor of the company will be put at a General Meeting.

Each of the trustees has confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditor is aware of such information.

The trustees' report was approved by the Board of Trustees.

Opinion

We have audited the financial statements of Care and Learning Alliance (the ‘charitable group’ and ‘charitable company’) for the year ended 31 March 2023 which comprise the consolidated statement of financial activities, the parent charity statement of financial activities, the consolidated balance sheet, the parent charity balance sheet, the consolidated statement of cash flows, the parent charity statement of cashflows and notes to the consolidated financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice)

In our opinion, the financial statements:

give a true and fair view of the state of the charitable group and charitable company's affairs as at 31 March 2025 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and the provisions available for small entities, in the circumstances set out in note 32 to the financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

the information given in the trustees' report for the financial year for which the financial statements are prepared, which includes the directors' report prepared for the purposes of company law, is consistent with the financial statements; and

the directors' report included within the trustees' report has been prepared in accordance with applicable legal requirements.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 requires us to report to you if, in our opinion:

proper accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of trustees' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit; or

the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the trustees' report and from the requirement to prepare a strategic report.

As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with the Acts and relevant regulations made or having effect thereunder.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company's financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and updating our understanding of the sector in which the company operates.

Laws and regulations of direct significance in the context of the company include The Companies Act 2006, and UK Tax legislation.

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the Responsible Individual (RI) drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the RI's review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, and to the charitable company’s trustees, as a body, in accordance with Regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charitable company’s members and trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company, the charitable company’s members as a body and the charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

MacKenzie Kerr Limited is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.

Investments

Material other expenditure

The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.

The notes on pages 19 to 41 form part of these financial statements.

Investments

Material other expenditure

The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.

The notes on pages 19 to 41 form part of these financial statements.

The notes on pages 19 to 41 form part of these financial statements.

The notes on pages 19 to 41 form part of these financial statements.

The notes on pages 19 to 41 form part of these financial statements.

The notes on pages 19 to 41 form part of these financial statements.

Care and Learning Alliance is a private company limited by guarantee incorporated in Scotland. The registered office is 40 Longman Drive, Inverness, IV1 1SU.

The financial statements have been prepared in accordance with the charity's Memorandum and Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

These financial statements consolidate the results of the charitable company and its wholly owned trading subsidiaries, CALA Direct Management Services, CALA Integrated Services, CALA Out of School Care and CALA Staffbank, on a line by line basis.

At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.

Designated funds comprise funds which have been set aside at the discretion of the trustees for specific purposes. The purposes and uses of the designated funds are set out in the notes to the financial statements.

Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.

All incoming resources are included in the statement of financial activities when entitlement has passed to the charity; it is probable that the economic benefits associated with the transaction will flow to the charity and the amount can be reliably measured. The following specific policies are applied to particular categories of income:

Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Income from donated goods is measured at the fair value of the goods unless this is impractical to measure reliably, in which case the value is derived from the cost to the donor or the estimated resale value. Donated facilities and services are recognised in the accounts when received if the value can be reliably measured. No amounts are included for the contribution of general volunteers.

Income from contracts for the supply of services is recognised with the delivery of the contracted service. This is classified as unrestricted funds unless there is a contractual requirement for it to be spent on a particular purpose and returned if unspent, in which case it may be regarded as restricted.

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.

Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.

Minor fixed assets, being those costing less than £500, are not capitalised.

Fixed asset investments are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in net income/(expenditure) for the year.

At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

The average monthly number of employees during the year was:

The average monthly number of employees during the year was:

The charity considers that the key management personnel comprise the Trustees and the Senior Management Team - who are the Chief Executive, Head of Finance and HR, Head of Services, Head of Quality, Learning & Workforce Developments and Head of Business Development & Communication. The total compensation, including social security and pension contributions paid to key management personnel for services provided to the charity was £266,152 (2024 - £249,537).

During the year an adverse court decision has resulted in Care and Learning Alliance making a settlement of £399,179. The charity had insurance in place to cover a significant proportion in relation to this issue of £182,381 and these accounts show the net payment required by the charity to meet this settlement.

The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.

Deferred income is included in the financial statements as follows:

The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.

The restricted funds of the charity comprise the unexpended balances of donations and grants held on trust subject to specific conditions by donors as to how they may be used.

Resolis:

Relates to income received from Resolis and held for future use in Resolis.

Play Highland:

Relates to income received for a play strategy review and re-draft.

Bord na Gaidhlig (Toddler Programme):

A new initiative in partnership with Bord na Gaidhlig and Highland Council, introducing play and positive parenting while promoting the development of Gaelic language.

Smart Start:

Is a health and well-being programme aimed at 3 to 5 year olds.

Keeping Children Safe:

Provides Child Protection training and advice for the voluntary and private childcare sector in the Highlands.

Children and Young People Early Intervention Fund:

To develop and deliver new e-learning modules in relation to the Children and Young People Early Intervention Fund.

Active Play:

Health and wellbeing play based programme in schools funded by NHS Highland.

Foundation Apprentice:

Qualification gained during S5 or S6 in Social Services Children and Youth People. Equivalent to a Higher it is a mixture of study and work based learning. We are in first year of delivery for 9 FAs.

Summer & Beyond

Provide opportunities for families to play, learn, socialise and be active within their communities..

Graduate Support Programme:

Funding received for a business development and growth project including identifying new services, funding opportunities and income streams.

Muir of Ord Parent Baby & Toddler Group

To support parents and young children in the community.

CALA Toddlers

To support parents and young children in the community.

The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.

Training and business development fund:

Developing innovative partnerships as a means of extending quality service delivery throughout Scotland.

Workforce Support:

An innovative new development programme to develop the internal Childhood Practice workforce within Care And Learning Alliance

Training and Development Post:

To encourage outreach training and development, targeting alternative markets as a means of sustaining core specialist skills within Care And Learning Alliance for the longer term.

Redundancy Reserve

The board has opted to designate funds equivalent to the amount expected to be incurred in terms of redundancy should the charity cease activities at the balance sheet date.

At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

There were no disclosable related party transactions during the year (2024 - none).

The charity had no material debt during the year.

In common with many businesses of our size and nature we use our auditor to assist with the preparation of the financial statements.