I'm an early years practitioner and can possibly offer my understanding of why funding is being withdrawn from non-local authority nurseries?
The government has committed to 3 and 4 year olds having a funded part time nursery place, and with the new Children & Young People Act that is now extended to vulnerable 2 year olds. Each local authority is responsible for administering the places.
In addition to this, the government are pursuing a radical change in early years education moving away from Primary teachers in nurseries to degree-qualified early years specialists.
In Glasgow this has meant that many of the council nurseries are being changed to family centres to cope with demand for extended hours, holidays and the additional children. This is increasing the capacity available.
Let's say for example that Glasgow City Council had 100 preschool children looking for a nursery place, but only 85 places available. They'd then "buy" additional places from private providers, the catch being that they're paying a private company the same cost per session as the cost in a council nursery so inevitably it's never enough to cover the fee from the private nursery which is at the end of the day, a business making a profit.
So when the council opens another nursery, or takes on additional staff to increase the capacity for more children they then don't need those 15 places they were buying from private nurseries and so they withdraw the funding (because it's being put into council nurseries).
The wider argument of course is that there may well be places available, but for most of us those places are inaccessible. We had our youngest in a council nursery this year which was excellent and we loved it, but the restricted hours made getting to work very, very difficult.