Children Australia 36(2): 66-73 This article describes developments in residential childcare services in Scotland and the influence of various policy trends; in particular, it draws on the work of the National Residential Child Care Initiative, a major government-led review that reported in 2009. The development of small-scale residential units, the emergence of a `mixed economy’ of provision and a focus on staff training are key features of residential care for children in Scotland. The sector has received strong central government affirmation for two decades, notwithstanding a gradual reduction in its overall size. The article focuses on developments over the past 10 years and identifies a number of `drivers’ that aim to promote improvement, including staff training and the promotion of interprofessional collaboration. The emergence of specialist education and health services for `looked after children’ is noted. The relative underemphasis, until recently, on specific theories of care or particular therapeutic approaches is considered. Constraints on improvement are also considered; these include the fragmentation of provision and the operation of markets, the pressure on places and a high level of placement breakdown.