Pre-school Education: Finance

The department has been clear in our commitment to the early years as our number one priority. It is our ambition that all families have access to high-quality, affordable and flexible early education and care, improving the life chances for every child and the work choices for every parent. That also means ensuring the sector is financially sustainable and confident as it continues to deliver the entitlements and high-quality early years provision going forward.

That is why, despite tough decisions to get our public finances back on track, the department is continuing to prioritise and invest, supporting early education and childcare providers with the costs they face.

In the 2025/26 financial year alone, this government plans to spend over £8 billion on early years entitlements and we announced the largest ever uplift to the early years pupil premium, increasing the rate by over 45%, compared to 2024/25 financial year, equivalent to up to £570 per eligible child per year. On top of this we are providing further supplementary funding of £75 million for the early years expansion grant to support the sector as they prepare to deliver the final phase of expanded childcare entitlements from September 2025, recognising the significant level of expansion needed and the effort and planning this will require.

We are also providing £25 million through the forthcoming National Insurance contributions grant for public sector employers in the early years.