Pre-school Education: Finance
The question
To ask the Secretary of State for Education, what assessment she has made of the adequacy of early years funding rates in helping to ensure the financial sustainability of pre-school and nursery settings.
Answered by Olivia Bailey
The government expects to provide over £9.5 billion for the early years entitlements in 2026/27, more than doubling annual public investment in the early years sector compared to 2023/24, as a result of successfully rolling-out the expansion of government-funded childcare for working parents.
In 2026/27, we are delivering an above-inflation increase on 2025/26 entitlements funding rates. This increase allows the national average funding rate to continue reflecting forecast cost pressures on the early years sector, including the National Living Wage announced at Autumn Budget 2025, and goes further, taking into account the wider workforce pressures felt by the sector since April 2025.
In December 2025, we announced above inflation national average increases of 4.95% to the 3 to 4-year-old hourly funding rate, a 4.36% increase to the 2-year-old hourly funding rate, and a 4.28% increase to the 9 month to 2-years-old hourly funding rate.
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