The government has announced a 45 per cent uplift to the early years pupil premium (EYPP) alongside money to help nurseries deliver additional places and staff.
The EYPP will be increased to up to £570 per eligible child a year. This aims to target the most disadvantaged children most likely to live in “childcare deserts”, according to a government statement.
The Department for Education has also announced a £75 million expansion grant to help nurseries, childminders and other early years providers deliver 70,000 places and 35,000 additional staff needed for next September. It will be allocated later this year.
Early years funding for 2025-26
Total spend on early years will reach £8 billion this year - £2 billion more than last year, the DfE said.
On average, funding rates for 2025-26 will reach £11.54 for under twos, £8.53 for two-year-olds, and £6.12 for three- and four-year-olds.
These will vary slightly between local authorities.
The plans are part of a target announced by prime minister Keir Starmer last week for 75 per cent of children to reach a good level of development when they start school by 2028.
Tes revealed earlier this year that Sir David Bell had called for an increase to the EYPP in an unpublished letter setting out his early years review findings.
Sarah Ronan, director of the Early Education and Childcare Coalition, said: “We are really pleased to see the government back its Plan for Change with this hugely significant increase to the EYPP - something that members of the Coalition have long called for.
“A reformed early education and childcare system won’t happen overnight but decisive action on educational disadvantage must be the starting point for that work.”
The education secretary has said high-quality early education “is the cornerstone of our promise to ensure tens of thousands of children are school ready every year”.
Chris Paterson, co-CEO of the Education Endowment Foundation, said to see an impact of the uplift to the EYPP it will be “crucial that the right support is in place to help settings make evidence-backed decisions about how best to spend this additional resource”.
Uplift will ‘fail’ to cover costs
Neil Leitch, chief executive officer of the Early Years Alliance, welcomed the funding uplift but warned that the funding rates “will fail to even come close to covering the cost of changes to national insurance contributions and wage increases”.
He said: “By not accounting for these changes in next year’s rates, countless nurseries, pre-schools and childminders will be left with no option but to raise costs, reduce places or simply close their doors completely.”
Mr Leitch added that the funding gap will place “even more financial pressure” on early years providers and will likely make the sector’s “ongoing staffing crisis even worse”.
Nick Harrison, chief executive of the Sutton Trust, said the uplift to the EYPP will bring funding support for disadvantaged young children “closer to the level provided in schools” and help incentivise settings to take in more children from poorer backgrounds.
However, he added that more was needed to ensure disadvantaged children receive the same level of early years education as their peers.
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