2025 Government Spending Review
2025 Government Spending Review
The recent 2025 Spending Review brought major news for the early years sector, with the government committing to a £1.6 billion annual uplift by 2028–29 to support the continued expansion of funded childcare. In addition, £370 million will be invested over the next four years to create more school-based nurseries.
This funding supports the growing roll-out of extended entitlements for working parents, including 30 hours for eligible two-year-olds and younger children from nine months old. Importantly, the government has committed to increasing funding rates as take-up grows, aiming to reduce the financial pressure on providers delivering these places.
A key feature of the announcement is a plan to develop 3,000 new school-based nurseries. These are part of a wider “opportunity mission” to increase access to early education, especially in underserved areas.
While increased investment is welcome, many sector voices have raised concerns: Independent and voluntary settings are warning of a potential “two-tier system”, as school-based nurseries often benefit from advantages like business rate relief, employer national insurance rebates, and free school meals. The sector continues to call for fair funding to be passed on to all providers, not just schools, to ensure sustainability across the board.
At Morton Michel, we know that changing funding dynamics can have real operational and financial implications. Whether you're running a nursery, pre-school or out-of-school setting, we’re here to support you in navigating these changes.
If you have questions about how your insurance needs might be affected by new contracts, funding arrangements or expanded provision, our team is here to help.