Topics shaping strategy in quarter 1 2026
Topics shaping strategy in Q1 2026
Throughout Q1 2026, our Research & Insight team found that three themes were ever present during events and discussions with Nursery leaders: quality and regulation, finances, and the role of technology.
1. Quality, inclusion and regulatory change
The sector is being asked to raise the bar on quality and inclusion at the same time as navigating a shifting regulatory landscape.
Government messaging around the new Report Cards, Best Start in Life hubs and SEND reform has largely been received positively. Additional SEND funding, universal SEND training for educators and a stronger emphasis on inclusive environments are widely welcomed. There is pride in the sector’s role in improving children’s long term outcomes.
But providers are cautious. The Report cards have created new challenges and are yet to address some of the obstacles they promised to. The details of hubs, local authority capacity and the practicalities of SEND funding still feel uncertain. Many are waiting to see whether the promised 2028 outcomes targets are backed by realistic tools and timelines, not just ambition.
2. Funding, finances and consolidation
Smaller groups and single site settings in particular are still running finances on spreadsheets and basic tools, struggling with invoicing complexity and termly funding cycles. There is appetite for better management systems, but also concern about cost, implementation and data security.
At the same time, consolidation is clearly accelerating. We heard multiple examples of groups using a blend of greenfield development, acquisitions and, increasingly, franchising. Franchise models are seen as a way to grow with less capital at risk, with franchisees carrying more of the financial burden.
Larger groups spoke openly about their growth strategies. Cultural due diligence, integration teams, safeguarding reviews from day one, and sensitive decisions around rebranding versus preserving local identities were consistent themes. The message to potential sellers was that acquisition does not have to be “the worst day” for a setting but values and communication must be handled carefully.
3. Technology, AI and cyber as a safeguarding issue
Q1 2026 confirmed that technology is now embedded in every major conversation about the future of early years.
On AI, the narrative has moved beyond novelty. Leaders are exploring practical use cases; from reducing admin and improving communications with parents to forecasting occupancy and supporting training. At the same time, there is growing concern about the risks of generic ‘open’ tools. Key concerns include data protection and safeguarding to the risk of inaccurate or inappropriate outputs.
The more uncomfortable conversations emerged around cyber security. A high profile cyber attack on a large nursery group last year still looms large. Across panels and Q&A, we saw:
• Low confidence in existing cyber knowledge and controls
• Limited awareness of what a practical cyber incident plan looks like
• Confusion and some distrust around cyber insurance
Crucially, many leaders do not yet connect cyber to safeguarding in the way they instinctively would for physical environments or personnel. Yet the message from experts was that digital safeguarding is now integral to protecting children, staff and families.
From the Research and Insight team’s point of view, this is the area where the gap between emerging risk and existing practice is most visible, and where sector specific guidance is most urgently needed.
Sources:
1. https://www.nurseryworld.co.uk/content/news/sector-told-to-embrace-ai-but-early-years-educators-will-never-be-replaced-by-robots
2. https://ndna.org.uk/coram-childcare-survey-2026-findings/
3. https://www.gov.uk/government/publications/every-child-achieving-and-thriving
4. https://www.gov.uk/government/publications/early-years-funding-2026-to-2027
5. https://www.mortonmichel.com/news/ofsteds-new-early-years-report-cards
This article is for general information only and is not advice. The views expressed may change and may not be complete or up to date. No responsibility is accepted for any loss arising from reliance on this article. You should seek professional advice before acting on any information contained here.