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Please find a comment below from the Early Years Alliance confirmation of the local authority funding rates for 2025/26, which can be accessed . 

The government also announced a £75m expansion grant to support settings to deliver the final phase of the early entitlement expansion and a 45% increase to the Early Years Pupil Premium, taking it to £570 per eligible child per year.  

Commenting on confirmation of 2025/26 local authority funding rates, Alliance CEO Neil Leitch, said:   

“While any increase of funding is of course welcome, the fact is that today’s funding rates will fail to even come close to covering the cost of changes to National Insurance Contributions and wage increases.   

“With our own research showing the National Insurance changes will cost settings more than £18,000 a year what providers needed was a commitment to mitigate the impact of these changes. Yet in reality, 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.   

“What’s more, the Treasury may claim that the rates announced today takes into account the upcoming rises to the National and Living wages, but we know it will do little – if anything at all – to support settings to meet these increases and ensure wage differentials between junior and senior staff. As such, not only will it place even more financial pressure on settings but it is likely to make the sector’s ongoing staffing crisis even worse.    

“Today was an opportunity for the Treasury to show it recognises the catastrophic impact that the National Insurance and wage changes will have on the sector. Not only has it turned a blind eye to this, but it will have clear repercussions on families expecting to take advantage of the ongoing expansion."  

Commenting on the news of the £75m expansion grant and an increase to the Early Years Pupil Premium, Neil said:  

“For far too long, the Early Years Pupil Premium has remained extremely low – both when compared to the remainder of the education sector and for it to translate to meaningful support for providers. As such, confirmation that it will increase is to be welcomed.  

“That said, if this to truly result in long-term support for the sector it must mark the first step towards bringing the Early Years Pupil Premium in line with primary levels.    

“On top of this, the news that the government will introduce a £75m expansion grant to support the ongoing expansion is positive, which we hope will support settings to sustainably increase their capacity. However, the devil is in the detail, and we look forward to hearing more about how this will work in practice and what it will mean for the providers in the coming weeks and months.   

“Of course, while any funding increases are encouraging, long-term solutions – including a holistic staffing strategy and funding which reflects the real-terms cost of delivering high-quality early education and care – are absolutely key if the sector is to be both sustainable and able to meet ever increasing demand both now and in the future.”