Half of England’s maintained nursery schools unable to balance budgets as funding review looms

A recent survey reveals that many of England’s 376 maintained nursery schools face severe financial struggles. By 2025-26, 35% expect deficits for the year, while 23% already have cumulative losses. Over a third plan to dip into reserves, and half doubt they can balance their budgets for 2026-27. Only 21% are confident they can maintain current services with existing funding. Meanwhile, 72% are planning cuts, freezing recruitment, reducing staff, or trimming services, as they struggle to stay afloat.

The survey reveals that MNS face a perfect storm: long-term underfunding, rising staffing costs, inadequate SEND funding, and a growing gap between delivery costs and funding rates. As schools, MNS must employ a headteacher, SENCO, and qualified teachers, meeting the same standards as other schools and academies, ensuring high-quality, inclusive education, but also incurring higher fixed costs.

MNS are vital for supporting disadvantaged children and those with SEND. The 2026 survey highlights that insufficient SEND funding remains a major budget pressure. Rising complex needs, increasing safeguarding and family support demands, and challenges recruiting skilled staff strain resources. Often the first, and sometimes last, resort for children with unmet needs, MNS bear a heavy burden despite funding shortfalls.

The survey exposes a stark disconnect: existing MNS-specific funding no longer reflects the reality of their cohorts. It is based only on 3- and 4-year-olds receiving the universal 15 hour entitlement, which has plummeted from 83% of children in MNS in 2016-17 to just 59% in 2024-25, as MNS are boosting take-up of working-parent and under-two entitlements. As a result they are penalised for supporting working families. Meanwhile, business rates drain millions from these vital schools, with costs soaring up to £137,500 annually.

Efforts to sort out business rates have stalled since 2021, and the early years funding formula was last comprehensively reformed in 2016. As the government vows to reach 75% of children with a good start by 2028, the Save Maintained Nursery Schools coalition demands urgent reform. We need fair funding that covers actual costs, ensures transparency, and recognises MNS’s crucial role, plus action on historic deficits, business rates, SEND funding, and their vital place in Family and Practice Hubs. The future of early years hinges on it.

Early Education’s Chief Executive, Beatrice Merrick, said:

“Government has promised a review of early years funding this summer.  This must include a review of MNS funding as well as of the wider system.  MNS have been left in limbo for too long, leaving far too many at risk of closure, which would have a devastating effect on local communities.  Loss of their expertise and dedicated focus on the needs of the most vulnerable children would be a major obstacle to the government’s Best Start in Life strategy and SEND reforms.”

Paul Whiteman, general secretary of school leaders’ union NAHT, said:

“NAHT believes that a high quality early education is vital in giving all children the best possible start in life.  It is  an investment in our youngest children when they are developing most rapidly; spending decisions should be based on that.

 We believe that there needs to be – as there is in each Maintained Nursery School – an appropriately qualified teacher in all nurseries and school settings.  Our Maintained Nursery Schools have a vital role to play in systems leadership and in the teacher-led support they offer the wider sector.  So – as this survey makes clear – they need to be supported through appropriate and sufficient levels of government funding.  To do otherwise would be to fail a generation of our youngest learners.”

National Education Union general secretary, Daniel Kebede, said:

“The government cannot deliver its early years ambitions while maintained nursery schools are being left to absorb the cost of underfunded entitlements, rising SEND need and unresolved business rates pressures. MNS are public education settings with highly qualified staff and a proven record of supporting children and families in the most disadvantaged communities. They need long-term funding security, not another short-term patch. Reforming the supplementary funding formula so it covers all funded hours must be a priority.”

UNISON head of education, Mike Short, said:

“If ministers are serious about giving every child the best start in life, they need to provide the full support required to safeguard the vital work maintained nursery schools do.

“There’s a crisis in early years education and, without proper funding, it’s the most disadvantaged kids who will continue to miss out and be left behind.”

The data for this report were gathered through an online survey carried out in February-March 2026.  Early Education, NEU and NAHT circulated details to their members and MNS contacts, inviting participation.  We received 158 responses covering (after the removal of duplicates) 167 of the 376 maintained nursery schools which are currently open, representing a 44% response rate.  Some respondents answered once on behalf of multiple schools, and the figures have been weighted to reflect the number of schools covered. Replies were received from schools in 64 of the 102 local authorities which have one or more maintained nursery schools.