More than half of England’s maintained nursery schools struggle to cover core costs

A survey of maintained nursery schools (MNS) in England carried out by early years charity Early Education in association with education unions the NAHT and UNISON, has found that:

• 42% are not confident about their future beyond the next 12 months, and 4% are unsure whether they could get through the next 12 months.
• 40% were in deficit in 2024-25 and at least 35% expected to be in deficit in 2025-26 (18% had not yet set a budget).
• Only 21% of MNS are confident of being able to continue to offer the same level of services and places within current budgets. 
• 71% of MNS are planning further cuts or cost savings, with significant impact on staffing and services

MNS are facing a perfect storm of challenges with long-running structural underfunding; shifting patterns of demand resulting from the government’s new entitlements for working parents and changing demographics including falling birth rates in many areas; and an unmanaged market allowing the opening of new private, voluntary and independent providers (PVIs) and primary school-based nurseries without regard to quality or sufficiency of existing provision.  This is creating a highly volatile situation in which it is increasingly challenging.to plan for the number of children who will be on roll and budget accordingly.

MNS are keen to support government priorities, and if eligibility for the Labour’s School Based Nursery capital grants were to be extended to them, 69% have capacity to expand to meet demand.  However, 16% of respondents expected the impact of the first round of funding, which was only open to primary schools, would be to put their viability at risk through further competition from local primary school nurseries due to insufficient safeguards within the application process to identify where there was already sufficient high quality provision in place.

The survey showed concerns about rising needs in the face of falling resources in relation to the growing prevalence of poverty and deprivation and rising need from children with SEND.  For instance, support funding for children with SEND does not cover the 30 hours.  There are also concerns about increased demand to admit children with SEND where other providers can or will not meet their needs.

The government has shown that it values the unique role of MNS and provides an additional funding stream recognises that they require additional funding to cover the costs underpinning the staffing and structure that allow them to provide the highest quality of early childhood education and care and meet the needs of the most vulnerable children.  However, the above reported financial challenges demonstrate that the funding formula needs review, including to ensure that the funding reaches MNS as intended.  Fifteen local authorities are failing to pass on a total of £3.5m of MNS supplementary funding (MNSSF) to their MNS, which could have been used to address funding deficits which put schools at risk of cuts and closure.

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

“Maintained nursery schools are the perfect vehicle to deliver the government’s Opportunity Mission and Best Start In Life goal, including the milestone to ensure 75% of children reach the so-called ‘Good Level of Development’.  However, they urgently need an overhaul of their dedicated funding stream, as well as endorsing the rest of the early years sector’s call for an overhaul of the funded entitlements to ensure that they are fully funded by government.  They illustrate that the most vulnerable children, including those experiencing economic disadvantage and SEND, do require additional funding to ensure they are enabled to fulfil their potential.  We urge government to look at the levers it has to enable MNS to provide the best possible return on the investment it makes in them.”

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

“Maintained nursery schools play a vitally important role in early years and in our education system as a whole. They offer the highest quality early education and care and disproportionately support children from deprived backgrounds and those with SEND. They are ideally placed to support the government’s drive to tackle child poverty. But their funding needs urgent attention. We would urge the government to ensure it invests in this crucial part of the Early Years sector at the upcoming spending review.”

The survey took place online in February-March 2025.  All 379 maintained nursery schools in England were emailed details of the survey with multiple reminders.  A total of 101 responses were received representing 119 schools (31% response rate).

Read or download the full report below.