Parents facing fresh early years costs rises and place shortages as providers struggle to deliver government-funded offers, new survey finds

Published: 4 Mar 2026

Key findings include:

• More than 8 in 10 (85%) of those offering three- and four-year-old funded places say their current funding rate is lower than the cost of delivering places
• One in six (16%) of those offering three- and four-year-old place say that they have reduced the number of three- and four-year-old funded places they offer
• Half (49%) say that they have limited or stopped taking on new children over the past six months due to a lack of sufficient staff.

Parents across England are likely to experience higher early years costs and a growing shortage of places in the months ahead, as nurseries, pre-schools and childminders struggle to remain financially viable as a result of government policies, a sector-wide survey by leading early years membership organisation the Early Years Alliance has found.

The government has identified the early years as a key policy area, with ‘set[ting] every child up for the best start in life’ part of its ‘Opportunity mission’, and ensuring that at least 75% of children reach a good level of development in reception now an official government ‘milestone’.

However, despite this, according to the online survey, which received over 1,000 responses from early years providers, many settings in England are struggling to deliver affordable, flexible early years places as a result of continued financial pressure and staffing shortages.

The findings come as new independent research from Dr Gillian Paull from the London School of Economics, undertaken on behalf of the Early Education and Childcare Coalition, found that a combination of national minimum wage rises and recent employer National Insurance contributions have increased provider delivery costs by 13% since 2023. When combined with other cost pressures, these government policies have contributed to an overall delivery cost increase of 21% over this period.

A recent survey from the National Foundation for Education Research (NFER) also warned that the Government’s plans for delivering funded early years places “could struggle unless growth in early years staffing is reinvigorated”.