Posted on by Sara

Why higher funding is the cornerstone of a sustainable early years sector

Early years settings in England face a simple math problem.

Most government-funded early education and childcare places are underfunded, particularly those for three- and four-year olds, making it nearly impossible for providers to raise wages without increasing fees or cutting quality.

Let’s break it down:

1️⃣ Funding doesn’t match delivery costs
The DfE’s own data (e.g. the Childcare and Early Years Provider Survey) shows that in many areas government funding falls below the true cost.
Providers absorb the gap — often by having to keep wages low.

2️⃣ Staff costs represent 70–80% of nursery budgets
If funding stays flat, there’s no sustainable way to increase pay without cutting elsewhere or raising parent fees.

3️⃣ Raising wages without funding creates instability
Good intentions aren’t enough. Raising minimum wages or qualification standards without matching investment risks burnout, closures, and lower quality.

4️⃣ Other countries are doing better — because they spend more
The UK’s public spending on early years remains well below the OECD average (as % of GDP or per child).


🇮🇪 Ireland, 🇩🇰 Denmark, and 🇫🇷France are stabilising the workforce by increasing funding and linking it to pay and quality.

If we want a skilled, stable early years workforce, we have to fund it like one. That means treating early education not just as a service, but as a public good — one that deserves proper public investment.

Extra resources – France

Key features:

  1. Universal access for 3–6-year-olds
    • Preschool (école maternelle) is free, compulsory, and publicly funded.
    • Staff are civil servants, often with master’s-level training, paid on par with primary school teachers.
  2. Mixed provision for under-3s, but with strong state support
    • For children under 3, a mix of public crèches, private non-profit centres, and registered childminders.
    • Public subsidies help reduce parent fees and stabilise workforce pay.
  3. National training and pay frameworks
    • Staff in écoles maternelles are trained to a high pedagogical standard.
    • Pay scales are regulated and tied to qualifications and experience.

Impact on workforce

  • Lower turnover in public provision.
  • Higher status and professional identity among staff working with 3–6s.
  • Significant investment in quality and inclusion.

Sources

  1. OECD (2022) – Starting Strong V: Transitions from Early Childhood Education to Primary Education
  2. European Commission (ECEC Country Reports)
    France’s profile

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