Is the Government’s under-2s funded childcare sustainable?

The previous Conservative UK government’s recent pledge to extend funded childcare hours to children under two, which also has the commitment from the incumbent Labour government has been widely welcomed by parents looking for relief from astronomical childcare costs.

Especially as the average cost of full-time nursery (50 hours a week) for a child under two in England is £12,425 in 2025. This equates to a fall of 22% from 2024, according to the Coram Family and Childcare charity.

But behind the headlines, early years providers and sector experts are raising serious concerns about whether this policy is financially — or operationally — sustainable. So, what are the concerns being raised?

Are there more hours but less Support within Goverment funded childcare?

While the offer of additional “free” childcare hours is well-intentioned, the funding allocated to providers often falls significantly short of the actual cost of delivering high-quality care. This growing gap is forcing nurseries into tough decisions – cut costs, increase parent contributions, or, in many cases, either opt out completely or consider closure.

In essence, this has highlighted how we are trying to stretch an already underfunded model even further. The concerns surrounding this are that we risk a system being overwhelmed by demand without the support needed to maintain quality or sustainability.

A recent survey by the Early Years Alliance found if the government fails to address the financial pressures on nurseries in England, 87% are likely to introduce or increase charges for optional extras such as meals, consumables and trips.

Another recent survey by the National Day Nurseries Association (NDNA) warned the previous Conservative Government that the average shortfall was £2.36 per hour per child for a 15 hour place. Therefore, nurseries are unlikely to afford to cover additional costs.

Is funded childcare doing enough to support its workforce?

At the centre of this issue is the dedicated early years workforce. Educators and carers are the backbone of any nursery setting—yet many face low pay, limited career progression, and increasing workloads. Recruitment and retention have become ongoing challenges, with many experienced professionals choosing to leave the sector entirely.

Expanding nursery access without investing in the workforce simply isn’t viable. The numbers may look good on paper, but without well-supported staff, quality care becomes harder to deliver.

Nurseries are under a lot of financial pressures due to a rise in energy costs and staff costs as a result of a hike in the contributions employers pay for employees’ National Insurance. In April 2025, the minimum wage is also set to increase by nearly 7% putting extra financial pressure on nurseries.

Is there enough investment in Goverment funded childcare to make an impact?

Early years education plays a vital role in a child’s development. It’s not just about supervision—it’s about learning, socialisation, and laying the foundations for life. But when providers are forced to cut corners due to funding shortfalls, that quality is put at risk.

According to the Education Endowment Foundation (EEF), improving the quality of early education has a massive impact for every child, and is especially important for socio-economically disadvantaged children. Research evidence confirms that high-quality early education is one of the best ways to ensure that children can thrive and succeed in school and later education, regardless of their background.

We cannot afford to treat early education as a numbers game. True progress means ensuring that every place offered is backed by the right resources, training, and investment needed to make a lasting impact.

What needs to change withinin Goverment funded childcare?

To truly fix the system we need to shift the conversation from quantity to quality and sustainability. That means:

• Realistic funding that covers the actual cost of care
• Better pay and support for early years professionals
• A long-term strategy for the sector that puts children, families, and staff first

Without these changes, more nursery places will be little more than a temporary fix for a deeply rooted issue.

The expansion of government-funded childcare has the potential to change lives—but only if it’s done right. The Government must tackle the deeper structural issues threatening the early years sector.

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