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How the 2024/2025 Funding Entitlement Changes Impact Childcare Businesses

The 2023 Spring budget has resulted in significant extensions in their free childcare scheme, aiming to double the support available to working parents. For many nurseries and other Early Years providers, these changes present both challenges and opportunities. In this blog we explore what the upcoming funding entitlement changes mean for nurseries and the impact they may have as well as some strategies on how to make sure you are ready.

Understanding What’s Changing

The government’s extension of free childcare will be phased in a staggered roll out:

  1. From April 2024, parents of 2-year-olds will receive 15 hours of free childcare per week
  2. From September 2024, this support extends to children aged 9 months to 3 years
  3. From September, the funding entitlement will extend to 30 hours per week for children from 9 months to school age

These changes will make childcare more accessible and will support working parents, but they also mean nurseries and other Early Years providers will need to adapt quickly to increased demand and strain on operations.

A table showing funded childcare entitlement broken down by timeframe and age group

What Impact Will Childcare Funding Changes Have on Nurseries?

While the 2024/2025 changes in funding entitlement aim to provide better support for families, some nurseries may face challenges in adapting to these updates.

Increased Demand

Although the sector’s response has been mostly positive to the changes, there are some concerns around increased demand. With increased demand, parents may struggle to find their child a place at a local nursery. Some providers are already at full capacity with huge waiting lists, whilst others have places but not enough staff to fulfil the legal ratios.

Recruitment Challenges

Recruitment of qualified staff has been a challenge for some time, however, the government has recently launched a campaign for Early Years careers to tackle this for the future.

Administrative Adjustments

With the increased funding and operational demands, nurseries may also need to adjust their administrative processes to ensure efficiency and compliance.

Alongside this, as a whole the sector is already struggling financially, with an increased number of settings closing their doors for good last year. However, the local authorities that have published the funding rates all seem to be around £8 which is a huge improvement on the approximately £5 providers were getting previously.

How Nurseries Can Adapt

We have compiled a few strategies and ideas to help you navigate these changes smoothly:

Staffing and Scheduling

Consider reviewing your staffing structure to ensure you have sufficient resources to meet the increased demand for places. Collaborate with your team to establish flexible shift patterns in case you need to make adjustments to align with parents’ needs. If you have vacancies, start the recruitment process in advance to give time to find new staff and train them. You can post jobs for free here on Jobs by eyrecruit, a job board dedicated to the Early Years sector.


Keep parents informed and involved in the process to reduce the number of questions you receive later on. Communicate the funding changes, eligibility criteria, and how they will impact their child’s nursery journey. Review and update your nursery’s policies to reflect the revised entitlements, ensuring transparency and clarity. Effective systems, such as Early Years parent engagement software, will need to be in place to manage communications with an increased number of parents.


Review and invest in technology to help streamline your administration processes and save your team precious time that could be spent with your children. eyworks nursery management system allows you to add funding terms, bulk assign funding to children, copy funding entitlement across terms and set multiple 2 year funding rates to calculate an accurate income forecast. Funding is then automatically added to a child’s invoice alongside any formulated consumable charges making administration quick and easy.

Financial Planning

Analyse and reassess your nursery’s financial plans to accommodate the changes in funding and ensure consumables and extra services are priced accordingly. Seek professional advice to ensure your budget remains sustainable while delivering exceptional care and education to children.

By understanding the adjustments to funding hours and eligibility criteria you can proactively address the impact on your nursery. Embracing strategic approaches such as staffing adjustments, effective communication, collaborations, and financial planning will aid in successfully implementing these changes while maintaining the highest standard of care for children entrusted to your nursery. Contact our team to learn more about how you can adapt with eyworks on

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