Early Years Under Pressure – Funding Gaps and Wage Rises Threaten Stability

Rising costs and frozen budgets

Proposed increases to the National Living Wage (potentially reaching up to £12.86 per hour) have raised significant concern across early years settings already operating within extremely narrow financial margins. At the same time, more than £65 million of early years funding remains unspent by local authorities just weeks before the expansion of 30 hours childcare entitlement begins.

At a glance

• National Living Wage projected at £12.55 to £12.86 per hour

• £65 million in early years funds still not allocated by local authorities

• Expansion of funded childcare begins September 2025

“Funding and workforce readiness must move together,” says Findel Education. “Without both, settings face impossible tension between quality and survival.”

The sustainability challenge

Early years learning is fundamental to long term attainment, confidence and social mobility. If wage costs rise faster than funding allocation, settings risk reducing places, narrowing provision or exiting the sector entirely. This threatens access, particularly in lower income regions.

Supporting long term stability

Findel supports early years educators through Hope Education, GLS and Philip Harris — focusing on durable, reusable and outcome aligned resources that reduce replacement cycles and protect quality even when budgets are constrained. Selection bundles remove procurement complexity, streamline purchasing decisions and reduce operational strain at practitioner level.

Key takeaways

• Increasing wage costs and funding delays threaten early years stability

• The impact of change will not be spread evenly across the country

• Findel supports sustainable provision with durable, EYFS aligned learning tools