Question to the Department for Education:

To ask the Secretary of State for Education, what assessment her Department has made of the impact of declining birth rates on (a) the financial sustainability and (b) capacity of nurseries in England; and what steps she is taking to support early years providers impacted by these trends.

It is the department’s ambition that all families have access to high quality, affordable and flexible early education and care, giving every child the best start in life and delivering on our Plan for Change.

We use the latest Office for National Statistics (ONS) population estimates (to 2023) and ONS population projections (2022-based ‘principal’ scenario) to inform our internal national level early years funding forecasts. ONS population estimates suggest that the 0 to 4-year-old population in England decreased by 6% in the five years to 2023, driven by falling birth rates. The ONS principal projections assume that fertility rates decrease slightly in the short-term, remain stable in the medium term and increase slightly in the longer term.

These projections are used to ascertain funding and capacity needs and to support the sector as they prepare to deliver the final phase of expanded childcare entitlements from September 2025. From this year, we plan to provide over £8 billion for the early years entitlements, a more than 30% increase compared to 2024/25. The early years pupil premium rate has increased by over 45% compared to the 2024/25 financial year, equivalent to up to £570 per eligible child per year. We are also providing further supplementary funding of £75 million for the early years expansion grant and £25 million through the forthcoming National Insurance contributions grant for public sector employers in early years.