The Department for Education has launched a consultation on plans to reform the funding system for early years education, with proposals aimed at improving access to childcare, strengthening support for children with special educational needs and disabilities (SEND), and creating a fairer, more transparent funding model.

The consultation seeks views on changes to how SEND funding is allocated for early years settings, updates to the data used in the Early Years National Funding Formula (EYNFF), and revisions to local funding rules for local authorities. Most of the proposed reforms would come into force in the 2028–29 financial year, with some transitional arrangements beginning in 2027–28.

The government says the current system has become overly complex, with multiple funding streams and significant variation in how funding is distributed across the country. It argues this has created a "postcode lottery", making it harder for providers to understand funding allocations and for disadvantaged children and those with SEND to access the support they need.

Among the proposals are changes to better target funding towards low-income families, simplify SEND funding by introducing more upfront support for providers, and ensure funding more accurately reflects the cost of delivering early years education in different parts of the country.

The government currently spends more than £9.5 billion a year on early education and childcare, with over £1 billion in additional investment this year compared with 2025-26. Ministers say the reforms will simplify funding arrangements, reduce bureaucracy and help ensure more government funding reaches providers delivering high-quality early education and childcare.