UK nurseries and early years settings are going through an incredibly tough time right now. Whilst the government is trying to expand childcare options for families, the reality on the ground is quite different. Settings are struggling with serious staff shortages and funding pressures that are threatening their very survival. The situation has got particularly difficult since National Insurance contributions went up, creating what many in the sector are calling an existential crisis.

The Staffing Shortage: It's Worse Than You Think

Let's talk numbers, because they really tell the story. Research from the National Day Nurseries Association shows that seven out of ten nursery providers simply don't have enough staff to run at full capacity. On average, each setting is carrying 4.2 full-time equivalent vacancies (National Day Nurseries Association, 2025). That's a lot of empty positions that can't be filled.

And it gets more concerning. The Department for Education estimates that we need about 35,000 additional staff members above December 2023 levels just to meet demand for the autumn 2025 expansion (Department for Education, 2024). Where are all these people going to come from?

The retention picture isn't looking great either. New research from the Early Education and Childcare Coalition reveals that 57% of nursery and pre-school staff are actually thinking about leaving the sector altogether (Early Years Alliance, 2025). Imagine that, more than half of the workforce considering walking away. This isn't just about numbers, it's about the quality and continuity of care that children receive during those crucial early years.

Why Are People Leaving?

It's not hard to understand why staff are leaving when you look at the conditions. Ofsted has highlighted several key issues: low pay, challenging working conditions, not enough opportunities for professional development, and poor staff wellbeing (Ofsted, 2024). Early years workers earn considerably less than similar workers in other sectors, making it really difficult to attract and retain qualified professionals.

The National Foundation for Educational Research points out that staff retention is a significant challenge, particularly for group-based providers, which puts the whole expanding workforce at risk. It's a bit of a vicious cycle, really. When people leave, the remaining staff have to pick up the slack, which leads to burnout, which leads to more people leaving.

On top of that, early years workers with lower qualification levels often report limited opportunities for career progression. It's hard to stay motivated when you can't see a path forward in your career.

The Money Problem

If the workforce crisis wasn't enough, there's also a serious funding crunch happening. The government's decision to increase National Insurance contributions from April 2025 has hit private and voluntary early years providers particularly hard. Unlike schools and maintained nurseries, these settings don't get extra government funding to cover these increased employment costs.

The numbers are pretty stark. Nursery staffing costs are rising by an average of 15%, with more than half of that increase down to National Insurance changes (Early Years Alliance, 2026). The Early Years Alliance reported that National Insurance increases added £1.2 million to their wage bill, forcing them to close 11 of their 38 settings (Early Years Alliance, 2026). That's 11 nurseries gone, just like that.

Across the sector, 92% of nurseries say that current government funding doesn't cover their costs. Even more worrying, 85% of those who know their new funding rates for 2025 to 2026 say they'll be making a loss on each place they offer (Early Years Alliance, 2026).

What Does This Mean for Families?

Unfortunately, these financial pressures don't just disappear. They get passed on. Research shows that 96% of nurseries are going to have to increase fees to parents by an average of 10%, whilst 39% are thinking about offering fewer places (Early Years Alliance, 2026). This is especially difficult in disadvantaged areas, where nurseries are already struggling the most with these costs. It's a real worry because it could widen educational inequality right from the start.

What's the Government Doing?

To be fair, the government hasn't been sitting idle. They've announced £45 million to create 300 additional school-based nurseries, potentially providing up to 7,000 more places by September 2026 (Department for Education, 2025). They're also offering tax-free payments of £4,500 to attract and retain 3,000 more early years teachers in settings serving the 20 most disadvantaged communities (Department for Education, 2025).

For 2026 to 2027, they've increased the pass-through rate from 96% to 97%, meaning local authorities must pass more funding directly to providers (Department for Education, 2025). Funding rates have also been uplifted to account for workforce cost pressures, National Living Wage increases, and the impact of moving to a termly funding model for three and four-year-olds.

But Is It Enough?

Many people working in the sector say these measures, whilst welcome, fall short of what's actually needed. Neil Leitch, CEO of the Early Years Alliance, put it clearly: whilst any funding increase is welcome, the rates announced don't adequately cover the cost of National Insurance and wage increases, leaving countless settings with no option but to raise costs or reduce places (Early Years Alliance, 2025).

The frustrating thing is that many settings are facing a daily battle to stay afloat and simply can't wait over a year for changes to kick in. They need help now.

The Wasted Capacity Problem

Here's something that's particularly frustrating. There's actually loads of capacity already in the system, it just can't be used because there aren't enough staff. NDNA research found that around 70% of nurseries aren't operating at full capacity, with an average of four vacancies each (National Day Nurseries Association, 2025).

Purnima Tanuku CBE, NDNA's Executive Chair, made a really good point: if thousands more school-based nurseries open without fixing the staffing crisis, qualified practitioners will simply move from existing settings to new ones. This damages the viability of already established provision without actually creating any new capacity (National Day Nurseries Association, 2025).

So really, we could unlock considerable additional capacity just by supporting existing settings with recruitment and preventing closures, rather than always building new provision.

Looking After Staff Wellbeing

Given everything that's happening, looking after staff wellbeing has become absolutely critical. Settings that are managing well have implemented specific measures like robust information-sharing strategies so knowledge doesn't walk out the door when staff leave, strong management oversight to support wellbeing, and clear processes for bringing temporary staff up to speed without burdening existing team members (Ofsted, 2024).

Professional development is also crucial for keeping people in the sector. The government's Best Start in Life strategy includes plans to work with the sector to create a new professional register for the early years workforce and provide better quality training routes (Department for Education, 2025). The challenge, of course, is that settings struggling financially find it really difficult to release staff for training or invest in their career progression.

Creative Solutions: Thinking Outside the Box

In this challenging environment, we need to get creative about supporting children's development and staff wellbeing. One innovative approach that's really gaining traction is bringing specialist services directly into settings.

Take BEAM ACADEMY (www.beam.academy), for example. They send qualified yoga teachers directly to nurseries to teach yoga to young children. Now, you might be thinking, "Yoga? For toddlers?" But hear me out, because this actually addresses several challenges at once.

First off, by bringing expert instructors into settings, nurseries can provide enriching physical and emotional development opportunities without having to train their existing staff or stretch their already thin resources. That's a big deal when you're struggling to fill basic positions.

The benefits for children are pretty impressive too. Research shows that yoga helps improve focus, memory, self-esteem, academic performance, and classroom behaviour. It can even reduce anxiety and stress in children (Arizona Early Childhood, 2024; Harvard Health, 2016). Yoga improves children's emotional regulation by helping them learn to be in the present moment whilst relaxing and gaining a peaceful state of mind (Eden Academy, 2025). This is particularly valuable during times of staff transitions and when settings are under stress.

The breathing exercises involved in yoga are brilliant tools for calming children down when they get upset. By strengthening the body's nervous system, practising yoga regularly can help with self-esteem and confidence (Cleveland Clinic, 2024; Famly, 2025). These are skills that will serve children well throughout their lives.

But here's something really interesting: it's not just good for the children. For early years staff themselves, exposure to yoga techniques through programmes like BEAM ACADEMY can provide valuable stress management tools. Yoga can bring calm to a very active mind, so it's a great stress reliever for both children and staff (Eden Academy, 2025). In settings where staff wellbeing is under strain, having external specialists deliver structured, therapeutic activities can reduce workload pressure whilst maintaining high-quality provision for children.

There's also a practical marketing angle here. Such programmes demonstrate to parents that settings are investing in comprehensive child development despite financial constraints. This can really support parental confidence and help with retention, which is important when you're trying to keep your numbers up.

And when you think about it, the outcomes yoga provides, improved emotional regulation, better awareness of thoughts, feelings and actions, improved behaviour, are particularly valuable right now. As settings navigate the challenges of potentially larger group sizes or less experienced staff ratios, having children who are calmer and more self-regulated makes everyone's life easier.

What Needs to Happen Next?

The early years sector needs urgent, comprehensive action to address these intersecting crises. Whilst government initiatives like financial incentives for teachers and increased hourly funding rates are steps in the right direction, they don't fully address the scale of the challenge.

A sustainable solution really needs several elements working together:

First, funding rates that genuinely cover the costs of delivery, including National Insurance increases and wage rises. Not funding that leaves settings making a loss on every place they offer.

Second, a long-term workforce strategy that addresses pay, career progression, and professional status. People need to see early years education as a viable, rewarding career, not just a stopgap.

Third, adequate support for staff wellbeing to prevent burnout. This could include access to services like yoga programmes, mental health support, and reasonable working conditions.

Finally, flexibility for settings to access specialist services and external support that enhance provision without increasing staff burden. Things like BEAM ACADEMY's model show how this can work in practice.

A Glimmer of Hope

The government's planned consultation on early years funding arrangements in 2026 offers a real opportunity to fundamentally rethink how the sector is supported. But as sector leaders have emphasised, many settings can't afford to wait over a year for changes to happen. Additional financial support during this interim period is absolutely vital to prevent further closures and to ensure that the childcare expansion policy actually achieves what it's meant to without undermining quality and sustainability.

The early years sector plays a foundational role in children's development and in supporting families to work. Fixing these workforce and funding challenges isn't just about ticking policy boxes, it's an investment in the future wellbeing and prosperity of our whole nation.

The good news is that creative approaches are emerging. Partnerships with specialist providers like BEAM ACADEMY show how settings can weather the current storm whilst maintaining, and even enhancing, the quality of what they offer. By working together, sharing innovative solutions, and pushing for the systemic changes that are needed, we can build a truly sustainable model for early years education.

It won't be easy, and it won't happen overnight. But for the sake of our children, our families, and our society, it's work that absolutely has to be done. And with a combination of adequate government support, sector resilience, and innovative thinking, there's real hope that we can come through this crisis stronger than before.

References

Department for Education. (2024). Early years places and workforce need. Available at: https://www.gov.uk/government/publications/early-years-places-and-workforce-need/early-years-places-and-workforce-need

Department for Education. (2025). Early years National Insurance contributions and teachers' pay grant (EY NTPG) for 2025 to 2026. Available at: https://www.gov.uk/government/publications/early-years-national-insurance-contributions-and-teachers-pay-grant-ey-ntpg-for-2025-to-2026

Department for Education. (2025). Early years funding rates 2026 to 2027: easy explainer. Available at: https://www.gov.uk/government/publications/early-years-funding-2026-to-2027/early-years-funding-rates-2026-to-2027-easy-explainer

Early Years Alliance. (2025). New research highlights the worsening workforce crisis in the early years sector. Available at: https://www.eyalliance.org.uk/news-events/news/new-research-highlights-worsening-workforce-crisis-early-years-sector/

Early Years Alliance. (2025). Government publishes new early years strategy. Available at: https://www.eyalliance.org.uk/news-events/news/government-publishes-new-early-years-strategy/

Early Years Alliance. (2026). Nursery crisis: National Insurance impact. [Current news reports]

National Day Nurseries Association. (2025). Early years workforce crisis demands urgent action before further childcare expansion. Available at: https://ndna.org.uk/early-years-workforce-crisis-demands-urgent-action-before-further-childcare-expansion/

National Foundation for Educational Research. (2025). The Early Years Workforce in England 2025. Available at: https://www.nfer.ac.uk/publications/the-early-years-workforce-in-england-2025/

Ofsted. (2024). Maintaining quality early years provision in the face of workforce challenges. Available at: https://earlyyears.blog.gov.uk/2024/05/13/maintaining-quality-early-years-provision-in-the-face-of-workforce-challenges/

Arizona Early Childhood. (2024). 7 Benefits of Yoga for Young Kids. Available at: https://azearlychildhood.org/resources/articles/7-benefits-of-yoga-for-young-kids/

Harvard Health. (2016). More than just a game: Yoga for school-age children. Available at: https://www.health.harvard.edu/blog/more-than-just-a-game-yoga-for-school-age-children-201601299055

Cleveland Clinic. (2024). Yoga for Kids: Benefits and Poses. Available at: https://health.clevelandclinic.org/yoga-for-kids

Eden Academy. (2025). 10 Amazing Benefits of Yoga in Early Childhood. Available at: https://edenacademy.com.au/10-amazing-benefits-of-yoga-in-early-childhood/

Famly. (2025). The benefits of yoga for preschoolers. Available at: https://www.famly.co/blog/sen-and-yoga-nurseries-yoga-for-kids