The Department for Education (DfE) has released guidance for Phase 3 of the School-Based Nursery (SBN) Capital Grant, 2027 to 2030. This phase continues to support the national aim of increasing high quality early years places, particularly in areas with limited provision or high levels of disadvantage.
Programme overview
Phase 3 is local authority–led, with councils invited to submit multi year, strategic proposals to the Department for Education (DfE) to include multiple schools. Funding is intended to support the creation or expansion of early years places on school sites, in areas where a clear sufficiency need has been identified.
Eligible sites include:
- State funded primary schools
- Maintained Nursery Schools
- Best Start for Life Family Hubs (BSFHs)
- Provision delivered directly by the school or by a PVI provider (including childminders) operating on the school site
Special Schools, Alternative Provision (AP), and Pupil Referral Units (PRUs) are not eligible.
Projects must:
- deliver a net increase in early years places
- offer strong value for money, especially in areas of disadvantage
- be operational by September 2030
There is no fixed cap per project, though most schemes are expected to cost under £1 million.
Key features of the 2027–2030 programme
Local authority coordination: Councils will lead the development and submission of proposals, ensuring alignment with local sufficiency needs and wider early years strategies, including ensuring efficiency of places for children with SEND.
Multi year planning: Funding can support phased or complex projects over several years, but all places must be available by September 2030.
Focus on need and value for money: Proposals must demonstrate clear evidence of local demand and deliver new cost effective Early Years places.
Schools previously funded under Phases 1 or 2 who wish to apply for further funding to expand, must show that
Phase 3 proposals create additional places beyond earlier expansions.
DfE assessment criteria
Proposals will be ranked primarily on:
- Deprivation indicators (FSM and IDACI)
- Value for money (cost per place)
Local authorities must submit proposals to the DfE by 5:00pm on 30 September 2026.
Opportunities for schools and providers
Phase 3 offers opportunities to:
Expand existing nursery provision to meet rising demand
Create new nursery spaces where schools have suitable accommodation
Support integrated early years services through Best Start Family Hubs (BSFHs)
Target areas with limited provision or high disadvantage
Develop partnerships with PVI providers to operate provision on school sites
Proposals must not displace existing like for like provision. They should complement the local childcare market and strengthen overall sufficiency.
Our approach
We have supported schools through Phases 1 and 2 of the SBN programme:
- Phase 1: 2 successful school applications
- Phase 2: 11 successful school applications
For Phase 3, we will:
- conduct supply and demand mapping to identify priority areas with clear sufficiency need
- identify schools within areas where potential new or expanded nursery provision would be feasible and meet need
- reconsider schools that previously applied, or expressed interest in phase 3
- consider any school applications outside of priority areas which may meet the council’s eligibility criteria
How schools can apply or express interest
- Identified schools in priority areas will be contacted directly to discuss the possibility of an application
- Previous applications and expressions of interest from schools will be contacted to discuss the possibility of an application
- Any school wishing to be considered, and not contacted directly by the Local Authority, may express an interest by emailing EYexpansion@northyorks.gov.uk
We will work with all interested schools to:
- assess sufficiency need including provision for children aged 0-3 years, children from disadvantaged families and children with SEND
- explore feasibility and site suitability
- support development of proposals for inclusion in the local authority’s submission