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School-Based Nursery Capital Grant Phase 2 FAQs

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Robert Gould FRICS

Partner at Barker Associates | Award-Winning Integrated Property Consultants

The Department for Education (DfE) has announced Phase 2 of the School-Based Nursery (SBN) Capital Grant, following the success of Phase 1, which funded 300 nurseries. 

Phase 2 will provide £45 million for a further 300 nurseries to open from September 2026. With a strong emphasis on supporting disadvantaged families and areas of high need, the programme represents both an opportunity and a challenge for schools and trusts. 

At Barker, we supported our clients with their applications in Phase 1 and achieved an incredible success rate. 

We’ve set out answers to the most frequently asked questions to guide you through the process. 

What is the purpose of Phase 2 of the Grant?

Phase 2 aims to expand the number of school-based nurseries, helping disadvantaged families access early years provision and supporting the government’s wider childcare entitlement expansion. 

How much funding is available per school?

Eligible schools can apply for up to £150,000 of capital funding. Projects may combine this with other funding sources to increase value for money. 

Who can apply for the Nursery Capital Grant?

Eligible organisations are: State-funded primary schools with a reception class. Maintained nursery schools (expansion only). 

Not eligible are: Schools funded in Phase 1, special schools and Pupil Referral Units (PRUs). 

Voluntary Aided schools are eligible for up to 100% of costs. 

School-Based Nursery Capital Grant key dates

  • Applications open: 22nd September 2025 
  • Deadline: 5 pm, 11 December 2025 
  • Decisions announced: April 2026 
  • Funding released: June 2026 
  • Nurseries operational: September 2026 
  • Final spend deadline: September 2027

Who is eligible for the funding?

The template application form confirms that schools must demonstrate: 

  • No Phase 1 funding was received
  • The project will deliver a net increase in childcare places
  • The project can be delivered within ≤£150,000 DfE funding (alone or with other sources)
  • The nursery will be operational before September 2027
  • Location is either a primary-phase school with reception or a maintained nursery school
  • Written landowner consent secured
  • Formal Local Authority approval obtained, including signed approval form uploaded

Failure on any one of these criteria results in automatic disqualification

What has changed since Phase 1?

The surplus space requirement has been removed – new builds/extensions are now eligible.

Assessment is weighted towards disadvantage – 50% of the total scoring.

Mandatory Local Authority approval form – applications cannot be submitted without this.

Academies – must evidence consultation (minimum 3 weeks) for significant change.

Maintained schools – no longer need the statutory process for changing age range.

Educational approach and management – now assessed on a pass/fail basis rather than scored.

Brightly coloured nursey room filled with tables and toys

How will applications be assessed?

Scoring criteria for Phase 2: 

  • Disadvantage – 50% (FSM, IDACI) 
  • Local need – 20% (DfE childcare demand and Ofsted access data) 
  • Value for money – 20% (cost per place, extended hours, space efficiency) 
  • Ofsted judgements – 10% (Leadership, Early Years, Quality of Education) 

Applicants must also pass the assessment on: 

  • Project overview 
  • Local needs evidence 
  • Educational approach 
  • Management and sustainability 

What documentation is required?

Applications must include: 

  • Original and proposed floor/site plans
  • Cost breakdown (prepared by a QS or via tender)
  • Photographs of existing space
  • Local Authority approval form
  • Consultation summary (if academy significant change)
  • Supporting financial and governance evidence

What counts as value for money?

The DfE will assess: 

  • Cost per childcare place created
  • Space standards (m² per child)
  • Reasonable furniture, fixtures & equipment (FF&E) costs
  • Risk and abnormal cost provisions
  • Extended provision (holiday/longer hours)

What should schools and trusts do now?

1. Confirm eligibility against the template form
2. Engage Local Authorities early to secure approval forms
3. Begin academy consultations (where required) immediately
4. Prepare technical documentation – plans, cost breakdowns, risk assessments
5. Gather evidence of demand – parent surveys, waiting lists, sufficiency analyses
6. Test financial sustainability with governors or trust boards
7. Register interest if not ready to apply, to remain in scope for Phase 3

Barker’s Advice For The School-Based Nursery Grant

Phase 2 offers more flexibility than Phase 1 but is more competitive and tightly governed. Success will depend on early preparation, robust evidence of disadvantage and need, and comprehensive technical and financial planning. 

Barker can provide expert support across estate planning, bid development, cost assurance, and stakeholder engagement to maximise your chances of securing funding. 

Not sure if your school is eligible?

Speak to our education funding specialists for tailored advice on your project.

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