School Based Nursery Capital Grant – Phase 2

Last year, the Department for Education (DfE) announced the roll out of the School Based Nursery Capital Grant – a funding opportunity for primary schools in England to apply for up to £150,000 to develop and increase their on-site nursery provision. Due to the success of this, the DfE has now announced phase 2 – this blog will help break down the key points, from what happened with phase 1 to who can apply for phase 2. Read more about Phase 1 of the School Based Nursery Capital Grant here.

Bishop's Tachbrook Pre-School is a school-based nursery that we worked with to transform their outdoor space - read about this project here.

The Impact of Phase 1

Phase 1 of the School Based Nursery Capital Grant (for academic year 2024 to 2025) showed that with well-designed capital investment, school sites can play a big role in expanding nursery provisions within the local community where it is needed. Examples of this are:

• 300 school received the funding to create up to 6000 new nursery places, mostly in the North and in The Midlands.

• Total successful funding bids totalled approximately £37 million, with many bids being between £100,000 and £150,000.

• Of the successful bids, around 40% was to create brand new nursery facilities, with the other 60% used to expand existing provision.

Phase 2: Who Can Apply and What For

 State-funded primary-phase schools and, now, maintained nursery schools, are eligible to apply for this funding. This is as long as they meet certain criteria, including:

• Having endorsement from the local authority through an approval form

• Obtaining approval from the landlord or freehold landowner for the changes.

• Ensuring the proposal aligns with Department for Education assessment criteria (these include demonstrating evidence of demand, viability, value for money, sustainability, benefits to disadvantaged children, etc.).

  
  

It is important to note that any institutions that had a successful bid in phase 1 cannot apply for phase 2.

The School Based Nursery Capital Grant is strictly for capital expenditure – this is for one-off investments or upgrades that delivery long-term infrastructure benefit rather than ongoing running costs, for the academic year 2026-2027.

 This includes:

• Converting existing space within the school’s footprint into nursery classrooms.

• Upgrading services in the building, e.g. heating, lighting and plumbing.

• Installing or upgrading windows, doors and accessibility within the building that is directly connected to the nursery facility.

• Developing outside space for children top use for outdoor learning and play.

All applications, including all supporting documents, must be submitted via the online portal by 5pm on Thursday 11^th December.

Conclusion

Phase 2 of the School-based Nursery Capital Grant offers a significant opportunity for primary schools and maintained nursery schools in England to expand early years capacity and better serve local communities. With up to £150,000 available per project, and a strong emphasis on supporting disadvantaged families, the programme builds on the success of Phase 1. If your school is eligible and ready, make sure to gather all necessary approvals and supporting evidence ahead of the 11th December 2025 deadline.

If you have already been successful in Phase 1, or just want our advice on how to develop your nursery playground, please get in touch!

Useful links:

Government Guidance: Establishing school-based nursery provision

Government Guidance: School-based Nursery Capital Grant 2025 to 2026