Phase 3: School-Based Nursery Capital Grant (2027 – 2030)

The Department for Education has published its guidance for the next stage of the School-based Nursery (SBN) Capital Grant programme, covering the period 2027 to 2030. This third phase gives emphasis, on moving from individual school bids to strategic, multi-year proposals led by local authorities.

Munday & Cramer has supported a number of successful SBN projects through phases 1 and 2 with a 100% success rate in the last round. With phase 3 on the horizon, now is the ideal time for schools and local authorities to start planning how they will position themselves for this next opportunity.

What is Phase 3 of the SBN Capital Grant?

Phase 3 of the School-based Nursery Capital Grant will run from 2027 to 2030. During this phase, local authorities will be invited to submit multi-year funding proposals outlining how they will create or expand school-based nursery places across their area.

Proposals can cover:

• State-funded primary schools
• Maintained nursery schools
• Best Start for Life Family Hubs (BSFHs)

The overall aim remains consistent with earlier phases: to increase high‑quality early years places, especially in areas where provision is currently limited or where disadvantaged families face barriers to accessing childcare.

Key Features of the 2027–2030 Programme

• Local authority‑led proposals: Unlike earlier rounds where individual schools applied directly, local authorities will coordinate bids across multiple schools and settings, focusing on local need and strategic fit.
• Multi‑year funding: Proposals will span several years, enabling more coherent planning, phasing of works and better alignment with wider early years and education strategies.
• Focus on need and value for money: Projects must demonstrate a clear need for additional places, particularly for disadvantaged communities, and show that the proposals offer strong value for money.
• Building on previous SBN participation: Where a school has already received SBN capital funding, any new phase 3 proposal must deliver additional places beyond what has already been created under phases 1 and 2.

The DfE has also signposted that updated “Establishing School-Based Nursery Provision” guidance, as well as detailed funding terms and conditions, will be issued during spring 2026.

Key Dates

The published information sets out a timetable for local authorities preparing for phase 3:

• March 2026: DfE webinars for local authorities to introduce phase 3 and answer initial questions.
• Spring 2026:
  • Publication of phase 3 funding terms and conditions.
  • Updated guidance on establishing SBN provision.
  • Information on how local authorities will submit proposals.
• 16 September 2026: Deadline for clarification questions (10 working days before proposal submission).

Funding decisions for phase 3 will be made following assessment of local authority proposals, with further engagement from DfE where needed to refine bids and ensure that needs are appropriately met

Opportunities for Schools and Local Authorities

For local authorities, phase 3 represents a chance to take a strategic, area‑wide view of early years provision and to address gaps that may not have been captured through school‑level bidding in earlier rounds. For schools and maintained nursery schools, the shift to local authority‑led proposals means it is essential to engage early with your local authority to ensure your ambitions are reflected in their plans.

Some key opportunities include:

• Expanding existing nursery provision to meet growing demand.
• Creating new nursery spaces within primary schools where surplus space is available.
• Supporting Best Start for Life Family Hubs to provide integrated early years services.
• Targeting areas with limited current provision or high levels of disadvantage.

It is not the intention of the programme to displace like‑for‑like existing provision, so proposals must carefully consider the local childcare market and demonstrate how new places complement, rather than undermine, current services.

How Munday & Cramer Can Help

Munday & Cramer has been closely involved in the School‑based Nursery Capital Grant programme since Phase 1, supporting schools in earlier phases to develop robust applications, feasibility studies and business cases. Our experience includes:

• Identifying and assessing surplus or under‑used school space suitable for conversion to nursery provision.
• Preparing feasibility studies, cost plans and options appraisals to support funding applications.
• Developing well‑evidenced business cases that demonstrate need, demand and value for money.
• Supporting design, planning and delivery once funding is secured.

As we await the outcome of phase 2 bids in April 2026, we are already working with schools and local authorities to prepare for the next stage. For phase 3, we are here to support local authorities to shape proposals and help individual schools position their projects so they align with local priorities.

Next Steps

Munday & Cramer are here to support you through every step of this process, from the initial planning discussions through to delivery on site.

If you would like to discuss how phase 3 of the School-based Nursery Capital Grant could support your early years strategy, please get in touch with our estates team on 01245 326200 or complete the contact form on our website to arrange an initial consultation.