What the 2025 Budget Means for Schools: The 5 Big Funding Changes You Need to Know
The 2025 Budget contains several major school funding changes and commitments with direct implications for schools, trusts, and education organisations. Below, we break down the five most important school funding changes, including what each means for suppliers working with schools.
1. £8 Billion Investment in Early Years Provision
The first of the five key school funding changes to know about is the government’s commitment of £8bn in 2025–26 to expand early years support, particularly around funded hours for working parents. Demand for places is expected to increase sharply as eligibility widens.
What this means for education suppliers
- Huge capacity growth: Schools and early years providers will require new resources, training, technology, and staffing solutions.
- Marketing opportunity: Schools will be seeking providers who can help them meet higher demand, including nursery infrastructure, early-learning packages, safeguarding systems, and MIS integrations.
- Timing matters: Procurement interest will rise through 2025 as schools prepare for 2026–27 expansion.
2. £400 Million for School-Based Nursery Expansion announced as part of new school funding changes
A dedicated £400m pot will support the expansion or creation of school-based nurseries. The first funding round created over 5,000 places, mostly in the North and Midlands.
What this means for education suppliers
- Capital-funded projects: Schools will invest in building, refurbishing, and equipping nursery spaces.
- Growing early years ecosystem: Demand increases for early years curriculum resources, CPD, parent communication tools, and attendance/engagement systems.
- Opportunity for regional targeting: Funding is particularly concentrated outside the South; suppliers should adapt segmentation accordingly.
3. Free School Meals Expansion for All Universal Credit Families
From 2026–27, all pupils with a parent receiving Universal Credit will receive free school meals. Government estimates this will lift 100,000 children out of poverty.
What this means for education suppliers
- More pupil premium–linked demand: Schools will have larger groups of disadvantaged pupils, increasing the need for targeted interventions, tutoring, and wraparound support.
- Operational pressure: Schools will need help with digital ordering systems, catering workflows, scheduling, and pupil tracking tools.
- Messaging shift: Suppliers can show how their products support inclusion, equity, and cost-of-living resilience.
4. 2,000 More Schools in the National Breakfast Club Rollout
The Budget commits to adding 2,000 schools to the breakfast club programme in 2026–27, with funding for staffing and food.
What this means for education suppliers
- Attendance improvement focus: Breakfast clubs directly link to attendance gains, ideal for suppliers focused in this area.
- Need for monitoring tools: Schools will be seeking systems to track participation, attendance outcomes, pastoral data, and impact.
- New wellbeing angle: Supplier messaging can link to nutrition, readiness to learn, safeguarding, and behaviour.
5. SEND Funding Reform & DSG Statutory Override Extension
The government will extend the DSG Statutory Override to 2027–28 and promises a major SEND funding reform early next year. Crucially, LAs will not be expected to use general funds to cover future SEND pressures.
What this means for education suppliers
- Growth in SEND support purchasing: As funding stabilises, schools and LAs will have more capacity to buy SEND products, interventions, software, and staff training.
- Urgency around compliance: Schools must evidence provision and interventions, ideal for tracking, case-management and workflow platforms.
- Trust-level opportunity: SENDCOs will need scalable, simplified systems as reforms come online.
Now you know the 5 key school funding changes, can you support schools with your products and services?
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