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School-Based Nursery Capital Grant (Phase 2): Your Key Questions Answered

Updated October 2025 to include Phase 2 of the School-Based Nursery Capital Grant (2025 to 2026) and the latest Ofsted early years guidance.

This guide brings together everything you need to know about Phase 2 of the School-Based Nursery Capital Grant in one clear place. It answers the questions you, as school leaders, are asking about funding, eligibility, design and Ofsted expectations, so you can plan your next steps with confidence.

After Phase 1, which saw more than 189 new school-based nurseries open in 2025, schools across England are now preparing for the next wave of funding.

At Fawns, we work with schools and nurseries every day to design EYFS play environments that inspire learning, independence and curiosity.

Jump ahead to:

Understanding the School-Based Nursery Capital Grant

Eligibility and application

Funding and project scope

Application process and requirements

Designing and developing your outdoor space

Compliance and Ofsted

Next steps and support for school leaders

Understanding the School-Based Nursery Capital Grant

What is the School-Based Nursery Capital Grant (Phase 2)?

The School-Based Nursery Capital Grant helps schools in England to create or expand nursery provision for children aged two to four. It focuses on improving physical spaces such as classrooms, nursery extensions and outdoor EYFS play areas.

Phase 2 continues the national programme launched in 2024 and supports schools that want to open or grow their nursery provision during the 2025–2026 academic year.

Why has the Department for Education launched this funding?

The Department for Education (DfE) introduced this funding to expand access to early years education and support the rollout of funded childcare entitlements.

By locating nurseries on school sites, one of the planned goals is to offer children an experience that provides a smoother transition into Reception. Whilst also targeting undersubscribed schools with vacant classrooms, in the most disadvantaged areas.

The aim is to help them meet local demand while giving more children access to high-quality early learning.

How does Phase 2 differ from Phase 1?

Phase 1 helped schools prepare for the first round of extended childcare entitlements in 2025. Phase 2 builds on that success by allowing more schools in areas of unmet demand to apply for support. The goal is the same: to increase the number of high-quality early years places available across England.

Eligibility and application

Who can apply for the School-Based Nursery Capital Grant Phase 2?

The grant is open to state-funded primary schools and maintained nursery schools in England. Each application must be submitted through the DfE’s online portal and approved by the school’s local authority.

Local authorities play a central role in confirming eligibility and ensuring that the proposed project fits local priorities and offers good value for money.

Are academies and free schools eligible to apply?

Yes. Academies and free schools can apply, provided they meet the criteria and work in partnership with their local authority. Every application must include a local authority approval form before submission to the DfE.

Funding and project scope

What can the School-Based Nursery Capital Grant be used for?

The grant can be used for physical works that create or expand nursery provision for two-, three- and four-year-olds.

It can fund:

• Converting unused classrooms or buildings into nursery spaces
• Extending existing buildings or constructing new nursery areas
• Developing outdoor EYFS play and learning environments

Outdoor areas are central to how young children learn. A well-designed EYFS playground helps children explore, develop balance and coordination, and build confidence across the seven areas of learning.

Our team at Fawns works closely with schools to create outdoor environments that meet EYFS standards and make the best use of available space. Designs can also support wraparound care, such as before and after-school clubs.

For ideas, explore nursery outdoor play equipment your EYFS children will love.

What can the grant not be used for?

The grant covers capital works only. It cannot be used for:

• Staff salaries or training
• Consumables or toys
• Ongoing running costs or maintenance
• Work completed before funding is awarded

Every project must show how it directly creates or expands nursery places. Fawns provides fully itemised quotations, helping local authorities assess bids efficiently.

When does Phase 2 open and close?

Applications open on 24 September 2025 and close at 5pm on 11 December 2025. Successful projects should complete construction and welcome children by September 2026.

Application process and requirements

How does the application process work?

Schools submit their applications through the Department for Education’s online portal. Each application must include a local authority approval form and landlord permission if required.

Local authorities review applications to confirm eligibility, value for money and project feasibility before submitting them to the Department for Education.

What information should schools include in their application?

A strong application includes:

• Evidence of demand for nursery places
• Site plans or feasibility studies
• Layouts showing how the space supports EYFS delivery
• A full cost breakdown for all proposed works

Providing clear, realistic information helps demonstrate that the project is achievable and represents good value for money.

What documents help strengthen a bid?

Including professional visuals and transparent costings shows strong preparation. Fawns supports schools by providing:

• Free on-site design consultations
• CAD designed playground layouts and detailed design drawings
• Clear costings that include delivery, installation and safety surfacing (if included in project)

Your application will be scored against four weighted criteria:

• How disadvantaged your area is (this holds 50% of the decision weight)
• The local need for additional childcare places (this holds 20% of the decision weight)
• The value for money your application shows (weighted at 20% of the decision)
• Ofsted key judgements (this will factor in 10% of the weighted decision)

Designing and developing your outdoor space

How can schools design an effective nursery environment?

Nursery spaces should feel safe, engaging and consistent with the EYFS framework.

Plans should include:

• Direct access between indoor and outdoor play
• Varied areas for quiet learning, creative play and active exploration
• Surfaces and structures that encourage physical development and safe risk taking

At Fawns, our playgrounds combine learning and imagination. We design EYFS spaces that meet curriculum goals and foster curiosity and independence.

What should be included in an outdoor play area?

Outdoor play is a vital component of EYFS learning. The best environments include opportunities for:

• Physical play that develops strength and coordination
• Creative and imaginative experiences
• Sensory exploration and connection with nature
• Social interaction and role play

Our EYFS playgrounds create open, flexible spaces that encourage movement, confidence and curiosity.

How do outdoor areas support EYFS learning goals?

Outdoor play directly supports EYFS outcomes in language, movement, problem solving and confidence. Equipment such as climbing frames, bridges and balance trails gives children opportunities to test ideas and work together, all whilst building their Fundamental Movement Skills.

Compliance and Ofsted

What compliance standards must school-based nurseries meet?

All school-based nurseries must meet the statutory requirements of the EYFS framework and comply with building, planning and safety regulations.

Designs should allow access to both indoor and outdoor learning, support all seven areas of development and promote inclusion for every child.

At Fawns, all playground equipment and surfacing meet BS EN 1176 and BS EN 1177 safety standards, ensuring that spaces are secure, inclusive and inspection ready.

How can schools ensure their outdoor space meets Ofsted expectations?

Ofsted expects outdoor play to be a planned, daily part of the curriculum. Inspectors focus on how outdoor learning promotes curiosity, independence, communication and physical development.

School-based nurseries are judged on how effectively their spaces support EYFS learning goals and how well staff use the environment to extend learning.

When schools work with Fawns, they gain a partner who understands how to align outdoor design with both EYFS and Ofsted expectations.

How can schools design sustainable and inclusive nursery spaces?

Sustainability and inclusion are at the heart of modern nursery design. Schools should consider:

• Using long-lasting, environmentally responsible materials
• Providing accessible layouts for children with additional needs
• Including natural features that encourage environmental awareness

Next steps and support for school leaders

What makes a strong School-Based Nursery Capital Grant bid?

A strong application shows clear need, well-developed plans and good value for money. The Department for Education prioritises bids that demonstrate readiness and deliver measurable impact on EYFS outcomes.

Detailed design work and transparent costings give local authorities confidence that your project can be delivered on time and within budget.

When should schools contact Fawns?

As soon as possible, before completing your application. Our design team can provide a site visit, 3D layouts and a fully costed proposal ready to support your School-Based Nursery Capital Grant submission. The visits and design (including itemised quote) can take up to 3 weeks, so moving quickly on booking in your free playground consultation is essential.

Where can schools get official guidance or help?

For official advice, visit the Department for Education’s Help Portal: https://customerhelpportal.education.gov.uk.

Fawns is not affiliated with the Department for Education or the School-Based Nursery Capital Grant programme. We support schools by designing outdoor spaces that are safe, creative and aligned with EYFS principles.

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