The government is to consult on changes to how early years funding is allocated and distributed, as part of its new early years strategy.

In Giving Every Child the Best Start in Life, the government says it will consult the sector on changes to the way funding is allocated and distributed, including a review of national funding formulae, by summer 2026. The aim of the changes is to match funding to need, and to promote workforce stability and quality provision.

The strategy also sets out plans to:

• Incentivise early years teachers in disadvantaged areas with a pay-out of £4,500

• Work with the sector to explore ways in which single settings could work together to share expertise and pool back-office functions and overheads

• Encourage local authorities and Mayoral Strategic Authorities  to “actively shape their local childcare markets” and to give them “new powers” to ensure there are enough places

• Monitor the financial stability of the childcare market and potentially take steps to increase transparency of the largest providers. The strategy says large providers backed by private equity are less likely to operate in deprived areas, and could drive rises and disruption to services

• Fund Ofsted to increase the frequency and improve the quality of inspections, and deliver an effective approach to the inspection of nursery groups, where issues might arise across several settings

• Offer tailored support after an inspection from Stronger Practice Hubs, with one-to-one coaching or expert guidance from an experienced early years professional to address the issues identified

• Consult with the sector on the training routes, course content and professional status for early years teachers, including on the settings they can teach in, to move towards greater parity with other teachers

• Work in partnership with the sector to create a new professional register designed to raise the value of the profession and promote continuing professional development

• Fund new partnerships between schools and local nurseries to strengthen transitions into school

• Look for opportunities to partner with social investors, to bring additional funding and access to capital to the sector, working with partners including philanthropic investors, charities and social enterprises”

The government said it would appoint a Best Start in Life Champion to “bring early years expertise into the heart of government” and drive the strategy forward.

Early years minister Stephen Morgan visited London Early Years Foundation’s Brixton Garden Nursery to mark the launch of the strategy. He said: “I spoke to some of the children and workforce who make the early years such a brilliant place to work. It was also excellent to hear about the work that the London Early Years Foundation does as a social enterprise – we want to see more examples like this across the country and we set out plans for this in our strategy.”

June O’Sullivan, chief executive of London Early Years Foundation (LEYF) said: “We welcome this funding to attract new early years teachers, particularly in disadvantaged communities where high-quality staff are most needed.”

She added: “I’m especially pleased to see social investment being considered as part of the strategy. At LEYF, we know the power of prioritising social impact over profit. With the right support, social enterprises can grow high-quality, accessible childcare in the communities that need it most – making good on the government’s ambition to level the playing field for every child.”