Create school-based nurseries: note

Central fiscal result

+£0.7bn - Net fiscal impact in 2028-29

Low case: +£0.3bn. High case: +£2.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Models create school-based nurseries by 2028-29.
• Baseline is current policy or published departmental plans.
• Central case uses published party or official anchors where available.
• Wider manifesto interactions are excluded unless stated.

Affected population

• Affected units are people, firms, households or providers depending on policy.
• Direct exposure follows the manifesto or government target group.
• Indirect exposure includes suppliers, workers, consumers and taxpayers.
• Weakest counts are widened in the low and high cases.

Gross impact

• Published anchor or scenario central is +£0.7bn in 2028-29.
• Gross costs or receipts are adjusted for behaviour and delivery risk.
• Tax, benefit or procurement offsets are separated in the fiscal build-up.
• The range is deliberately wider where implementation detail is thin.

Fiscal build-up, central case

• Gross programme or delivery cost: +£0.8bn
• Tax and receipt offsets: -£0.1bn
• Administration and evaluation: +£0.1bn
• Behavioural and pass-through effects: -£0.1bn

Central net impact: +£0.7bn in 2028-29.

Behaviour and pass-through

• Low case assumes stronger delivery or receipts than central.
• Central case applies moderate behavioural leakage and pass-through.
• High case allows weaker delivery, larger take-up or higher costs.
• Output effects follow incidence, capacity and investment channels.
• Distributional gains do not automatically imply GDP gains.

Phasing

• 2026-27: +£0.1bn. Phased implementation and take-up.
• 2027-28: +£0.4bn. Phased implementation and take-up.
• 2028-29: +£0.7bn. Phased implementation and take-up.
• 2029-30: +£0.7bn. Phased implementation and take-up.

Main source groups

• HM Treasury, "Budget 2025" (2025): Budget 2025 sets out implemented welfare, energy, motoring and tax-threshold measures; used for current government delivery policies.
• Heckman, "Skill Formation and the Economics of Investing in Children" (Science, 2006): Early childhood investments can have high returns when targeted well and delivered effectively; relevant to nurseries and early years.
• HM Government, "Plan for Change" (2024): The plan sets measurable targets on homes, health, police, school readiness and clean power; used for current government delivery targets.
• Psacharopoulos and Patrinos, "Returns to Investment in Education" (Education Economics, 2018): Education has positive private and social returns, though quality and targeting matter; supports education spending with delivery caveats.
• Labour Party, "Change: Labour Party Manifesto 2024" (2024): The manifesto sets the policy pledge, funding claim or target being modelled; used as the policy definition and manifesto baseline.