In this article we explain why we cap or limit the number of fully funded places in each age group, and why, along with what options you might have to both benefit from funding and opt in to pay for the additional services that provide admission
From September 2025, we will be capping the number of fully funded 15- and 30-hour places at 20% of the total available places for 2-3 year olds and 3-5 year olds across each of our settings. This decision has not been taken lightly, and we would like to take this opportunity to explain the rationale behind this policy shift.
As a provider committed to high-quality early years education and care, we continue to experience significant financial pressure due to:
- Rising staffing costs, following the April 2025 uplift to the National Minimum and Living Wage and continued increases in employer national insurance contributions;
- Persistent underfunding from local authorities, whose rates for delivering funded places fall significantly below the true cost of provision;
- Restrictions on our ability to recoup the shortfall, given statutory limitations that prevent us from charging parents top-up fees unless they opt into additional services and enrichment activities.
While we remain fully supportive of the government’s ambition to make childcare more accessible, the current funding model places unsustainable strain on providers like us — particularly as we strive to uphold staffing ratios, invest in educator development, and maintain the quality environments your children deserve.
To preserve the financial viability of our schools and ensure we can continue delivering the outstanding care and education you expect, we must therefore limit the proportion of fully funded-only spaces we offer. We will continue to support families who wish to access their government entitlement through a combination of:
- Funded places with optional extras, which support the additional enrichment activities, meals, and extended care that families value - the amazing excursions; modern language programme; enrichment activities; international festivals and additional STEAM enrichment work will now be paid for additionals for those who want the full programme at Hatching Dragons. If you are able to pay for these additional activities, it would greatly help us safeguard the provision of funded places in full. See here for more information and note the asterisked prices in our fee cards for Westminster, City and Canada Water, to understand what those charges might mean for you
- Workplace Nursery Schemes, which allow childcare fees to be paid via salary sacrifice to increase parental take-home pay;
- And continued guidance on accessing Tax-Free Childcare and other government support mechanisms.
We understand that this change may impact some families, and we are here to work with you to find a suitable arrangement wherever possible. Should you have any questions, or wish to explore alternative funding or placement options, please don’t hesitate to contact your nursery manager or our central admissions team.