Government asks competition watchdog to look at childcare charges

The Education Secretary, Bridget Phillipson, has asked the Competition and Markets Authority (CMA) to consider reviewing the early years childcare market in England.

The Department for Education (DfE) said her letter is part of new action to tackle hidden childcare fees.

It said too many parents report being asked to pay extra to secure a funded place, including upfront deposits, compulsory add-ons or additional hours.

According to the DfE, 72% of parents say they are using savings to cover extra charges. More than one in four (27%) say cost is the biggest barrier to childcare.

What the CMA has been asked to look at

In her letter, she said she would be particularly interested in the CMA's views on market practices including:

• private paid hours and fees
• restrictions on how government-funded hours can be used
• charges for consumables
• waiting list fees and deposits

She also asked about access to places in 'cold spot' areas, and how the market works for children with special educational needs and disabilities (SEND) or facing disadvantage.

The letter says it is for the CMA to decide the scope of any work. She said she would welcome a final report by spring 2027.

The DfE said the government has also asked the CMA to look further at the role of private equity and other ownership models in childcare.

A new tool for parents

The DfE also launched a free cost of living tool to help parents find childcare and budget for costs.

It includes a trial map of local childcare in Bristol, South Gloucestershire and Bath and North East Somerset. Families nationwide will be able to use it later this year.

What the rules already say

Statutory guidance for local authorities already says the funded hours must be free to parents. Charges for extras such as meals and nappies must be voluntary.