- Education Secretary tells regulator to examine
deposits, restrictions and hidden extra charges in
government funded childcare
- New cost of living tool launched to help families find
nurseries, budget and get government support they're entitled to
- Builds on major childcare support package, saving families up
to £8,000 a year
Government is standing up for parents facing eye-watering
childcare costs including non-refundable deposits and basics like
nappies and suncream.
The Education Secretary has written to the independent
Competition and Markets Authority (CMA) as part of new government
action to tackle hidden childcare fees hitting families.
While funded hours are meant to be free, too many parents report
being asked to pay extra to secure a place including upfront
deposits, compulsory add-ons, or additional hours to
access their entitlement.
These practices undermine the value of 30 hours of free childcare
and add to the pressure on working families. Nearly
three quarters (72%) of parents say they are using savings
to cover extra charges, while more than one in four (27%) say
cost remains the biggest barrier to accessing the
childcare they need.
A new free cost of living tool will also help parents make the
most of the childcare offer, from finding local provision to
planning and getting exactly what they are entitled to.
Government support is already massively reducing costs, with
eligible families saving an average of £8,000 a year per child
and more than 500,000 families now benefiting from
funded hours.
Education Secretary said:
"I grew up in a family that knew what it meant to count every
penny. I am so proud of the crucial difference that 30 hours
funded childcare makes to family finances, saving £8,000 a year
per child on average.
“The vast majority of nurseries and childminders have been
brilliant in helping us deliver, but I will not accept the small
minority letting families down and stopping them get what they
were promised.”
The government has also asked the CMA to do more to investigate
the role private equity and other ownership models are playing in
the childcare market, including whether they are working in the
interests of families or driving up costs and creating risks for
those who depend on their local nursery.
The new cost of living tool also includes a trial of a
new map of local childcare. Launching first in Bristol,
South Gloucestershire and Bath and North
East Somerset, the map will help families find funded
childcare near them while promoting local nurseries and
childminders to more parents. Families nationwide will be able to
use it later this year.
This work sits alongside a wider government drive to make life
simpler and more affordable for families. The newly launched
GOV.UK Chat – a new AI tool that allows parents to ask questions
in plain English and get instant answers about what support they
could have – means help is now available at any time of
day.
ENDS
Notes to
Editors
- Any findings from a market review could support action taken
through the government's wider Childcare Review, which is
currently examining how to make the childcare system simpler and
fairer for families and providers alike, and making sure the
significant investment across government in childcare is working
as hard as possible for families.
- The Education Secretary's letter to the CMA will
be published Tuesday 26 May 9am . The
full request covers three key
areas:
o The impact of market practices on parents and
providers, including private paid hours and fees, restrictions on
the use of government-funded hours, consumables charges and
waiting list deposits and fees.
o Supply side dynamics, including accessibility
in cold spot areas, cross-subsidy dynamics and the role
these play in provider sustainability and growth, and the role
of different types of provision in the
market.
o How the demand side is able to drive positive
outcomes in the market, including for children with a range of
characteristics such as age, SEND and disadvantage, the role of
local authorities and mayoral combined authorities in market
management, and the transparency of information available to
parents to inform their choices.
- The CMA is an independent non-ministerial government
department whose role is to promote competition and protect
consumers with a clear end goal – economic growth and household
prosperity. Building on the CMA's work to date, and informed by
recent engagement with officials, the CMA is developing a
proposal to put to its Board in June.
- The free online tool is available via the
Best Start in Life website. The eligibility checker and cost
estimator are launching nationally in May. The local childcare
finder is launching in pilot in Bristol,
South Gloucestershire and Bath and North
East Somerset, with national rollout to follow later this
year.
- Ipsos Parent Poll Wave 15 fieldwork was conducted between 2
May and 10 June 2025, prior to the full rollout of the 30 hours
funded childcare entitlement in September 2025
- Following DfE's request the CMA are developing a specific
proposal to put to its Board in June
