The Competition and Markets Authority (CMA) has launched a market
study into early years education and childcare services in
England to assess whether the sector is working well for
families, providers and the wider economy.
The review will consider early years education and childcare from
birth until children start school, including services provided by
nurseries, childminders and in school-based settings.
The study sits alongside the UK government's review of childcare
provision in England. In May 2026, the Education
Secretary asked the CMA to consider undertaking work in this
area, so that its independent assessment and recommendations
could inform that review. The CMA has factored this request into
its scoping but, for some areas, it has proposed broadening the
analysis to build a robust evidence base.
Early years education and childcare is a devolved policy area,
with variation in subsidies, regulatory frameworks and types of
providers across the UK. Reflecting the devolved nature of
education policy and the government's request, the market study
will focus on England, but the CMA will consider how findings
could be relevant to other parts of the UK.
The market study will explore:
- access to high-quality services - the availability of
childcare places, how well provision meets different needs and
any barriers to entry and expansion for businesses
- affordability and funding - how prices, affordability for
families and provider sustainability are shaped by underlying
cost drivers for providers and government funding
- information and choice - whether families can access and use
information to make effective decisions, and how market practices
affect their choices
- the role of local authorities, mayoral combined authorities
and other regulatory levers
- impact of provider types - how different provider models and
ownership structures affect choice and costs
The CMA's analysis will pay particular attention to the role of
government policy and public bodies. Where appropriate, it will
make recommendations that could drive improved outcomes.
There are over 53,000 childcare providers in England, delivering
childcare and early years education for children aged 0-4, with
an estimated 1.6 million places. The sector in England
is worth approximately £14 billion to the economy annually.
Expanded, government-funded support now plays a major role, with
around £8.91 billion of taxpayer funds spent in 2025-26.
Research points to wider shifts in the types of providers
operating in the sector. UCL
found places offered by private equity providers has doubled,
accounting for 8% of places in 2024, while there has been an 8%
decrease in places by not-for-profit providers and a 28%
reduction in places by partnership providers between 2018 and
2024. The Department
for Education also found there has been a 39% decline in
childminders between 2018 and 2025.
Sarah Cardell, Chief Executive of the CMA, said:
Early years education and childcare is a lifeline for many
families, helping children get the best start in life and
enabling parents to go out to work.
We know how important it is to find affordable providers close to
home that parents can trust. But too many families are struggling
to find the right place at an affordable price, with providers
also under real pressure.
We're going to take a close look at where change may be needed as
part of our commitment to support economic growth and household
prosperity, so the system works well for families and providers
alike.
Any outcomes from the market study will depend on evidence
gathered. They could include recommendations to government on
funding and regulation, improvements to the information available
to families and providers, as well as guidance for businesses or
consumers.
The CMA will apply its 4Ps' approach to conducting the study
(pace, predictability, proportionality and process) to ensure
streamlined processes and timely, effective outcomes.
It has launched a call for views and is inviting input from
families, education and childcare providers, and other groups to
help inform its work. Provisional findings are expected to be
published by early 2027.
Visit the CMA's website for more
information.
Notes to editors
- The review excludes nannies and other informal childcare for
which funded hours cannot be used. Additionally, the CMA will not
assess educational standards, which are for Ofsted.
- The Department for Education
estimates there are 53,600 childcare providers in England who
provide childcare and early years education for children aged
0-4, with 1.6 million childcare places. It also found the
number of childminders has fallen significantly, with an
estimated decrease from 36,500 to 22,300 (-39%) between 2018
and 2025.
- The estimated size of the sector is in the region of £14
billion this is calculated using early
years entitlement funding in 2025/26 (£8.9 billion) and
estimated
average provider income funded entitlements in
2024/25(63%).
