Education Secretary Requests CMA Investigation into Undisclosed Childcare Fees

Education Secretary Bridget Phillipson is set to instruct the Competition and Markets Authority (CMA) to scrutinize the hidden expenses parents might incur when utilizing state-funded childcare. While eligible working parents in England with children between nine months and four years old are entitled to 30 hours of government-funded care per week, ministers have raised concerns that families are still burdened with additional fees to secure a spot.

These extra charges can include non-refundable deposits. In certain instances, nurseries require parents to cover supplementary costs for essentials such as nappies, snacks, meals, and suncream. Officials worry these requirements could deter financially strained parents from accessing necessary care. Consequently, they plan to ask the CMA—whose mandate includes fostering competition and safeguarding consumers—to conduct an inquiry, a move first highlighted by the Financial Times.

Ministers fear that the availability of funded childcare is being compromised by these practices. Rick Kelsey, a personal finance journalist, shared his experience on BBC Radio 4’s Today programme. He described feeling "excited" last September when the government-funded childcare grants began, only to face an additional charge of £16 daily for consumables like food and sunscreen.

"I don’t know about you but I’d love to see a toddler eat £16 worth of chicken nuggets and Babybel in a day," Kelsey remarked. He criticized the situation as a "game of smoke and mirrors," noting that many parents remain uncertain about their final monthly bills. However, Kelsey also acknowledged that while the extra costs are "unrealistic," nurseries are themselves "being stretched for funding."

Neil Leitch, chief executive of the Early Years Alliance, an industry membership body, argued that these additional fees act as a "cross subsidy" due to years of "gross underfunding" within the sector. He questioned the focus of the investigation, asking, "If you're going to ask the CMA to look at anything why don’t you ask them to look at if the sector is adequately funded?"

Leitch further criticized the government’s fiscal approach, stating, "If this was about integrity why has the government increased National Insurance contributions and did not fund that into the rate they pay providers? Any economist would tell you there is something fundamentally flawed," adding that the government is aware the sector is "short changed in all of this."

In response, a CMA spokesperson said: "We welcome the request from the education secretary to carry out a review into the early years childcare sector. The CMA has been monitoring developments and exploring the merits of work in this area. This is an important sector that needs to work well for families, and we will be developing a specific proposal to put to our board."

The current system evolved from the Conservative government’s initial introduction of 30 hours of free childcare for working parents of three- and four-year-olds, which was later expanded to younger children. The present Labour government has extended this provision to eligible parents for children from nine months old up to school age. According to Department for Education figures, over 1.7 million parents in England are now utilizing these government-funded hours.

Data from Coram and Family Childcare indicates that the average weekly cost for full-time nursery care (50 hours) for a child under two, including funded hours, is just under £149 in 2026. This represents a 39% decrease from the previous year, based on the charity’s latest annual survey covering England, Scotland, and Wales. For comparison, the average cost for 50 hours of care for a child under two stands at £259.10 in Scotland and £325.12 in Wales.

Following poor election results in local elections across England this month, the government is eager to show it is taking concrete action to alleviate the cost of living crisis. Households are currently facing rising fuel prices and preparing for higher energy and food bills, exacerbated by supply chain disruptions caused by the war in Iran.

Source: BBC News Generated at: 2026-05-25 21:47:18 UTC