Education Secretary to Commission Review of Hidden Childcare Charges

Education Secretary Bridget Phillipson is set to instruct the Competition and Markets Authority (CMA) to investigate the concealed fees that parents may incur when accessing state-subsidized childcare. In England, working parents with children aged nine months to four years are eligible for 30 hours of government-funded childcare per week. However, ministers fear that the promise of free care is being eroded by ancillary charges, such as non-refundable deposits required to secure a spot.

There are also concerns that providers are imposing extra fees for essentials like meals, snacks, nappies, and sunscreen. Officials worry these additional costs could deter financially strained families from utilizing the support they are entitled to. Consequently, the government is urging the CMA, whose mandate includes safeguarding consumers and fostering market competition, to probe these practices, a move first highlighted by the Financial Times.

Personal finance reporter Rick Kelsey shared his experience on BBC Radio 4’s Today programme, noting that while he was initially enthusiastic about the introduction of childcare grants last September, he was subsequently hit with £16 daily charges for consumables. "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 described the situation as a "game of smoke and mirrors," noting that many parents remain uncertain about their final monthly bills. Nevertheless, Kelsey acknowledged that nurseries are also under financial pressure, stating that while the extra costs feel "unrealistic," the sector is "being stretched for funding."

Neil Leitch, chief executive of the Early Years Alliance, a representative body for childcare providers, defended the extra charges as a necessary "cross subsidy" resulting from years of severe underfunding. He challenged the government’s approach, 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 argued that the situation is economically unsound, pointing out that the government raised National Insurance contributions without increasing the funding rates paid to providers. "The government knows we're short changed in all of this," he asserted.

In response to the Education Secretary’s request, a CMA spokesperson stated: "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 expansion of childcare support began under the previous Conservative government, which introduced 30 hours of free weekly care for three- and four-year-olds for 38 weeks a year, later extending the provision to younger children. The current Labour administration has further broadened eligibility, offering free care to eligible working parents for children from nine months old up to school age. According to Department for Education statistics, over 1.7 million parents in England are currently 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 in England, including funded hours, is projected to be just under £149 in 2026. This represents a 39% decrease from the previous year, based on the charity’s annual survey covering England, Scotland, and Wales. For comparison, the average weekly cost for 50 hours of care for a child under two stands at £259.10 in Scotland and £325.12 in Wales.

The government’s push to address these issues follows poor election results in local polls earlier this month. With households facing rising fuel costs and anticipating higher energy and food bills due to supply chain disruptions caused by the war in Iran, ministers are eager to show tangible action on the cost-of-living crisis.

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