CMA to investigate hidden nursery fees as Education Secretary targets funding gap
Survey data reveals nearly three-quarters of parents in formal childcare are paying for essentials, prompting government intervention and a new digital provider map.
Nurseries across England are imposing additional charges for essentials such as food, nappies, and sun cream to offset a shortfall in government funding for free childcare hours. Education Secretary Bridget Phillipson has directed the Competition and Markets Authority (CMA) to investigate these hidden costs, which campaigners argue are eroding the value of state-subsidised early years education.
Eligible working parents in England are entitled to 30 hours of free weekly childcare for children aged between nine months and four years. However, the Department for Education has acknowledged that too many families are being asked to pay more to secure a funded place. These extra costs include waiting-list deposits, compulsory add-ons, and fees for additional hours, creating significant barriers for working parents.
Neil Leitch, chief executive of the Early Years Alliance, described the additional fees as a cross-subsidy passed on to parents to cover provider losses. He cited reports of some families paying up to £16 a day on top of standard rates, a figure that can amount to thousands of pounds annually for full-time care. Leitch clarified that this sum does not represent the cost of a single meal but rather illustrates the scale of the financial pressure providers face and the extent to which it is being transferred to households.
Data from a survey conducted in May and June last year found that nearly three-quarters of parents with children in formal childcare reported paying for extras. An Ipsos poll of 2,000 parents further suggested that more than a quarter identified childcare costs as the primary barrier to accessing their preferred care option. Phillipson stated in a written statement that while the majority of nurseries are performing well, the government must address stories of families hit by hidden charges that bear no relation to the intended investment.
In response to the growing concern, the CMA confirmed it is developing a specific proposal for board review following the Education Secretary’s request. Concurrently, the government has launched a digital map of providers in Bristol, south Gloucestershire, Bath, and north-east Somerset. This tool, available via the Best Start in Life website, is scheduled for a countrywide rollout later this year to help families navigate the childcare landscape.