Bridget Phillipson to ask competition watchdog to review hidden childcare costs

Key Points:

• Education Secretary Bridget Phillipson will ask the Competition and Markets Authority (CMA) to investigate hidden costs parents face when using government-funded childcare in England, such as non-refundable deposits and charges for meals and consumables.
• Ministers are concerned that these additional costs create barriers for working parents eligible for 30 hours of funded childcare for children aged nine months to four years, potentially undermining the government’s childcare offer.
• Critics highlight that nurseries are underfunded, leading to extra charges as a "cross subsidy," and call for the CMA to examine whether the childcare sector is adequately funded rather than just focusing on consumer costs.
• The CMA has welcomed the request and is preparing a proposal for a review of the early years childcare sector to ensure it works effectively for families.
• Over 1.7 million parents in England use government-funded childcare, with the average weekly cost for full-time nursery care for children under two falling by 39% to just under £149 in 2026, though costs remain higher in Scotland and Wales.