Education secretary Bridget Phillipson has asked the Competition and Markets Authority (CMA) to review hidden childcare charges, including non-refundable deposits and compulsory add-ons, amid concerns that parents are facing extra costs despite the government's expansion of funded childcare hours.
Ministers said many parents are still being asked to pay upfront deposits, additional hours, and charges for basics such as nappies, meals, and sun cream. The review aims to assess whether the private childcare sector is working well for consumers.
The intervention comes as the government seeks to ease pressure on household budgets. Chancellor Rachel Reeves recently announced a 'Great British summer savings' scheme worth £300m, including free bus travel for children in August and VAT cuts on tickets for theme parks, zoos, and museums.
However, thinktanks such as the Resolution Foundation suggested that richer households would benefit more from the government's interventions than poorer ones. The government said eligible families are saving an average of £8,000 per child per year through funded hours, with over 500,000 families benefiting.
The CMA, which has wide powers to impose changes on the sector, will also examine the role of ownership models, including private equity, and whether they are contributing to rising costs. The review follows similar investigations into the vets and private dentistry sectors.
