Education Secretary Orders Competition Watchdog Probe into Hidden Childcare Charges
Education Secretary Bridget Phillipson is set to request that the Competition and Markets Authority (CMA) examine hidden costs potentially levied against parents utilising government-funded childcare. This move follows ministerial apprehension that families are still encountering charges, such as non-refundable deposits, to secure nursery places, despite eligibility for 30 hours of funded childcare weekly for children aged nine months to four years.
Reports indicate that parents frequently face additional costs for essentials including meals, snacks, nappies, and sun cream, effectively undermining the intended benefit of the funded childcare programme. Personal finance journalist Rick Kelsey highlighted this issue, recounting daily charges of £16 for consumables despite the government grant. He described a “game of smoke and mirrors” where parents are often unaware of their final monthly bill.
Neil Leitch, Chief Executive of the Early Years Alliance, contended that these extra costs function as a “cross subsidy” for a sector that has been “grossly underfunded for years”. He questioned why the CMA's focus was not on the adequacy of sector funding, particularly given the government’s increase in National Insurance contributions without commensurate funding for providers.
A CMA spokesperson confirmed receipt of the request and stated the authority would develop a proposal for its board, acknowledging the importance of the early years childcare sector for families. Department for Education figures show over 1.7 million parents in England currently use government-funded childcare hours.
This intervention comes as the government faces pressure to address cost of living concerns. Households are contending with rising fuel prices and anticipated increases in energy and food bills, exacerbated by geopolitical instability. Chancellor Rachel Reeves recently announced measures such as VAT cuts on family attraction tickets and free bus journeys for under-16s in August, alongside reductions in import taxes on certain foods, as part of a “Great British Summer Savings” initiative.
