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The UK competition watchdog has announced it is widening a planned review into England’s £14bn childcare industry to look at whether families are given fair choices in a sector increasingly dominated by private equity.
The UK Competition and Markets Authority said on Wednesday that its investigation will go beyond a government request in May to look at hidden fees in childcare offerings, and it will now also review how different providers affect options and cost as well as the availability of childcare places.
While there are more than 53,000 childcare providers for children aged between 0 and 4 in England, the type of provider has changed significantly in recent years.
Childcare places offered by private equity-backed nurseries have doubled, while the number of childminders has fallen by nearly 40 per cent, according to research from UCL and the government.
Childcare fees are among the greatest burdens for families. The UK government expanded funding for childcare last year for working parents earning less than £100,000. The shift has cost taxpayers about £9bn and saved eligible households an average of £8,000 a year per child, according to the government.
“Early years education and childcare is a lifeline for many families, helping children get the best start in life and enabling parents to go out to work,” said Sarah Cardell, chief executive of the CMA.
She added: “We’re going to take a close look at where change may be needed as part of our commitment to support economic growth and household prosperity, so the system works well for families and providers alike.”
The CMA said outcomes from the review could include recommendations for government on regulation and funding. The agency will also look at the role of local authorities as part of its study, and “pay particular attention” to the role government policy and public bodies play.
The education secretary Bridget Phillipson asked the antitrust agency in May to look into non-refundable deposits, hidden charges and other costs that can unexpectedly hit parents with children at nurseries.
Early years education and childcare is devolved across nations in the UK. However, the CMA said that while its study would focus on England it would look at how its findings could be applied more broadly across Britain.
