The Competition and Markets Authority (CMA) has launched a comprehensive market study into early years education and childcare services across England, aiming to determine if the sector is effectively serving families, providers, and the wider economy. This independent assessment, requested by the Education Secretary in May 2026, will feed into the UK government's ongoing review of childcare provision. The CMA's investigation will span services for children from birth until they begin school, encompassing nurseries, childminders, and school-based settings.
The study will delve into several critical areas, including the availability of high-quality childcare places, how well provision meets diverse needs, and any barriers hindering businesses from entering or expanding in the sector. A significant focus will be on affordability and funding, examining how prices, family affordability, and provider sustainability are influenced by underlying costs and government funding. The CMA will also scrutinise whether families can access clear information to make informed decisions and how market practices affect their choices, alongside the roles of local authorities and regulatory frameworks.
The childcare sector in England is a substantial part of the economy, valued at approximately £14 billion annually, providing an estimated 1.6 million places across over 53,000 providers for children aged 0-4. Government-funded support plays a crucial role, with around £8.91 billion of taxpayer funds allocated in the 2025-26 financial year. However, recent research highlights significant shifts within the sector; UCL found that places offered by private equity providers doubled to 8% in 2024, while not-for-profit providers saw an 8% decrease and partnership providers a 28% reduction between 2018 and 2024. Furthermore, the Department for Education reported a 39% decline in childminders between 2018 and 2025, raising concerns about the diversity and availability of care options.
Sarah Cardell, Chief Executive of the CMA, emphasised the importance of the study, stating that early years education and childcare is vital for many families, supporting children's development and enabling parents to work. She acknowledged the struggles many families face in finding affordable and trusted providers, while also recognising the pressures on providers themselves. The CMA's analysis will pay particular attention to the impact of government policy and public bodies, with potential outcomes including recommendations on funding and regulation, improvements to information for families and providers, and guidance for businesses.
For UK households, the current landscape often means significant financial strain. Childcare costs are a major expenditure, frequently rivalling mortgage or rent payments for many families. While government support schemes exist, such as Universal Credit and the Warm Home Discount, these often do not fully alleviate the burden of childcare. Families are encouraged to explore options like the government's tax-free childcare scheme or 30 hours free childcare for eligible working parents. Resources from organisations like Citizens Advice and MoneySavingExpert can offer guidance on managing these costs and identifying available support. The outcome of this CMA study could lead to policy changes that directly impact the affordability and availability of childcare, potentially offering much-needed relief to struggling families.