CMA opens probe into childcare sector

CMA opens probe into childcare sector
Review will consider the challenges families face finding suitable childcare as well as pressures on providers in England.
The Competition and Markets Authority (CMA) has launched a market study into early years education and childcare services in England to assess whether the sector is working well for families, providers and the wider economy.
The review will consider early years education and childcare from birth until children start school, including services provided by nurseries, childminders and in school-based settings.
The study sits alongside the UK government’s review of childcare provision in England. In May 2026, the Education Secretary asked the CMA to consider undertaking work in this area, so that its independent assessment and recommendations could inform that review. The CMA has factored this request into its scoping but, for some areas, it has proposed broadening the analysis to build a robust evidence base.
Early years education and childcare is a devolved policy area, with variation in subsidies, regulatory frameworks and types of providers across the UK. Reflecting the devolved nature of education policy and the government’s request, the market study will focus on England, but the CMA will consider how findings could be relevant to other parts of the UK.
The market study will explore:
- access to high-quality services - the availability of childcare places, how well provision meets different needs and any barriers to entry and expansion for businesses
- affordability and funding - how prices, affordability for families and provider sustainability are shaped by underlying cost drivers for providers and government funding
- information and choice - whether families can access and use information to make effective decisions, and how market practices affect their choices
- the role of local authorities, mayoral combined authorities and other regulatory levers
- impact of provider types - how different provider models and ownership structures affect choice and costs
The CMA’s analysis will pay particular attention to the role of government policy and public bodies. Where appropriate, it will make recommendations that could drive improved outcomes.
There are over 53,000 childcare providers in England, delivering childcare and early years education for children aged 0-4, with an estimated 1.6 million places. The sector in England is worth approximately £14 billion to the economy annually. Expanded, government-funded support now plays a major role, with around £8.91 billion of taxpayer funds spent in 2025-26.
Research points to wider shifts in the types of providers operating in the sector. UCL found places offered by private equity providers has doubled, accounting for 8% of places in 2024, while there has been an 8% decrease in places by not-for-profit providers and a 28% reduction in places by partnership providers between 2018 and 2024. The Department for Education also found there has been a 39% decline in childminders between 2018 and 2025.
Sarah Cardell, Chief Executive of the CMA, said:
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.
We know how important it is to find affordable providers close to home that parents can trust. But too many families are struggling to find the right place at an affordable price, with providers also under real pressure.
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.
Any outcomes from the market study will depend on evidence gathered. They could include recommendations to government on funding and regulation, improvements to the information available to families and providers, as well as guidance for businesses or consumers.
The CMA will apply its ‘4Ps’ approach to conducting the study (pace, predictability, proportionality and process) to ensure streamlined processes and timely, effective outcomes.
It has launched a call for views and is inviting input from families, education and childcare providers, and other groups to help inform its work. Provisional findings are expected to be published by early 2027.
Visit the CMA’s website for more information.
Notes to editors
- The review excludes nannies and other informal childcare for which funded hours cannot be used. Additionally, the CMA will not assess educational standards, which are for Ofsted.
- The Department for Education estimates there are 53,600 childcare providers in England who provide childcare and early years education for children aged 0-4, with 1.6 million childcare places. It also found the number of childminders has fallen significantly, with an estimated decrease from 36,500 to 22,300 (-39%) between 2018 and 2025.
- The estimated size of the sector is in the region of £14 billion – this is calculated using early years entitlement funding in 2025/26 (£8.9 billion) and estimated average provider income funded entitlements in 2024/25 (63%).
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