CMA to examine early years education and childcare services

Formally announcing the market study, the CMA said it will assess a range of issues affecting access to early years education and childcare services in England, including affordability, funding arrangements, information available to parents, the role of public bodies, and the impact of different ownership and provider models. 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.  It comes at a time when childcare policy is under increasing scrutiny, with the CMA’s work to sit alongside the UK government’s separate review of childcare provision in England.

According to the CMA, there are over 53,000 providers of childcare and early years education for children aged 0-4 in England, which provide an estimated 1.6 million places. While the sector is worth approximately £14 billion annually, “expanded, government-funded support now plays a major role, with around £8.91 billion of taxpayer funds spent in 2025-26”, according to the CMA.

Giles Warrington, competition law expert at Pinsent Masons, said: “The CMA is not simply looking at how providers compete with one another, but at how funding, regulation, local availability, information for families and provider sustainability interact in practice.”

“The CMA has increasingly used its wide statutory powers to examine sectors that have a direct impact on household budgets and consumer welfare. In recent years it has scrutinised various consumer-facing markets; this latest market study appears to continue that trend,” he said.

In its statement of scope for the new market study, the CMA highlighted the importance of accessible and affordable childcare for household prosperity and economic growth, noting that childcare decisions frequently arise at moments of financial pressure and vulnerability for families.

Angelique Bret, competition law and consumer protection expert at Pinsent Masons, said: “One area likely to attract particular attention is how families access information and make decisions when choosing childcare services. The CMA has made clear that it wants to understand whether families can make effective choices and whether there are practical improvements that could help markets work better for parents, providers and children alike.”

The competition authority also emphasised the importance of early years and childcare services in enabling labour market participation and supporting children’s development.

Tadeusz Gielas, competition law expert at Pinsent Masons, said: “The new wide-ranging market study sets the stage for a detailed examination of a sector that plays a critical role in both family finances and the wider economy”.

“Affordable, accessible and high-quality early years education and childcare is not only important for families’ finances, but also for workforce participate and productivity. By helping parents return to work or increase their working hours, effective childcare provision can support investment, economic activity and long-term growth across the economy.”

The CMA has stressed that the review is evidence-led and that it has not reached any conclusions about how the sector is functioning. It has invited general stakeholder views on the market study statement of scope and, to help it gather information relevant to the market study, the authority has also launched targeted calls for views aimed at families, childcare professionals and providers, and other interested stakeholders. Responses to all CMA calls for stakeholder feedback are due by 26 July.

The authority intends to conduct evidence gathering and analysis through the remainer of the year, before consulting on its emerging findings and any potential remedies. The CMA’s provisional findings are expected early next year, followed by a final report. The CMA has one year – until the end of June 2027 – to complete the market study, but expects to publish its final report in May 2027.

As early years education and childcare is a devolved policy area, subsidy arrangements, regulatory frameworks and provider types vary across the UK. Consistent with the devolved structure of education policy and the government's request, the market study will concentrate on England, although the CMA will also assess the relevance of its findings to other parts of the UK.

The CMA said it “will apply its ‘4Ps’ approach to conducting the study (pace, predictability, proportionality and process) to ensure streamlined processes and timely, effective outcomes”.

Warrington said: “Possible CMA market study outcomes could include recommendations to government on funding arrangements and regulatory frameworks, improvements to the information available to families and providers, business and consumer guidance, and other measures aimed at improving how the sector operates.”

Bret said: “As with the CMA’s recent work in sectors such as road fuel, housebuilding, infant formula, veterinary services, and heating oil, the newly launched childcare market study demonstrates the CMA’s continued willingness to deploy its market inquiries toolkit in areas where competition, consumer outcomes, public policy and economic growth objectives intersect.”