Phillipson to ask watchdog to probe hidden childcare costs

Bridget Phillipson was due to ask the Competition and Markets Authority to examine the extra charges that still cling to government-funded childcare, from meals and snacks to nappies, trips and other consumables. The move came as ministers insisted England’s expanded offer was cutting costs sharply, even as parents continued to face bills that sit outside the headline promise of free hours.

The Department for Education said government-funded childcare had cut childcare costs for families in half, with working parents saving an average of £8,000 a year. In the same release, the department said the cost of a full-time 50-hour nursery place for a child under two had fallen 52% compared with 2024, from around £305 a week to £149. It said the September 2025 expansion had reached more than half a million families, and that a part-time place for a child under two was now theoretically free.

Yet the fine print still mattered. Government guidance said funded hours do not cover meals, snacks, nappies, trips or other consumables, and providers can lawfully charge for those items if the charges are voluntary and properly itemised. The Department for Education updated early-years charging guidance in February 2025, with changes taking effect on 1 April 2025, and updated its statutory guidance for local authorities again on 1 April 2026. That left families weighing not just hours funded by the state, but the real-world extras that can decide whether a place is genuinely affordable.

The affordability question is especially sharp in parts of the country where childcare remains thin on the ground. Government analysis published in June 2025 said London was the only English region to see an increase in childcare accessibility between March 2020 and March 2024, while disadvantaged areas had lower accessibility and rural areas had a disproportionately high prevalence of childcare deserts. The Local Government Association said in 2023 that councils, providers and parents still needed more holistic reform, including stronger workforce support, enough places and better provision for children with special educational needs and disabilities. Phillipson’s move put those pressures back under a national spotlight, and tested whether a review of hidden charges can make childcare cheaper in practice, not just in the headline numbers.