Education Secretary Bridget Phillipson is poised to ask the Competition and Markets Authority (CMA) to investigate the hidden costs that parents may encounter when using government-funded childcare - because apparently nothing says 'free' like a surprise charge for suncream.
The previous Conservative government introduced 30 hours of state-funded childcare for most working parents of three- and four-year-olds in England for 38 weeks a year, later extending eligibility to parents of children as young as nine months old. But ministers have noticed that families are still facing costs to secure places, through demands for non-refundable deposits and additional fees for meals, snacks, nappies, and suncream.
Ministers are concerned this undermines the offer of funded childcare for many working parents, and will ask the CMA - which is tasked with promoting competition and protecting consumers - to investigate, the Financial Times first reported.
Personal finance journalist Rick Kelsey told BBC Radio 4's Today Programme that he, like many parents, had been 'excited' last September for the start of government-funded childcare grants, only to be left with additional charges of £16 a day for consumables including food and sunscreen. 'I don't know about you but I'd love to see a toddler eat £16 worth of chicken nuggets and Babybel in a day,' he said. There is a 'game of smoke and mirrors that's being played at the moment', he added, noting that many 'parents don't know what their bill will be at the end of the month'.
Neil Leitch, chief executive of the Early Years Alliance, told Today the extra costs were a 'cross subsidy' as the sector had been 'grossly underfunded' for years. 'If you're going to ask the CMA to look at anything why don't you ask them to look at if the sector is adequately funded,' he said. 'If this was about integrity why has the government increased National Insurance contributions and did not fund that into the rate they pay providers? Any economist would tell you there's something fundamentally flawed.'
More than 1.7 million parents in England now use government-funded childcare hours, according to Department for Education (DfE) figures. The average cost of full-time nursery - 50 hours a week - for a child under two in England including the funded hours is just under £149 per week in 2026, according to Coram and Family Childcare - a 39% drop from last year. For comparison, the average cost for 50 hours a week for a child under two was £259.10 in Scotland and £325.12 in Wales.
After dismal results in local elections in England this month, the government is keen to demonstrate that it is taking practical steps to tackle the cost of living. Among a flurry of policy announcements, Chancellor Rachel Reeves announced on Thursday that ticket prices for families at various attractions such as theme parks, zoos, and museums would be cheaper during the summer holidays through a cut to VAT, along with free bus journeys for under-16s in England in August and cuts to import taxes on some basic foods under a 'Great British Summer Savings' campaign. Because nothing says 'we hear you' like a cheaper trip to the zoo while your childcare bill remains a mystery.