Over the late May bank holiday weekend, the Government again turned to the CMA to examine a sector linked to cost‑of‑living pressures. This time it is childcare following an request from the Department for Education, following earlier referrals on dentistry and heating oil where the Treasury had put pen to paper.

The CMA seems likely to begin work in summer 2026, with a report due by Spring 2027. This points to a relatively fast-moving review.

What the Government wants the CMA to look at

The Education Secretary has asked the CMA to consider “how the childcare market as a whole is working” with particular interest in three areas:

1. Market practices

“the impact of market practices… private paid hours/fees… restrictions on the use of government-funded hours; consumables practice; and waiting list fees/deposits”

This signals potential scrutiny of how “free hours” operate in practice and the additional charges parents face.

2. Supply-side dynamics

“accessibility in cold spot areas; cross-subsidy dynamics… ensuring provider sustainability and growth… the role of different types of provision”

Expect a close look at capacity constraints and how providers balance income streams.

3. Demand and outcomes

“how the demand side is able to drive positive outcomes… including… SEND and disadvantage… transparency and the information parents have”

This introduces a broader focus on outcomes, fairness, and transparency, as well as the role of local authorities.

What this might mean in practice

Competition and consumer protection themes are likely to be considered in this review. For providers and investors, key areas of focus may include:

• Pricing structures and add-on fees
• Use of deposits and restrictions on funded hours
• Cross-subsidy models
• Availability in underserved areas

Once launched, the CMA is likely to move quickly with information requests and stakeholder engagement. Although work has not yet formally started, the direction is clear. This is shaping up to be a wide-ranging and high-profile review of the childcare sector. Those who are ready to engage early – and with evidence – will be best placed to shape the outcome.