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Early Years Voice urges competition watchdog to look at funding rates within its review of childcare costs

Posted 5/6/2026

Parents hear a lot about “funded childcare” but many are left wondering why nursery bills still feel so high.

One view being raised more loudly across the early years sector is that the problem isn’t nurseries charging too much, it’s that government funding isn’t keeping up with the real cost of delivering childcare.

Groups representing providers argue that private nurseries are carrying a huge part of the childcare system. They’re often the settings offering year-round care, longer opening hours, holiday cover and places for babies and toddlers — the age groups that need more staff and cost more to provide.

 

At the same time, providers say funding rates for some places don’t fully reflect those day-to-day costs. That leaves nurseries trying to balance rising wages, utilities, food costs and staffing while continuing to offer flexible childcare that families rely on.

 

For parents, that can create a confusing picture. If childcare is funded, why are there still extra charges or fewer available places? The argument from many in the sector is that those costs aren’t appearing because nurseries want to charge more, they’re appearing because providers are trying to bridge the gap between funding and the actual cost of care.

 

Whichever side of the debate people sit on, one thing feels clear: parents deserve transparency and nurseries need a system that makes high-quality childcare sustainable.

Read the full article here: nurseryworld and Early Years Voice

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