The future of English early years childcare: key issues for local authorities as the CMA confirms market study scope

Why did the CMA launch the study?

The CMA’s published materials identify early years childcare as a sector of substantial economic and social importance. It enables parents and carers to work, contributes to household prosperity and supports children’s development. It is also a sector under sustained operational pressure, with workforce costs, regulatory requirements, funding design, changing provider models and uneven local availability interacting in ways that make simple market analysis difficult.

The CMA’s starting intention was to examine whether the sector is working well for families, providers and the wider economy, sitting alongside the UK Government’s wider review of childcare provision in England.

What has happened so far?

The CMA invited submissions on its statement of scope. 41 submissions are published on the CMA’s market study page and include comments from a range of bodies, including providers, local authorities and representative organisations.

A call for views was also issued more widely, and the CMA received responses from:

• 878 families (largely from England but including 22 from across Northern Ireland, Scotland and Wales);
• 977 providers and professionals (382 childminders, 248 owners, and 156 nursery managers); and
• 40 other interested people (including organisations with an interest in the education and childcare sector and other members of the public).

The CMA also sought information from a range of providers, held stakeholder meetings and commissioned research.

What will the CMA look at?

The CMA’s scope was confirmed and remains deliberately broad and interconnected. It is examining early years education and childcare services in England for pre-school children from birth until they start school, including nurseries, childminders, pre-schools and school-based provision.

Five themes are central to the CMA’s analysis:

• access to high-quality childcare services, including local “cold spots” and whether provision meets different family needs;
• affordability and funding, including the relationship between government-funded entitlements, provider sustainability and parent-paid charges;
• information and consumer choice, including whether parents can understand what provision is available, what it will cost and how quality can be assessed;
• the role of public bodies, including local authorities, mayoral combined authorities and regulators; and
• cost drivers and the impact of different provider types and ownership models, including childminders, independent providers, larger nursery groups, non-profit models, school-based provision and private equity-backed operators.

Why is it important for local government?

The study is particularly important for local authorities because the CMA has expressly included the role of public bodies within its scope. Local authorities do not simply observe the childcare market: they shape it through sufficiency duties, information provision, funding administration, engagement with providers and, in some cases, direct or school-linked provision.

That places local authorities in a complex position. They are expected to understand and influence local childcare markets, but they do not control many of the commercial, workforce and funding factors that determine whether provision is available, affordable or sustainable. The study therefore creates both an evidential opportunity and a governance risk: an opportunity to ensure that the CMA understands the operational reality of childcare sufficiency and market engagement, and a risk that future recommendations may increase expectations around data, transparency, parental information, collaboration duties, and market oversight without fully addressing the statutory, financial and practical constraints within which authorities operate.

The CMA’s update acknowledges a wide range of the issues facing local authorities and confirms that these will be explored within the five key themes of the market study. Particular issues relating to local authorities include how funding, regulation and local authority administration operate together; capacity and resourcing difficulties; challenges with funding level, structure and implementation of guidance; and provision barriers including for those in rural areas, disadvantaged communities and for children with special educational needs and disabilities (“SEND”).

What could the CMA recommend?

A market study is diagnostic. It allows the CMA to build an evidence base, identify concerns and recommend changes, but it does not automatically impose binding remedies in the same way as some other competition tools. The CMA’s possible outcomes therefore need to be understood as part of a wider regulatory toolkit: market-wide findings, recommendations to central government, recommendations to local authorities or other public bodies, consumer information or transparency measures, and potential further CMA work if the evidence indicates that more targeted intervention is needed.

For public bodies, the most relevant areas of recommendation are likely to cover the design and communication of funded entitlements, the quality and consistency of information available to families, approaches to identifying and responding to local sufficiency gaps, and the interface between national policy, local implementation and provider sustainability.

How can local authorities and providers get involved?

Following on from its initial call for views, the CMA has plans to continue with structured engagement. Local authorities and providers will be involved through meetings with public bodies (as well as a range of other stakeholders), and several stakeholder roundtables in October and November 2026. An independent research agency commissioned by the CMA will also be conducting qualitative interview-based research with participants in the sector across a number of local areas, which will be developed into a published final research report.

Consultation on the CMA’s emerging thinking and potential remedies will be invited from interested stakeholders between December to April 2027.

Interested local authorities, providers, parents and other organisations with direct experience of early years provision or local childcare markets can sign up to the market study mailing list for updates and find more information on the market study website.

When engaging in consultation, submissions are likely to be most effective where they are evidence-based, practical and clear about the distinction between matters within local authority control and those driven by national funding, workforce or provider-market dynamics. Brodies can assist your organisation with preparing any consultation response if needed.

Looking ahead

The CMA’s final report is expected in May 2027. However, the study should therefore be viewed as a live policy and regulatory process. For local government clients in particular, the most valuable opportunity for engagement is likely to begin early: ensuring the CMA has a grounded understanding of local childcare markets before emerging conclusions are formed.

How Brodies can help

Brodies’ advises public bodies, education-sector organisations and providers on statutory duties, governance, consultation, regulatory decision-making, service delivery risk and engagement with regulators. We can help your organisation with questions of childcare sufficiency, evidence-gathering, funding implementation, public law risk and regulatory engagement.

We can assist with assessing the implications of the CMA market study, preparing evidence-based responses, identifying legal and governance risks, and considering how any recommendations may affect future service planning, commissioning and engagement with providers. If you would like to discuss the CMA’s early years childcare market study, or the implications for local authority childcare functions, please get in touch with your usual Brodies contact, or Jenna Wong or Mhairi Mackenzie Everitt in our early years practice.