Last reviewed 30 July 2020

The Competition and Markets Authority (CMA) has published an open letter to the early years sector following an investigation into complaints of “unfair practices” by some providers.

It has also published advice which sets out the CMA’s view on how consumer law applies to the agreements between early years providers and consumers (parents) affected by the Covid-19 pandemic.

The CMA states that whilst it recognises most nurseries are trying to do the right thing under unprecedented circumstances and pressures during the pandemic, at the same time consumers deserve to have their rights protected.

Most of the complaints it had received involved payments during periods of closure as a result of lockdown restrictions. It identified three key areas of concern:

  • providers requiring full or "excessively large" fees for services not being carried out due to the pandemic

  • providers relying on unfair cancellation terms, such as requiring unreasonable notice or high cancellation fees

  • providers putting pressure on parents by threatening that the child's place may be lost or that the provider will go out of business.

The CMA is therefore asking early years providers to consider their contracts and arrangements with consumers and take any necessary steps to ensure they comply with the law. It will not be taking any enforcement action against the early years sector at this stage but it will continue to monitor the sector.

Purnima Tanuku, Chief Executive of the National Day Nurseries Association (NDNA), said:

“We are pleased to have had the opportunity to work with the CMA to support them to understand the issues faced by the early years and childcare sector ahead of issuing advice and guidance to providers. The CMA has taken time to listen and understand the immense pressure providers were and still are under and recognised this in the context of consumer law.”

“These have been very challenging times for parents and providers. We welcome the fact that the CMA has decided to issue advice to the sector on staying within the regulations and understanding their obligations so that parents and providers get the best results, rather than take enforcement action.”