The CMA Review Is A Welcome Step. But Let's Be Honest About What The Sector Really Needs.

Secretary of State for Education and Minister for Women and Equalities The Rt Hon Bridget Phillipson MP. Image credit: GOV.UK

We sat down with Adam Sage, CEO, MiChild Group to hear his take on the Secretary of State for Education's letter to the CEO of the Competition and Markets Authority (CMA). As someone who has been in early years for over two decades, he shares his honest thoughts as a provider below.

I welcomed the news that the Secretary of State for Education, Bridget Phillipson has written to the Competition and Markets Authority (CMA) asking them to consider a review of the early years childcare market. Not because I think regulation solves everything, it doesn't, but because an honest, independent look at how this market actually works is long overdue.

I've been in early years for over two decades. Pauline Sage (COO, MiChild Group) and I lead MiChild, a fourteen-nursery group across Blackpool and the Fylde Coast, Greater Manchester and Cheshire. We took ownership in 2022 and we care, genuinely and deeply, about Early Years and giving children the best possible start in their young lives. So when I read the Secretary of State for Education letter to Sarah Cardell, I found myself nodding at some of it and wanting to add nuance to other parts. This is my attempt to do that, as a provider, not as a lobbyist.

On market practices and transparency

The letter raises concerns about private fees being charged on top of funded hours, about consumables charges, waiting list deposits and restrictions on how funded entitlement can be used. These are legitimate concerns. Families are often told their child has access to 'free hours' and then find the reality is more complicated than that. That's not good enough.

At MiChild, we believe transparency is non-negotiable. Families should know exactly what they're getting, what's included and what, if anything, isn't. But for transparency to mean anything, it has to apply consistently across all providers and be monitored as such. It can't be a standard that some providers hold themselves to while others don't. I won't pretend every provider in the sector operates transparently, clearly some don't, or the Secretary of State for Education wouldn't have written the letter. What the sector needs is far more consistency, the same rules, applied to everyone, and properly monitored. But the solution isn't to assume bad intent on the part of all providers. Many of the charges the letter refers to exist because the government funding rate, particularly for 3 & 4 years old children, genuinely doesn't cover the cost of delivery (and hasn’t done for many years), and in areas where the local authority funding rate is lower and annual increases fail to keep up with inflation. The cross-subsidy question, the idea that funded hours are effectively subsidised by revenue from parent-paid hours, is real. It's uncomfortable. And it needs to be part of this conversation, not just the symptom of it.

On supply and sustainability in harder to serve communities

This is the part of the letter I feel most strongly about. The Secretary of State for Education acknowledges cold spots, areas where childcare provision is thin or absent, and the particular challenges facing providers in less affluent communities. I live this every day.

We operate nurseries in deprived areas. The funded entitlement has expanded significantly, from September 2025, eligible working parents of children aged nine months and older can now access 30 hours per week, and over half a million children are now accessing government-funded places. That is genuinely good news for families. But here is where the equation of fees and costs simply doesn't work: in deprived areas, fees are lower, yet the staffing costs and the day-to-day challenges of running a nursery remain exactly the same. As things stand, there is little incentive for providers to operate in areas where the margins are too tight and where investment decisions are marginal at best. I am completely on board with the sentiment in the letter, but the real question is how the Government and providers can work together to make sure deprived areas don't miss out.

And this is where current Government policy seems to contradict itself. Increasing National Insurance contributions on employers pushes costs up at exactly the moment providers in these communities can least absorb them. A better approach might be to offer tax breaks in deprived areas, so that more can be channelled into funding rates and a genuine incentive exists for providers to keep serving the families who need them most.

I'm not calling for providers to be bailed out. I'm saying that any review of the market that doesn't grapple honestly with the economics of delivery in disadvantaged areas will produce recommendations that work for affluent suburbs and miss the mark everywhere else.

On workforce

The staffing crisis is the most pressing operational challenge in early years right now. Around one in five practitioners leave the sector entirely every year. That's an extraordinary level of turnover for a profession that plays such a formative role in children's lives. Expanding funded entitlement was always going to require more staff, estimates suggested around 40,000 additional people were needed to support the September 2025 expansion. The pipeline has not kept pace.

At MiChild, we've tried to do things differently. We pay for staff training and development through our MiLearning Lounge. We run apprenticeship programmes at Level 3 and Level 5. We've built a benefits package that treats our people like the professionals they are, an 80% childcare discount, paid compassionate leave, wellness days, an extra day of annual leave for every year of service, and fifteen categories at our annual staff awards that celebrate everything from the apprentice to the cook to the SENCO. We don't do this as a recruitment gimmick. We do it because we believe our work deserves to be valued, and because the quality of what we deliver depends entirely on the quality and consistency of our team.

Regulation won't fix the workforce crisis on its own. Investment in pay, in training, in professional status and in career pathways is what will. I'd like to see the CMA review acknowledge that workforce sustainability is a market issue, not just an operational one.

On outcomes for SEND children and disadvantaged families

The Secretary of State for Education is right to raise outcomes for children with SEND and from disadvantaged backgrounds. These children stand to gain most from high-quality early years provision, and they are also the most likely to fall through the gaps when provision is stretched, when specialist expertise is thin on the ground, or when settings struggle to maintain the staffing levels needed to meet complex needs.

Inclusion isn't a specialism at MiChild, it's a baseline expectation. We have a SENCO of the Year category in our own internal awards because we want our SENCOs to feel recognised and valued, not overlooked. But I'd be dishonest if I said the system makes inclusion easy. It doesn't. Funding for SEND support in early years is patchy and inconsistent, and many providers, especially smaller or independent ones, are doing this on goodwill and overstretched budgets.

What good reform actually looks like

A CMA review is valuable. But I'd ask it to be honest about the full picture, not just what providers are doing wrong, but what the structural conditions of the market make genuinely difficult. Transparency requirements, clearer rules on what can and cannot be charged, and better information for parents: all sensible. But pair those with a funding rate that reflects real costs, workforce investment at national scale, and a serious commitment to SEND support in the early years, and you'll actually move the needle. Above all, I'd want this to be about working together. Government, local authorities and providers collaborating, pulling in the same direction rather than against one another, because that is how real and lasting change happens.

This sector is full of incredibly talented, dedicated and passionate people who work in Early Years because they care about children and want to make a difference. Providers are trying to do something enormously important in conditions that are, too often, harder than they should be.

I hope the CMA review sees that. And I hope it leads somewhere good. And let's never forget who is at the heart of all of this: our children, and the future leaders they will one day become.

Adam Sage, CEO, MiChild Group

Sources: Secretary of State for Education letter to CMA CEO Sarah Cardell, 26 May 2026; Sara Bonetti Research (July 2025) 18–20% annual workforce attrition; Total People / PAC/DfE estimate of c.40,000 additional staff needed for September 2025 expansion;

30 hours funded childcare from September 2025; SoS letter, over 500,000 children accessing funded places.