Competition and Markets Authority issues open letter to sector

The Competition and Markets Authority (CMA) has issued guidance within an open letter to the early years sector so providers understand their obligations under consumer law towards parents.

This includes charging cancellation fees, retainers and fees during lockdown when nurseries were unable to offer provision to all children.

The CMA has decided not to take any enforcement action but will continue to monitor the sector. 

The letter also says they are unlikely to object to voluntary arrangements made between parents and providers which were fairly agreed, so long as parents were not pressured into agreeing or risk losing their child’s place or that otherwise the provider would go out of business.

Purnima Tanuku, Chief Executive of 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.

“During lockdown, settings were forced to close to all but vulnerable children and those of key workers and had severe limits on their income. We supported members with approaches to parents about voluntary contributions. We know that the vast majority of our members have not charged parents during lockdown or have asked for small contributions.

“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.

“We are now working to produce further advice for our members as well as parents and will be issuing this as soon as it is ready for publication.”

Read the open letter in full here  and more detailed advice here.