Expansion of England’s 30‑hour free childcare may push up nursery fees, report finds

A University of Bath Institute for Policy Research report published in late August warns that the expansion of free childcare in England to provide 30 hours a week for children from nine months old could exacerbate already high nursery fees.

The entitlement, which took effect in September 2025, increases funded hours for younger children but comes at a time when many providers face staffing shortages and funding rates that fall short of running costs, the report says.

Researchers found that funding for three- and four-year-olds is set below the average hourly fee charged by nurseries, a gap that has contributed to higher fees for younger children whose places are not fully covered by government support. The study states the average cost of full-time nursery care (50 hours a week) for a child under two in England was £12,425 in 2025. London remained the most expensive region, followed by the South East and South West, while the North East reported the lowest fees.

The report links the policy expansion to several operational pressures. Increased demand for subsidised hours could stretch existing places, and without additional funding or staff, some providers may limit the number of funded places they offer or shift costs onto parents through higher top-up charges for non‑funded hours. The researchers warn that such dynamics risk leaving some families unable to secure local childcare or paying rates above the national average.

Staff recruitment and retention emerge as significant constraints in the study. Nurseries and childminders have reported difficulties filling qualified roles, and the report says that reliance on under‑staffed cohorts can force settings to restrict capacity even where physical space exists. Those workforce pressures, combined with funding that does not match the cost of delivering care, are cited as factors that could push market prices higher.

The expansion is part of government efforts to support parental employment and early years development by extending entitlements to younger children. The University of Bath report does not dispute the policy objective but highlights a mismatch between the ambition to widen access and the resources available to the sector. It concludes that, without adjustments to funding levels or measures to boost workforce capacity, the net effect could include higher overall costs for families and uneven access to places across regions.

Regional variation in fees underlines the potential unevenness of the impact. Settings in London and the South have higher operating costs and therefore larger gaps between funding and fees, the report notes, increasing the likelihood that families in those areas will face additional charges or limited availability.

The report’s findings come as operators, parents and local authorities assess how the expanded entitlement will affect local childcare markets over the coming months. It recommends that policymakers consider whether current funding rates and workforce measures are sufficient to deliver the intended benefits without increasing financial pressure on families or destabilising local provision.