NEWS

burden of paying major costs upfront.

The report also found that the system creates ‘cliff-edges’ that penalise high earning parents for increasing their hours, while flat levels of support fail to target lower-income families.

New modelling from the EECC and LSE tested four alternatives to the current funding system that could make support for working parents simpler and more effective, including combining Universal Credit, tax-free childcare and the early entitlement into a single subsidy scheme.

According to the research, such an approach would:

▪ significantly improve work incentives, particularly for working families with around average earnings

▪ substantially increase average disposable income for just over a quarter (26%) of working families, compared to a much smaller proportion (7%) who would receive substantially less support

▪ increase the average childcare support for the lowest income working families from 5.0% of family income to 7.4% and to as much as 13.6% if the simpler and more accessible scheme improved take-up of the support

Alliance CEO Neil Leitch said: “We at the Alliance believe that early education should be accessible to all, but as this research shows, those set to gain the most from provision continue to lose out.

“After all, while early years provision should not be seen solely as a tool to support parents to work but as vital education, it’s clear that the existing system is not working for both providers and families. It is absolutely right, therefore, to explore how the system can be made fairer.

“And while, as EECC has said, this modelling is a starting point, we hope it encourages much-needed conversation on how childcare subsidies – as well as the system overall – can be reformed both to ensure every child can access a place and providers are supported to sustainably deliver them.

“So, as the CMA’s review into the sector continues, we hope it prompts government to make meaningful changes to ensure that the early years supports every child to have the best possible start in life.”

The Competition and Markets Authority (CMA) has confirmed key areas it will focus on as it continues its review of England’s early years sector.

In an update published in late September, it confirmed that the five core themes of the review will be: access to high-quality services; affordability and funding; information and consumer choice; the role of public bodies and cost drivers and the impact of different provider types.

Within this, the CMA said it would focus on whether parents can access suitable provision; whether government funding, self-pay hours and other charges align with provider costs; if information on early years provision is clear, reliable and comparable; and how local authorities assess sufficiency of provision.

The update comes after months of engagement activity and a call for views on a proposed statement of scope from early years providers, local authorities, families and organisations associated with the early years sector.

Alongside the confirmation of the review’s topics, the CMA also provided an update on the evidence it had collated so far, highlighting that providers had raised “issues around the level and structure of funding, workforce pressures and administrative requirements”.

The CMA formally launched the market study on 1 July 2026 and plans to publish its final report in May 2027.

out of 10 respondents saying the process would help them improve their provision.

The research found that most agreed that their inspection had been conducted respectfully (88%), collaboratively (76%) and empathetically (78%), and almost three quarters (72%) agreed their inspection was tailored to and took account of the context of their provision. However, early years settings reported more positive experiences than schools, with 79% agreeing that inspection teams tailored to their context compared to 65% of schools.

The majority of providers were positive about the content of their report card with 81% agreeing it accurately described what it is like to attend their provision.

The research also identified some ongoing concerns, with workload and wellbeing emerging as the clearest challenges.

In 2027, the IFF will publish a full report capturing the experiences of those inspected across the first full year of inspections under the renewed framework.

Alliance CEO Neil Leitch said: “We know that for many years now, Ofsted inspections have been a particular source of stress and anxiety across the education sector, including among early years providers. As such, it is incredibly positive to see research showing that inspections under the new framework are viewed broadly positively, with those working in early years settings often providing the most encouraging feedback.

“Of course, that’s not to say that there is no work to do. We at the Alliance continue to hear examples of inconsistent approaches to inspection on the ground – particularly in relation to the ‘inclusion’ evaluation area – and there remains confusion around what it means to achieve different outcomes, with some providers reporting being told by inspectors that it is near impossible to be awarded an ‘exceptional’ grade. 

“But the fact remains that when it comes to early years inspections, we have come a long way over the past few years. It is vital now, as the new framework beds in, that Ofsted continues to work closely with the sector to ensure that all inspections are collaborative, supportive and, crucially, fair.”

Short news updates from the early years sector and beyond.

Analysis of Inclusive Books for Children of 2,189 children’s books published in 2025 found that only 150 (6.9%) had marginalised neurodivergent, disabled or minoritised ethnic main characters. The books analysed as part of the Excluded Voices report included baby and toddler books (ages 1-3), picture books (ages 3-7) and children’s fiction (ages 5-9).

Outcomes Matter Consulting (OMC) has secured UK government funding to launch a new SEN+ study. The project aims to develop an AI prototype tool that analyses early years observations to identify special educational needs sooner.