UK Government Extends Fee Arrangements for Childcare Providers: What You Need to Know

In a recent move by the Department for Education, the UK government has announced an extension of the existing fee arrangements for certain childcare providers. This decision, encapsulated in the Childcare (Fees) (Amendment) Regulations 2025, aims to maintain affordable childcare services while a broader review of early years registration (EYR) fees is underway.

What's the Deal?

The amendment specifically targets providers whose registrations were automatically transferred from the Children Act 1989 to the early years register (EYR) in 2008. These providers, known as "1989 Act providers," will continue to benefit from alternative fee arrangements until September 1, 2027. Without this extension, fees would have increased significantly from September 2025.

Current Fee Structure:

• Childminders: £35 annually
• 2006 Act sessional day providers (operating less than 3 hours daily): £35 annually
• 2006 Act non-sessional providers (operating 3 or more hours daily): £220 annually
• 1989 Act sessional day providers (operating less than 4 hours daily): £50 annually
• 1989 Act non-sessional providers: £220 annually

Why the Extension?

The extension is a temporary measure to prevent a spike in fees for 1989 Act sessional day providers who operate between 3 and 4 hours per day. This group would have faced an increased financial burden if the alternative fee arrangements had expired in 2025. The government assures that these arrangements will stay in place while it reviews the EYR fees policy as a whole.

Background and Consultation:

The original fee structure, set in 2008, saw modest increases over the years, but has remained unchanged since 2010. A public consultation in 2019 considered increasing these fees, but the outbreak of COVID-19 halted any immediate changes. The current extension reflects the government's ongoing commitment to support childcare affordability.

Impact and Monitoring:

The amendment is expected to have little to no significant impact on businesses, charities, or the public sector. The Department for Education will periodically review the operation of this regulation. There is no requirement for a statutory review clause, as it is deemed disproportionate given the minimal economic impact.

In summary, this legislative change ensures that certain childcare providers continue to enjoy lower fees, alleviating financial pressures while the government evaluates a more comprehensive approach to EYR fees. For now, 1989 Act sessional day providers can breathe a sigh of relief as their fee structure remains unchanged through to 2027.