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News and Insight

Competition and Markets Authority Offers Advice to Childcare Sector

One of the best things about working in the childcare sector is the community which feels far removed from other industries. Nursery businesses are collaborative, working with each other and ensuring that quality of provision is high across the board. For this reason, it can feel strange when elements from the realm of commerce intrude on the childcare industry. But as responsible business owners, it is of course important to take notice of regulatory developments, wherever they come from.

The Competition and Markets Authority (CMA) exists to ensure businesses treat consumers fairly. While it might seem strange to many nurseries to think of the parents serve as ‘consumers,’ in law, that is what they are. The important role nurseries play in families’ lives also means that they can have a lot of power when it comes to the commercial relationship, and consumer law exists to ensure that that does not lead to unfairness. Following the Covid-19 closures, the CMA took a look at the childcare sector to ensure that it was adhering to its responsibilities under consumer law.

A particular concern was the practice of continuing to charge parents when the childcare setting was closed. Of course there are many justifications for this, businesses still had bills to pay and the funding available was not necessarily sufficient to meet them. But the CMA wanted to make sure that this was being approached in a way that was fair to the consumer. They did however recognise that during the crisis most nurseries and daycare centres were trying to do the right thing under unprecedented circumstances and pressures. Their intention was to ensure that guidance is available following these unique events.

After investigating, the CMA decided that although it had some concerns about some practices, it would not be taking any enforcement action at this time. They did, however, write an open letter to the childcare sector, setting out some additional guidance for ensuring that they were complying with consumer law when charging parents during a lockdown. Of course, everyone is hoping the worst is now behind us, but with local lockdowns still a possibility, it is important that nurseries familiarise themselves with this guidance, and review their processes to ensure compliance.

You can find the CMA’s open letter to the childcare sector here:

Every business is different, and if you are not experienced in dealing with consumer law, it can be difficult to decide how it applies to your setting. This is an area where your insurance package can really help. Morton Michel’s NurseryCare policy comes with a free telephone line, offered by ARAG, for independent legal advice on any business matter, including consumer protection queries.

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