In response to alleged unfair practices caused by COVID-19 disruptions, the Competition and Markets Authority (CMA) published an open letter to the early years sector, on the subject of dealing with parents (consumers) during the pandemic.

The guidance has been released so that childcare providers understand their obligations, under common law, towards parents.

In summary, charging parents cancellation fees, retainers and usual fees during lockdown when nurseries were unable to open, are some of the areas addressed in the letter; and in conclusion, the CMA has decided not to take any enforcement action. However, it will continue to monitor the sector.

The letter also states that the Authority is unlikely to challenge any voluntary arrangements which were agreed between parents and settings, providing parents weren’t pressured into agreeing out of fear that they may risk losing their child’s place or even that the setting may go out of business.

The CMA states; “Whilst the CMA recognises that during the crisis most nurseries and day care businesses are trying to do the right thing under unprecedented circumstances and pressures, at the same time consumers (parents) deserve to have their rights protected. This work is not meant to disrupt any agreements fairly and mutually agreed between parents and early years businesses, but is intended to provide clarity on how consumer law applies to COVID-19 disruptions.

The CMA is therefore asking providers to consider their contracts and arrangements with consumers and take any necessary steps to ensure they comply with the law.”

Purnima Tanuku, Chief Executive of National Day Nurseries Association (NDNA) commented on the letter, saying: “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.”

The CMA letter can be read in full on the government website here.



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