Concern over private equity chains buying up nurseries

By the Editorial Team · Monday, August 3, 2026

Private equity-backed nursery chains in the UK are spending more on administrative costs and director salaries while allocating less to staff budgets, raising concerns about childcare quality and increased fees. This has triggered an investigation by the Competition and Markets Authority amid pressure from advocacy groups and government measures aimed at protecting parents from extra charges.

An increasing number of nurseries in the United Kingdom have been acquired by private equity-backed chains, raising concerns over the use of parents’ fees and the quality of childcare services. Analysis of financial data from 2023/24 shows that private equity-owned nurseries spent substantially more on non-frontline costs, such as directors’ salaries, rents, and loan repayments, compared to not-for-profit providers.

According to research conducted by Trinava Consulting, the nine largest private equity-owned nursery chains in the UK allocated 15 percent more of their income toward these indirect expenses than major not-for-profit organisations. Concurrently, these chains dedicated approximately 9 percent less to staffing budgets, potentially impacting the quality of care delivered. The increased costs are partly attributed to debts incurred during acquisitions of additional nursery settings, with some rents reportedly inflated to generate investor returns.

Among the private equity chains examined, Kids Planet and Bright Stars—two of the largest providers by the number of childcare places—paid senior directors salaries of £335,000 and £266,000 respectively. These figures have drawn scrutiny amid claims from parents and nursery staff that such takeovers have led to fee hikes, the introduction of extra charges, downgraded food and toy quality, and the departure of highly qualified employees.

The situation has prompted an investigation by the UK’s Competition and Markets Authority into the influence of private equity and other ownership models within the childcare sector. Advocacy groups such as the Post Pandemic Childcare coalition and Public Childcare Now have criticised private firms for imposing high fees while maintaining low staff qualifications and paying many workers below the living wage.

A spokesperson from the Department for Education stated that the government supports parents and has implemented measures preventing providers from charging additional fees for essentials like food and nappies as conditions for accessing funded childcare places.

Representatives from Bright Stars and Kids Planet declined to comment on the findings or allegations. The ongoing scrutiny underscores growing unease about the balance between investor returns and the quality and affordability of childcare services in the UK.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.