Our nurseries were bought by private equity firms

Lydia Berman chose her son’s nursery because it was close to home, family-run and affordable.

But suddenly, the fees went up and she was being asked to pay extra for nappies and wipes.

Berman is among a growing number of parents who have seen their nurseries bought out by private equity-backed chains, which have come under fire for allegedly using parent’s fees to give millions to shareholders instead of investing in the quality of childcare provided.

Shorts

Nurseries owned by private equity firms spent at least £82m more than not-for-profits on costs such as directors’ pay, rents and loans in 2023/24, according to analysis shared with The i Paper.

These excess costs include repayments and interest charges for debts taken on by nursery firms to pay for takeovers of more settings, according to Trinava Consulting, which examined the companies’ annual accounts. It said rents are often inflated to extract returns for investors.

The nine biggest private equity-owned chains in the UK spent 15 per cent more of their income on these non-frontline costs than large not-for-profit providers, and nine per cent less on staffing, the firm’s analysis found.

The two private equity-owned nursery chains with the highest number of places, Kids Planet and Bright Stars, gave pay packets worth £335,000 and £266,000 respectively to senior directors.

But the highest-paid director, earning £400,000 last year, was at Grandir UK – which has more than 95 locations across the UK, according to The i Paper‘s analysis of the most recent Companies House data.

Parents and staff who have worked for nurseries bought by private equity firms told The i Paper the takeovers resulted in fee increases, additional charges, lower-quality food and toys for children, and losses of highly-qualified staff members.

The UK competition watchdog is investigating the role private equity and other ownership models are playing in the childcare market, including whether they are working in the interests of families or driving up costs.

It comes as the number of childcare places offered by private equity-backed nurseries has doubled, while the number of places available at not-for-profit providers and childminders has fallen by eight per cent and nearly 40 per cent respectively, according to research from University College London and the Government.

The Competition and Markets Authority is also looking at reports that parents are being charged compulsory add-ons or additional hours to access their entitlements. Working parents of children aged nine months to four years can access 30 hours of Government-funded childcare but often pay for additional hours.

Louise O’Hare, of the Post Pandemic Childcare coalition and Public Childcare Now campaign, said private firms “charge high prices to parents, whilst staff qualifications are amongst the lowest” and many are paid below the living wage.

She said the private childcare sector has “badly and evidently failed” and urged the Government to “properly value early years staff and end privatisation – establishing a national pay scale, ending funding to nurseries that give profits to shareholders, and shifting to universal, directly- funded, and democratically accountable local provision”.

Parents ‘overcharged for extras’

Berman, a 48-year marketing agency owner, was paying around £60 a day when her son first started attending Moor End Farm Day Nursery in Boxmoor, Hemel Hempstead, in 2021.

The couple who owned it had constructed a purpose-built nursery on their farmland, surrounded by animals.

In 2023, the nursery was bought by Kindred Nurseries, a chain owned by private equity firm Livingbridge.

Berman said fees had risen to more than £80 a day by 2025, when her son last attended the nursery.

Under Kindred, the nursery changed its fee for consumables from a daily charge to a flat monthly fee that was the same regardless of how many days parents used the nursery each week.

Berman said some parents complained about this and about being charged for nappies when their children no longer required them.

Kindred’s monthly consumables fees for children over three in 2025 were £60 a month for food, £7.50 for things other than food, and £32.50 for activities, according to its website.

Sarah Ronan, executive director of the Early Education and Childcare Coalition, said many small, independent providers are “struggling to keep their doors open” because Government funding does not fully cover the cost of delivering “free” hours for parents.

“Childcare needs greater investment, but it matters what kind of investment that is and where the money ultimately goes,” she said.

“Public funding should support decent wages for early years professionals, high-quality inclusive provision for children and more places in underserved communities, rather than servicing unnecessarily complex financial arrangements and extracting value from an already fragile system.”

Vivek Kotecha, director of Trinava Consulting, said that if the growth of “extractive investment” in nurseries is left to continue, “large financialised nursery chains will start to dominate: squeezing both staff and parents”.

‘Parents are trapped’

Maria, who spoke using a pseudonym, saw her childcare fees go up after the nursery her daughters attended was acquired by private equity-owned Bright Stars in 2018.

Bright Stars, formerly named ICP Education, was founded by Innervation Capital Partners and sold to Oakley Capital in 2021 – both private equity firms.

Maria’s nursery, Montessori on the Park in Tower Hamlets, London, put up fees by around five per cent in 2019, 10 per cent in 2023 and eight per cent in 2024, documents seen by The i Paper show.

“Effectively, your child was already settled in a nursery space, seemed happy enough, and there wasn’t any other childcare available, so you’re pretty much trapped in that scenario when people just add extra charges,” said Maria, a 44-year-old policy researcher.

Consumable fees also rose, reaching £78 a month for children who attended three full days a week in 2024, including the 30 Government-funded hours.

That year, she moved her youngest daughter to a cheaper, not-for-profit provider at a school in her area.

“The experience at the school-based nursery was quantifiably different, with staff consistent and a very clear leadership structure,” she said. “My child is in reception and the same nursery staff are there still, and she sees them at after-school club.

“This experience is of a community school, with council pay scales, running a nursery itself – not outsourcing it to a private company.”

Frozen food replaced organic, fresh food

A former worker at the Montessori on the Park nursery in Tower Hamlets said some staff who had worked there for years left after it was sold off. Staff holiday allocations were reduced by several weeks by the new owners.

She said the food budget was cut from around £1,000 a week to £350 a week for the same number of children, but fees were not reduced for parents to reflect that.

She claimed that children went from eating organic, fresh food, including meat, to frozen food from a wholesale supplier because of the budget cuts.

She said the nursery would not take children who could only do the 30 Government-funded hours and would instead accept parents who paid for additional hours on top of this.

Extra training offered to staff often came with stipulations about how much longer they had to work for the nursery, which dissuaded them from completing it.

Children left with broken toys and ripped books

A former staff member at another nursery bought by Bright Stars – Springburn Childcare in Hungerford, Berkshire – said they struggled with budget cuts after the takeover.

They claimed the nursery was left with just £250 a month to spend on supplies for its 84 children after food and essentials were factored in.

The staff member said books would get ripped or chewed up and had to be taped together as a “temporary fix” because they could not be replaced.

“It was the same for wooden toys that had broken – for example, a wooden stacking train or something where one of the wheels had come off,” they said. “The children would just have to play with it as is.”

At Thrive Gilsland Manor House in Edinburgh, which is owned by private equity firm Apiary Capital, managers would prioritise accepting parents who wanted their children in the nursery five days a week and paid for extra hours on top of the Government-funded provision, according to a former staff member.

She was earning about £13 per hour – close to the living wage. Forty-five minutes of paid breaks were cut in recent years, leaving staff with just 30 minutes for a lunch break in a 10-hour shift.

Around a year and a half ago, when she left, the nursery was charging about £80 a day.

The owners of Bright Stars, Partou and Kids Planet declined to comment. The owners of the other nurseries named in this article did not respond to a request for comment.