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Opening or closing a childcare business

The following information is essential reading for those wishing to become registered childcare providers in the City of London. It will support you in understanding what is required and how to best support children in their early years journey.

If you are thinking about setting up a new playwork, early education childcare business or organisation then the City of London Education and Early Years Team is able to provide information to support you.

What you need to consider

Before making a firm commitment to opening a new childcare business, such as a pre-school or day nursery, you should conduct planning and research on the following:

  • Market research
    • Premises (The number of children you are planning to look after will be partly determined by the size of your premises, as you need to have sufficient space for children to play safely in an indoor and outdoor environment. Please refer to section 3.57 of the Early Years Foundation Stage (EYFS) for further specifications).
  • Basic resources for setting up a nursery
  • Startup cost
  • Business planning and financial management (The Business Support Helpline is a national support service for those starting or running a business.
  • The role of Ofsted
  • Marketing
    • Employing staff (The number of staff you will need to employ is dependent upon the age and numbers of children you are providing childcare for. For more information please refer to the latest guidance concerning staff ratios (EYFS Safeguarding and Welfare requirements point 3.28 to 3.37). You will also need to make sure staff and volunteers have the appropriate DBS checks (Disclosure and Barring Service, previously known as Criminal Records Bureau checks).
  • Pension auto enrolment
  • Training

Ofsted recognises three types of childcare these are:

  • Childcare on non-domestic premises - childcare on premises that are not being used as a home, for example a playgroup, day nursery or pre-school, a creche at a gym or shopping centre or an after school and breakfast club.
  • Childcare on domestic premises - four or more people looking after children on domestic premises including childminders and their assistants.
  • Childminders - individuals looking after children on domestic premises which is not the home of any of the individuals being cared for.

If you are planning on looking after children between the ages of birth and five years old you'll need to follow the Early Years Foundation Stage (EYFS) framework. The EYFS sets out the requirements for the welfare, education and learning for this age group.

Get your free copy of the EYFS pack online or call the Department for Education's publications helpline on Tel: 08456 022260.

Free Early Education Entitlement Funding

If you will be caring for children aged two, three and four years old you may also want to think about whether you want to offer Free Early Education Entitlement Funding

From September 2014 local authorities have a duty to secure early education for 40% of all two year olds. All children who meet the eligibility criteria are entitled to receive 570 hours a year over no fewer than 38 weeks of the year from the term after they turn two.  

The FEEE entitles every three and four year old to a free part-time early education place.

In order to receive funding for 2, 3 & 4 year olds, you will need to be registered with Ofsted and enter into a contract with the City of London Corporation which outlines the core principles of the National Code of Practice (September 2014). Please note that providers who open part way through the term (even before the headcount date) will not be considered for the free entitlement until the following term. 

Registering your childcare business

Childcare businesses would usually be required to register with Ofsted. There are two registers, the Early Years Register and the Childcare Register. The Childcare register consists of two parts, the Compulsory Childcare Register and the Voluntary Childcare Register.

In some circumstances you may not need to register your business.

For advice and a set of the correct application forms call Ofsted on Tel: 0300 123 1231

Registering as a nanny

You can register with Ofsted as a nanny or au pair to look after children in their own home.

A nanny can look after children from one or two families at the same time. If you want to look after children from more than 2 families at the same time you’ll need to register as a childminder.

It costs £103 to register with Ofsted.

Registering with Ofsted can increase your professional status and will allow parents to use childcare vouchers to cover part of your salary.

For more information and support, contact the Education and Early Years Team at

Childcare Sufficiency Assessment

The Childcare Act (2006) required all local authorities in England to ensure a sufficiency of registered childcare (for children aged 0-14 years). This aims to support working parents, parents studying or training, and for disabled children (including children with additional needs) up to the age of 18 years.

The Childcare Act (2016) extended the 2006 Act to include new early year’s entitlements to be delivered by local authorities. Under Section 6 of the Act there is also a requirement to produce an annual sufficiency report for elected members and parents.

The report should provide information on the local supply and availability, and how sufficient it is to meet local demand for childcare. Statutory guidance provides clear indication of what must be included in the report; this document seeks to report on this statutory duty, and provide further information about the actions the City of London has been taking to meet the duty and an indication of what is planned in the future.

Download the City of London's Childcare Sufficiency Assessement report. 

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