This is an extract from the Childcare Market Report.
To explore more analysis and insights, read the January 2026 Childcare Market Report, which examines the key trends shaping the sector.
RDK Announces Latest Childcare Insights Data
We are pleased to present the latest statistics compiled by our proprietary business intelligence arm, Altius BI. The figures reveal record operational standards, steady consolidation, and an evolving ownership profile. These confluent trends signal a confident and highly active childcare M&A environment heading into a dynamic 2026.
The Evolution of Operational Standards
While overall quality remains exceptionally high, the latest data reveals a critical shift in the distribution of top-tier ratings. The sector is clearly achieving a strong baseline of quality, but reaching the highest level is proving increasingly difficult.
The proportion of settings rated ‘Good’ by Ofsted has soared from 75.4% in 2021 to 82.8% in 2025. Simultaneously, the percentage of settings rated ‘Requires Improvement’ and ‘Inadequate’ has collectively dropped to just 2.3%, down from 5.3% in 2021. This upward pressure on quality results in a highly de-risked and attractive investment market.
However, over the same period, the share of settings rated ‘Outstanding’ has declined significantly, falling from 22.3% to 14.8% in 2025. This suggests that while compliance and good practice are widespread, achieving the ‘Outstanding’ benchmark in England is becoming a rare and premium designation. This is likely the result of more stringent inspection standards, and we look forward to reviewing the impact of the updated November criteria.
For M&A, this trend means ‘Outstanding’ settings are becoming scarcer and will most likely command even higher premiums as acquisition targets, while the vast majority of assets available fall increasingly into the high-quality ‘Good’ category.
This insight highlights the strengthening quality profile and growing resilience of the UK childcare market.
In the next extracts of the January Childcare Market Report statistics analysis, we will explore how fundamentals are translating into structural change, including: market structure of providers by setting and place numbers, as well as ownership ages.
For a deeper dive into these trends, access the full January Childcare Living Market Report.
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