The fees that nurseries and childminders are required to pay each year to continue their registration on the Early Years and Childcare Registers are set by the Government and have not risen since 2010.
Ofsted annual fees currently range from £35 for childminders to £220 for group settings and are subsidised by central Government.
However, Treasury guidance states that all regulators should recover the economic costs of what they do through the fees they charge, which is why the minister intends to consult on the matter.
The Department for Education confirmed that increases will be phased in and will not start until April 2017. After the full level of increases have taken effect the DfE said that the expectation would be that all fees would still be subsidised by over 60 per cent of full cost.
In a letter sent to early years and childcare organisations, Mr Gyimah says, ‘I know from meeting many providers that they have faced increases in operating costs and, for this reason, we have resisted any fee increases over the course of the last parliament.
'I remain convinced that Government should continue to subsidise the cost of Ofsted fees paid by childcare providers; but with a growing economy and fee increases across other sectors, we can no longer delay revisiting this area.
‘I intend that any increases will be phased in with plenty of advance notice and still retain a significant element of central government support.’
The issue of Ofsted fees was last debated during the previous Labour administration, when plans to increase fees significantly were scaled back after sector protests.
Current fees
Nurseries (childcare on non-domestic premises) and childminders (childcare on domestic premises) working together currently pay £220 a year to be on the Early Years Register, while individual childminders pay £35 a year.
Settings that have been registered on or before 1 September 2008 on the Early Years Register will continue to pay the £50 level of annual fee until 1 September 2017, unless the Government changes the policy before that time.
Fees are reduced to £35 for care provided for less than three hours a day and for settings that operate less than five days a week or are open for less than 45 weeks a year.
If providers are already registered on the Early Years Register they do not have to pay an extra fee for registration on the compulsory and/or voluntary part of the Childcare Register.
However, providers that are already registered on the Childcare Register must make a separate application and pay a fee if they wish to join the Early Years Register.
Childcare Register fees (for both compulsory and register parts) are £103 for childminders and £114 for childcare on domestic and non-domestic settings.
Commenting on the consultation, a DfE spokesperson said, 'We are committed to improving the care children receive so that every child can fulfil their potential, and there are now a record number of providers rated good or outstanding.
'It is right that providers are subject to robust and high quality inspections to ensure they meet the standards rightly expected by parents. We will be investing over £1bn extra per year by 2019-20 in the early years, and have changed the rules to encourage early years providers to employ more high qualified staff.
'Fees have not increased since 2010, demonstrating our support for providers through some of the most challenging economic times. The Ofsted fee rates for early years providers remain under constant review.'