The government's plan to expand funded childcare for working parents "will not work" unless the amount paid to providers is right, MPs have warned.
Underfunding had left the sector "straining to provide" enough places for children, the Education Committee report found.
Early-years charities have welcomed the inquiry's focus on the challenges facing the sector.
The government says it is increasing the amount it pays childcare providers.
Working parents of three- and four-year-olds are eligible for 30 hours of government-funded childcare during term time - but by September 2025, this will be extended to cover children aged nine months and above.
Robin Walker, who chairs the committee, said the childcare market faced significant challenges in "affordability and availability" and "simply extending the number of hours that the government calls 'free' will not work unless the funding rates accurately reflect the costs of providing high-quality early education and childcare".
