do you mean a playgroup where parents leave the children for 2 and a half hours and the term before their 5th birthday it is free? If so you do need to be Ofsted registered. Staff need CRB checks and to be paid, you need a committee of volunteers to run it to.
If you mean where parents stay too that is a Toddler group and doesn't need to be registered. Staff are volunteers or the parents that stay.
Oh dear, I have set up a 'playgroup' but I think I have used the wrong term. Anyway, my informal 'playgroup' consists of 4/5 mums and we hold coffee mornings/afternoon teas in our homes on a weekly basis. we take turns to host and parents stay with their children.