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Mr. Richards: I agree with much of what the hon. Gentleman has said. Sadly, he lost his way somewhere in the middle, as the Liberal party is prone to do. I agree that it is essential that public money is properly used and properly accounted for. We must be confident that the grants that are paid to providers--public, private and voluntary--will be used to provide good-quality education for our four-year-olds. However, there is no

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need for the Bill to specify auditing arrangements. I had thought that the leader of the Liberal Democrats would intervene, but he has sensibly backed off.

Local education authorities and maintained schools are already subject to audit and the requirements that we are imposing on private and voluntary providers will include provisions for accounting and auditing: they are a requirement of the grant. They will include a right for the Department's internal auditors and the National Audit Office to examine the books of any such provider.On those grounds, I urge the House to reject the new clause.

Mr. Don Foster: I am not entirely convinced by the Minister. Nevertheless there will be an opportunity in another place to take the matter a stage further. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 1

Arrangements for making grants

Ms Estelle Morris: I beg to move amendment No. 5, in page 1, line 6, after '(1)', insert

'Subject to section 7(1A) below,'.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): With this, it will be convenient to discuss the following: Amendment No. 26, in page 1, line 6, after 'may', insert 'by regulations'.

Government amendment No. 27.

Amendment No. 9, in page 1, line 16, at end insert--

'(3A) Any arrangements made under section 1(3) above which specify the age of children shall be made by regulations.'.

Government amendment No. 28.

Amendment No. 2, in page 1, line 17, leave out 'shall' and insert 'may'.

Government amendment No. 29.

Amendment No. 6, in clause 7, page 2, line 41, at end insert--

'(1A) The power to make arrangements under section 1(1) above shall be exercised by order and no such order may be made unless a draft of the statutory instrument containing the order has been laid before and approved by resolution of each House of Parliament.'.

Amendment No. 38, in page 2, line 41, at end insert--

'(1A) Any arrangements for the making of grants under section 1(1) above shall, where those arrangements make provision for the amount of grant payable in respect of a child, be exercised by order and no such order may be made unless a draft of the statutory instrument containing the order has been laid before and approved by resolution of each House of Parliament.'.

Government amendments Nos. 30 to 32 and 34.

Ms Morris: The purpose of this rather large group of amendments is to ensure proper annual debate on the grants that are made under the legislation. As we have said, the Bill gives the Secretary of State for Education and Employment many powers. Not only does she have the power to dictate how a local community will make provision for its early years education, but Ministers can make arrangements about grant criteria, voucher values,

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the framework within which grants are to be administered and what action should be taken after an assessment of the scheme. All that can be done at the moment without recourse to Parliament.

Amendments Nos. 5 and 6 specifically refer to parliamentary scrutiny of the value of the grant, and that would be done in a way that is similar to the current scrutiny of the amount that is put into the assisted places scheme and the student grants and loans scheme. There is considerable similarity between the arrangements for the assisted places scheme and the nursery vouchers scheme. Both involve significant transfers of revenue from local government to central Government and out again. In addition, the nursery voucher scheme can certainly be seen as a significant change in local government finance.

In the interests of good legislation and democracy, it is not acceptable for crucial aspects of the Bill to be decided and controlled by Ministers and Ministers alone in the Department for Education and Employment without proper scrutiny by the House and the other place. The House has a record of being able to scrutinise legislation. It jealously guards that right and exercises it on the assisted places scheme and the student grants and loans scheme year by year. There is no reason why it should not be able to exercise that right in the context of the amount put into grants as part of the nursery voucher scheme. The amendments will allow proper scrutiny by the House and that is right and proper.

Mr. Robin Squire: The Bill sets out the broad framework and the necessary legal underpinning for the grants. It defines what they can be used for and refers to allowing the use of a child benefit database and defining inspection regimes and so on. As I have said--it may even have been in debate with the hon. Member for Birmingham, Yardley (Ms Morris)--the grant arrangement will include a great deal of administrative detail.

It is clearly not sensible to make all these matters the subject of legislation, whether primary or secondary, and I do not presume that the hon. Lady would suggest that. Time-consuming amendments would be needed for the slightest change and that would be absurd. It would also limit the flexibility of grants that would be paid to a range of types of institutions.

Government amendments Nos. 27 and 28 set out the child's age and describe the eligible institutions in the regulations. I shall be brief in speaking to the amendments because I am sure that it will not take much to convince hon. Members that they are eminently reasonable and respond to points that were made to me in Committee. In that context, I note and welcome the fact that Opposition Members agree with the Government to the extent that they have tabled a similar amendment to amendment No. 27.

In Committee, my hon. Friends the Members for Rugby and Kenilworth (Mr. Pawsey) and for Colne Valley(Mr. Riddick) tabled an amendment that sought to put the description of children eligible for nursery education grants into regulations rather than arrangements. They graciously agreed to withdraw that amendment following my commitment to table an equivalent Government amendment on Report--amendment No. 27 fulfils that commitment.

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7.30 pm

Clause 1 defines nursery education for the purposes of the Bill by specifying the upper age limit of children who can be covered by nursery education grants. It would be neither necessary nor appropriate to include in the Bill a lower age limit or any other description of eligible children. That would greatly restrict flexibility in future, but amendment No. 27 would cause the Secretary of State for Education and Employment to make regulations to specify what I might call the lower age limit of children eligible for nursery education grant, although the lower limit need not be a specific age.

As the House is aware, we propose that, initially, the voucher scheme should cover only four-year-olds. The amendment would mean that if, for example, the scheme were extended to cover three-year-olds, fresh regulations would be needed and Parliament would have the opportunity to debate that change, if it so wished.

Amendment No. 28 covers a slightly new area in terms of responding to comments in Committee, but, as hon. Members will recall, I made it clear that I was keeping an open mind on the things that should be in the Bill and the things that should be covered by regulation. The amendment would require the descriptions of providers eligible to receive grant under these arrangements to be specified in regulations. A couple of hours ago, the hon. Member for Bath (Mr. Foster) made passing reference to that. The exception is local education authorities in respect of their schools. I have made it clear on a number of occasions, and "The Next Steps" document also makes it clear, that, to be eligible to receive grant, a provider must be one of the following: a maintained school, a local authority day nursery, a finally registered independent school or an institution registered under the Children Act 1989.

The identity of those eligible to receive grant is an important part of the policy both for parents and for providers. Parents need to know and understand which providers can accept their vouchers, and providers need to know whether they can accept vouchers if the provision that they offer is sufficiently good.

Mr. Kilfoyle: Will the Minister explain just one simple thing? If we have an annual debate on the assisted places scheme, why cannot we have a similar annual debate on the provisions made for nursery vouchers?

Mr. Squire: There are significant differences. The most obvious one is that the assisted places scheme operates on an individual by individual basis, in that the benefit, as it were, that the parent attracts is related to his or her income. With nursery vouchers, we are talking of a standard amount regardless of circumstance. There are other differences, but nursery vouchers are more akin to grants for education support and training, for instance, which are again a standard sum.

By introducing Government amendment No. 28, we have met the concerns of the hon. Member for Bath and others outside. In the same way as changing the age range of children covered by the vouchers is not an administrative detail, so changing the list of institutions that are eligible to receive grant is not an administrative detail. Both should therefore be set out in regulations. As a result of Government amendment No. 28, that will be so. I think that, on reflection, Opposition Members will agree with that.

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Amendment No. 38 puts the amount of grant in regulations. Here we reach the matter that the hon. Member for Yardley referred to. It is essential that grant arrangements should specify the amount, timing, frequency and method of payment of nursery education grants. Providers need that information for planning, but to specify the amount of grant in regulations, and especially in regulations subject to affirmative procedure, would be inappropriate.

The amount of grant payable to any particular provider will depend simply on the number of vouchers that they redeem. The calculation of grant will be a matter of simple arithmetic. There is no need for that to be covered by regulations, just as the amount of grant payable in any particular case is not covered by regulations under section 100 of the Education Act 1944 or GEST regulations.

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