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Lord Skidelsky: My Lords, I thank the noble Baroness for giving way. I must not be understood to have opposed the expansion of nursery education, where appropriate. My point is that I am opposed to creating a universal entitlement when the requirement is to target scarce resources on those most in need.

Baroness Farrington of Ribbleton: My Lords, I thank the noble Lord for his intervention.

My noble friend Lord Dormand of Easington referred to the value and importance of qualified teachers. He pointed out how essential that is, and how the people of Durham, the people of Sutton and, indeed, those in Solihull resent the Government proposing to remove from them money which they provided disproportionately through their own council tax contributions.

It is important for us to support the call for proper research into the results of the Government's proposals within the scheme. As my noble friend Lord Merlyn-Rees said, the importance of nursery education cannot be underestimated. Indeed, it is particularly important that we recognise that fact. In my experience, very few parents will opt for a playgroup as an alternative for nursery education. It is often used alongside as a supplement to nursery education.

The noble Lord, Lord Rix, and my noble friend Lady David referred in particular to children with special needs and learning disabilities. That is a

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critically important area and one that we must address in detail. The important area of emotional and behavioural disturbance is, again, something which cannot be overestimated. As the noble Baroness, Lady Thomas of Walliswood, said, it is an important area and one, sadly, of growth. The importance of dealing with and meeting the needs of children with such deep behavioural problems must be recognised.

We have had a very detailed debate. It is one which is being watched by an unusually large number of people. The details of our debate will be read, perhaps, by an exceptionally large number of people who are interested in the matter and who have taken the trouble to write to noble Lords. When the Minister replies, I hope that he will be able to tell your Lordships that he will respond to the parental wishes that have been expressed in correspondence to Members of this House.

6.55 p.m.

Lord Henley: My Lords, as I believe the noble Baroness, Lady Farrington, said, there are many key areas to which we shall wish to return at later stages. I certainly look forward to what I shall describe loosely as a most interesting Committee and Report stage and, indeed, Third Reading debate. Some time ago my noble friend Lord Skidelsky made the interesting point--and one with which I have often agreed--that universal agreement on one view is not necessarily proof that that view is right.

I believe that the noble Lord, Lord Morris of Castle Morris, suggested, in support of the universal agreement to his views, that virtually all the correspondence he had received had been very much of one mind on the subject of the Bill. That may be true. Like the noble Lord, and many others, I have received a great deal of correspondence on the Bill much of which, I have to say, seems to have come from very similar sources. Most of it has expressed similar views and, as the noble Lord, Lord Morris, will be pleased to hear, has supported his views as well as opposed some aspects of the legislation.

However, I must tell the noble Lord, Lord Morris, that those views are by no means universal. Indeed, perhaps I may quote the words of a head-teacher in Wandsworth who was reported as saying on the voucher scheme:

    "This arrangement pushes me to raise standards. We cannot afford to be lax or complacent. Anything that forces me to give my utmost should be welcomed".
That extract was reported in the Daily Telegraph in December of last year. Similarly, perhaps I may also quote the National Private Day Nurseries' Association which said that the voucher scheme,

    "will stimulate the market to provide more places. It will give parents improved choices and drive up standards through healthy competition".
There are many who see virtues in the Bill, as indeed do the Government. As I said earlier, I hope that that is something about which we can argue in Committee.

I should say that I found the somewhat hysterical reaction from the party opposite to the whole concept of vouchers to be rather odd in the light of its changing policies in so many areas. I ask the noble Lord--and

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perhaps this is something that he would wish to take up with me on a later occasion, although I do not ask him to intervene now--what is different about vouchers compared to the proposed training credits that the party opposite is now suggesting for 16 to 18 year-olds? Surely they are vouchers but by another name.

Having said that, I accept that there are a number of points that noble Lords would like me to address this evening. However, I am afraid that I shall not be able to cover the wide range of points that have been put to me. Nevertheless, we have considerable time between now and the Committee stage. I shall have time to write in some detail before the Whitsun Recess, or soon after we adjourn, on some of the specific points that other speakers have raised.

However, in effect, I should like to cover six principal points on vouchers. First, phase one and evaluation; secondly, bureaucracy, administration costs and parliamentary scrutiny; thirdly, the allegation that there will be lack of provision in some areas; fourthly, quality guarantees; fifthly--this is obviously something of great importance in this House and a subject which I consider to be of considerable importance in the light of the responsibilities that I have in the new merged department--the special educational needs provision; and sixthly, I should like to say a few words about the points raised by the noble Lord, Lord Prys-Davies, regarding Wales, the voucher scheme and the need for a pilot scheme. Finally, I shall say a word or two before I finish about the second part of the Bill; namely, grant-maintained borrowing and various aspects of it.

When talking about phase one, I should like to make it absolutely clear that we invited all local authorities to put their areas forward. Every authority had the opportunity to join in the scheme at the formative stage and to contribute to its development. If they had specific concerns about how the scheme would affect their areas, then the way to address them was through taking part in phase one and not criticising it from afar. But I have to say that it is simply their loss. Their communities have lost out too and a whole cohort of children have been denied access to a scheme designed--as I put it earlier--to increase parental choice and expand the availability of provision. Obviously I accept that there are only four areas in the scheme but they all genuinely want to take part in the scheme and make it work. I believe they have a wealth of experience and expertise and their close co-operation will prove invaluable. I am convinced that that can only benefit the development of the scheme.

I believe the close proximity of the three London boroughs will enable parents in one volunteer area to exchange their vouchers at another. That will provide considerable information about such cross-border activity. Obviously Norfolk's participation in phase one will allow the voucher scheme to be tested in a rural community. That is important to the noble Baroness, Lady Farrington, who has served on Lancashire County Council, which is an area I know well, and as regards the concerns expressed by the right reverend Prelate. I believe that there are enough areas to test fully important operational issues such as publicity, information and the arrangements for issuing, exchanging and redeeming vouchers.

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Evaluation is an important matter. I believe there is no disagreement over whether the new scheme should be properly evaluated. I can give an assurance that it will be properly evaluated. First, in the short term we shall have to consider the operational arrangements during phase one. Any difficulties in practical matters such as publicity, information and so on will need to be ironed out before phase two. We shall work closely with the phase one authorities and providers and the voucher agency. We shall, of course, pay attention to the views of parents and other interests. But given that practical focus, we do not need at that stage some grand external evaluation of the kind that some noble Lords seem to envisage.

Secondly, in the medium term, the published initial inspection reports will also add to the picture on the crucial issue of educational quality. Inspection findings will be monitored by Ofsted as they become available. Thirdly, in the longer term we need to evaluate the benefits to children's later educational performance. That can only take place when the scheme has bedded down. The effects of subsequent development will not begin to be evident until children progress towards key stage one, and baseline assessment, if developed in a consistent way in response to work now being undertaken by SCAA, could well have a part to play. I can give an assurance that there will be appropriate evaluation. We shall make what information is available available to the House at appropriate times.

There have also been claims that the scheme itself creates excessive bureaucracy; that the costs are excessive; that the money is merely being recycled; and that new burdens are being placed on schools. I give an assurance that the voucher scheme will have small administration costs. We believe that is a small price to pay to give parents the real choice that we are offering. When fully up and running--with costs of some £730 million--the administration costs will be some £20 million, which represents some 2.7 per cent. Most of that will be spent not on administration but on inspection. I am sure that all noble Lords would accept that inspection is important and is valuable. As I have said, the vast majority of administration costs will be spent on the new inspection regime which would be necessary whatever scheme was set up.

As regards the scrutiny that the noble Lord, Lord Morris, sought over the arrangements, the Bill sets out the broad framework and the necessary legal underpinning for the grant; namely, what it can be used for, and allows for the use of the child benefit database, the funding of the inspection regime and so on. The arrangements will include all the bureaucratic administrative detail. I do not believe it is sensible to make that the subject of legislation. As I think I made clear in my opening remarks, the Bill also proposes that the definition of eligible children and providers will be set out in regulations.

As I have said, the arrangements themselves will cover the eligible providers, fixing the amount of grant, the administrative arrangements for assessing how much grant to pay to whom, by what means, and when, and possibly the employment of a contractor to operate the

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scheme. It is important that we get that right. I can give an assurance that the framework--a careful definition of what activities will be involved--will be set out in the Bill. As I said, I do not think it will be necessary for the House to get bogged down in the detailed administrative arrangements. But no doubt they are matters which we could discuss in some other way at some other point.

The noble Lord, Lord Tope, complained about lack of provision in certain areas. I wish to make it quite clear that when my right honourable friend the Prime Minister made his original remarks, he made it quite clear that although ultimately places could be needed for all children, we were never guaranteeing that places would spring up over night. However, over time we are confident that new places will come on stream. It is interesting to note that in one phase one area, Norfolk--or for that matter any of the other phase one areas--there are no parents complaining about being unable to find a place. As regards take-up in those areas, the noble Lord, Lord Walton, referred to a figure of not much more than 60 per cent. I do not know whether that figure applied to Norfolk or to all areas. I can assure the noble Lord that the latest figure for all four areas is some 87 per cent. In Norfolk the figure is some 95 per cent. of parents who have taken up the voucher scheme. That does not imply the voucher is too difficult to cope with or that the systems are too bureaucratic. That is encouraging.

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