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Baroness Farrington of Ribbleton: My Lords, is the Minister prepared to give an undertaking that the amount of money available both for capital expenditure and per pupil in this age group that has been available in Norfolk and the other pilot areas would be the absolute minimum that would be available at any time for pupils were the Government to extend the scheme across the whole of England and Wales?

Lord Henley: My Lords, I take it that the noble Baroness is looking for identical sums of administration money available in the four areas to be made available when the scheme goes nationwide. I think that is what she was asking for. Obviously I cannot give that guarantee. Obviously in the first year the administration costs are likely to be higher; that is the point of a pilot. We hope to save money in the second and subsequent years as we go nationwide. The administration costs in this first year--which will cover a wider area than administration--are proportionately greater. However, long term, we are looking at administration costs of some 2.7 per cent., with most of that going on inspection. I believe that even the noble Baroness would accept that that is a cost which it is quite right to expend. We believe inspection is important, and I suspect that the noble Baroness does too.

Lord Ponsonby of Shulbrede: My Lords, the Minister gave the figure of 87 per cent. take-up, which is the figure I also was given by the London Borough of Wandsworth. Does he accept that the London Borough of Wandsworth has no idea what has happened to the other 13 per cent.? It does not know why those people have not applied or whether the take-up was fully 100 per cent. before. Does the Minister really think that this figure is as good as he is suggesting?

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Lord Henley: My Lords, we would hope to hear more from the London Borough of Wandsworth in due course. As I said, the figure in Norfolk is 95 per cent. I think that is a pretty good figure. This is not a compulsory scheme and we are not talking about compulsory education which starts at the age of five; we are talking about a voucher scheme for those who want to make use of it. It might be worth finding out why some parents did not wish to take up the scheme, or whether they did not know of it, in which case there might be other approaches that need to be taken.

The noble Lord, Lord Dormand, in referring to Durham and the noble Lord, Lord Merlyn-Rees, in referring to Leeds, were worried--this has been a concern expressed on many occasions--that many LEAs, and particularly the high providing LEAs, would lose money. I give an assurance that that is not the case. So long as each LEA continues to recruit as many four year-olds as they do now, they will not lose any money at all. As it is there is an extra £165 million per year of new money to give vouchers to those children not currently receiving nursery education. It is available to many LEAs to increase the provision they have available. Similarly, as regards all those parents who the noble Baroness, Lady Farrington, says would like to opt out of this scheme, if they feel that the provision they are getting at the moment is good provision, then they are in effect opting out of the provision by staying where they are. Parents can make use of their vouchers for children to stay where they are. That is perfectly fair. It allows parents to put their money where their mouth is, and it allows other parents to make a similar choice: to send children to the schools or the nurseries of their choice.

The noble Lord, Lord Dormand, asked how LEAs will find the cost replacement if the cost exceeds the £1,100 value of the voucher. I can give an assurance that, so long as the parents continue to choose those schools, they will still receive the £1,100; the LEA retains the difference and will therefore be no better off and no worse off than it was. If a great many children leave the LEA schools, the LEAs will lose out. But my belief is that many LEAs will find that, if they provide good places, they have little to fear.

Baroness Hayman: My Lords, I am grateful to the noble Lord for giving way. Will he deal with the position of schools in LEAs which already provide education for four year-olds whose parents, whether through moving address, language, or other problems, do not claim their voucher? I understand that in the pilot schemes the schools are being funded for those children. Will the noble Lord give an assurance that that will continue? If it continues, why does he not fund the provision in the first place and not have the nonsense of the vouchers?

Lord Henley: My Lords, obviously protection of the appropriate source was needed in the pilot areas. If we found that that problem was likely to continue, it is a matter that we could address. I could, I hope, offer a degree of comfort to the noble Baroness on that matter.

I now turn to guarantees of quality in nursery education. That is very important. We believe that the scheme must be of a high standard. There will be four

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main elements for assuring quality. Providers of nursery education will have to be either an institution registered or exempt from registration under, I think it is, Part X of the Children Act, or registered as an independent school with the Department for Education and Employment, or a locally maintained school, day nursery or grant-maintained school. They have to confirm that they will work towards the desirable learning outcomes. I do not think that it is necessary for me to go into detail as to what SCAA has put forward on that basis, but I think that those are learning outcomes which most would accept as appropriate at that age. They have, further, to agree to be inspected regularly by Ofsted inspectors to maintain standards. I take the rather detailed point made by the right reverend Prelate relating to the nursery sections of voluntary aided schools. If the right reverend Prelate will accept it, I should prefer to write to him on that point. Finally, providers will have to undertake to publish information for parents giving details of staffing, admission arrangements, educational programmes and other important matters.

The noble Lord, Lord Merlyn-Rees, in asking about not insisting on qualified teachers, told us of his interesting experience, I think as an unqualified teacher in the county of Norfolk.

Lord Merlyn-Rees: My Lords, I should hate to upset anyone in Norfolk. It was said to me, "That's where you ought to go if you have no qualifications". That is a different point.

Lord Henley: My Lords, I take the noble Lord's point. I was speculating whether he had had the honour to teach my right honourable friend the Secretary of State for Education and Employment, and, if so, to offer him my congratulations on a thoroughly good job. However, I do not know how the ages fit in; we will leave that matter.

As regards not insisting on qualified teachers, it is important to recognise that many four year-olds are already in settings in the private and voluntary sector where there is no qualified teacher. Excluding such settings from the voucher scheme would do nothing for the quality of educational experience for those children. However, by allowing such settings to take part in the voucher scheme, new money would be injected, education inspections would begin and, over time, the quality levered up, should that be necessary. The quality could be high even without qualified teachers. It is vital that we acknowledge where we start from in this field rather than starting from some other point.

My noble friend Lord Skidelsky made the point that there was too much regulation and that we should not seek excessive regulation and inspection. We believe that it is right to seek to strike a balance between allowing parents a free choice and giving both parents and taxpayers the assurance that the places exchanged for vouchers are of good quality. I also believe, as I have made clear on other occasions, that inspection throughout the system can do a great deal to lever up standards. I realise that my noble friend may not accept my point. However, I believe that we must seek an appropriate balance.

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I move to special educational needs. As I said, this is a matter of considerable importance to this House, and one on which this House always provides a wealth of expertise and knowledge which is a refreshing change from possibly other institutions.

The voucher scheme will, for the first time, enable all four year-olds to experience three terms of good quality education. For some children, that means, I hope, early identification of their learning difficulties. Further, I can assure the noble Lord, Lord Rix, that a firm commitment has been made to consult interested parties during Phase 1 about making it a requirement that all providers have regard to the SEN code of practice--a code which emerged as a result of the Bill going through this House, and one of which we can all be proud.

Further, all nursery voucher redeeming institutions of whatever status will be expected to include in published information for parents details of their SEN policy. That will state the admissions policy and what consideration is given to children with SEN, the facilities available to assist and allow access for children with disabilities, details of staff with knowledge and skills in SEN, and a named member of staff with responsibility for SEN, and links with outside bodies--the LEA and other schools.

As I said, I believe that there will be time for debate on SEN matters at a later stage. I do not wish to delay the House unduly this evening. But, in response to one remark from the noble Lord, Lord Morris of Castle Morris, and others, perhaps I may add this. The special educational needs consortium, from which I believe the noble Lord quoted, has accepted that an enhanced value for vouchers with special needs is neither necessary nor practical. No doubt, again, that is a matter that we can pursue. I do not believe that this is simply a question of pouring more money into the proposal but of making sure that the right practices are adopted in the institutions which are allowed to be voucher redeeming.

I turn briefly to Wales and the concerns raised by the noble Lord, Lord Prys-Davies, touched upon by the noble Lord, Lord Merlyn-Rees, and no doubt of concern to the noble Lord, Lord Morris of Castle Morris. I take those concerns on board. They are matters of a more detailed kind that I should like to put to my right honourable and honourable friends in the Welsh Office. However, I wish to address one point. The noble Lord called for a separate pilot scheme in Wales before we proceed. I do not believe that there is a case for such a separate pilot scheme for Wales. We made it clear that pilots were asked for throughout England and Wales. The simple fact is that there was no volunteer. In any event, it was made clear that any pilot would concern not the principle of the voucher scheme but only the operational aspect.

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