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Baroness Farrington of Ribbleton: The Minister, in his response to the debate, appeared to indicate that were certain phrases or words in the amendment not to be used the Government would be quite happy. He appeared to imply that if the wording of the amendment were to ensure that parents of children in nursery units and classes and reception classes in Solihull were also able to vote, the Government would be happy to satisfy that request. The Minister appeared to be saying that if the franchise were to be widened he would recognise that too.

The objections that have been raised by the Minister to the drafting of the amendment appear to be of more concern to him than the principle. The noble Lord, Lord Bowness, referred to finding a way to simplify the system. Surely the simplest way to make the system easier is for those who are satisfied now to be able to opt-out of having to have a voucher. It is a very strange comment from a Conservative Minister that, on top of the wasteful, bureaucratic cost of paying for what parents already have (and which is funded through the revenue support grant, Government income, the national non-domestic rate, the local council tax, redistribution and the allocation of grant) the Government want to add a procedure whereby, the LEAs have to get the money back through eight different systems, in order that parents continue to have the provision they already have and with which they are satisfied. The Minister says it is perfectly all right: the Government are finding the money from somewhere else. I am sorry. My experience of the people of Solihull and the way they view local government expenditure is that they will not be satisfied by the Government saying that it is perfectly OK, they will make sure that the additional bureaucratic costs come from somewhere else. My experience of parents is that they look at the size of the primary school classes and say, "Thank you very much, Government. We would rather spend the money on teachers than on jumping through eight new bureaucratic hoops".

The amendment enfranchises only parents with places in the current system. That is the Government's comment. But these are the parents who are most

17 Jun 1996 : Column 49

concerned about what they have now being imperilled as a result of the vouchers being imposed. The electorate is exactly the same as that which would apply in the case of a GM ballot. The Government seem to say: "There are parents, parents and parents. When it suits us we will take only the parents of children in a school. When it does not, we will not." Obviously, if the Government were able to support the principle of the amendment and take it away and look at it, we from this side would be prepared to withdraw the amendment at this stage and await the Government meeting the request of parents for parental choice. I see the noble Lord the Minister shake his head against that, and therefore I have no alternative but to seek the opinion of the Committee.

5.40 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 88; Not-Contents, 111.

Division No. 2


Addington, L. [Teller.]
Archer of Sandwell, L.
Baldwin of Bewdley, E.
Berkeley, L.
Blackstone, B.
Borrie, L.
Carmichael of Kelvingrove, L.
Carter, L.
Cledwyn of Penrhos, L.
Cocks of Hartcliffe, L.
David, B.
Dean of Beswick, L.
Desai, L.
Diamond, L.
Donoughue, L.
Dormand of Easington, L.
Dubs, L.
Eatwell, L.
Elis-Thomas, L.
Ewing of Kirkford, L.
Falkender, B.
Falkland, V.
Farrington of Ribbleton, B.
Fisher of Rednal, B.
Gallacher, L.
Geraint, L.
Gladwin of Clee, L. [Teller.]
Graham of Edmonton, L.
Greene of Harrow Weald, L.
Grey, E.
Hamwee, B.
Harris of Greenwich, L.
Hayman, B.
Hilton of Eggardon, B.
Hollick, L.
Hollis of Heigham, B.
Hooson, L.
Hylton-Foster, B.
Jay of Paddington, B.
Jeger, B.
Jenkins of Hillhead, L.
Jenkins of Putney, L.
Judd, L.
Lockwood, B.
Longford, E.
Lovell-Davis, L.
McGregor of Durris, L.
McIntosh of Haringey, L.
Mackie of Benshie, L.
McNair, L.
McNally, L.
Mallalieu, B.
Mar and Kellie, E.
Mason of Barnsley, L.
Mayhew, L.
Merlyn-Rees, L.
Meston, L.
Methuen, L.
Milner of Leeds, L.
Monkswell, L.
Morris of Castle Morris, L.
Nicol, B.
Ogmore, L.
Palmer, L.
Perry of Walton, L.
Plant of Highfield, L.
Prys-Davies, L.
Redesdale, L.
Robson of Kiddington, B.
Rochester, L.
Seear, B.
Serota, B.
Sewel, L.
Shepherd, L.
Smith of Gilmorehill, B.
Stoddart of Swindon, L.
Strabolgi, L.
Taylor of Blackburn, L.
Thomas of Walliswood, B.
Tope, L.
Turner of Camden, B.
Varley, L.
Wallace of Coslany, L.
Warnock, B.
White, B.
Williams of Elvel, L.
Williams of Mostyn, L.
Winston, L.


Aberdare, L.
Addison, V.
Alexander of Tunis, E.
Astor of Hever, L.
Balfour, E.
Belhaven and Stenton, L.
Blatch, B.
Boardman, L.
Bowness, L.
Boyd-Carpenter, L.
Brabazon of Tara, L.
Brentford, V.
Brigstocke, B.
Brougham and Vaux, L.
Bruntisfield, L.
Burnham, L.
Butterworth, L.
Cadman, L.
Campbell of Croy, L.
Carnegy of Lour, B.
Carnock, L.
Chalker of Wallasey, B.
Chelmsford, V.
Chesham, L. [Teller.]
Clanwilliam, E.
Clark of Kempston, L.
Cochrane of Cults, L.
Coleridge, L.
Colwyn, L.
Courtown, E.
Cranborne, V. [Lord Privy Seal.]
Dean of Harptree, L.
Denham, L.
Denton of Wakefield, B.
Dixon-Smith, L.
Downshire, M.
Eccles of Moulton, B.
Ellenborough, L.
Elliott of Morpeth, L.
Elton, L.
Feldman, L.
Ferrers, E.
Flather, B.
Gage, V.
Gardner of Parkes, B.
Gray, L.
Gray of Contin, L.
Harding of Petherton, L.
Harmsworth, L.
Harrowby, E.
Henley, L.
Holderness, L.
HolmPatrick, L.
Hooper, B.
Howe, E.
Inglewood, L.
Jenkin of Roding, L.
Kimball, L.
Leigh, L.
Lindsay, E.
Lucas, L.
Lucas of Chilworth, L.
Lyell, L.
McColl of Dulwich, L.
Mackay of Ardbrecknish, L.
Mackay of Clashfern, L.
[Lord Chancellor.]
Mackay of Drumadoon, L.
Marlesford, L.
Massereene and Ferrard, V.
Merrivale, L.
Mersey, V.
Miller of Hendon, B.
Milverton, L.
Mottistone, L.
Mountevans, L.
Mowbray and Stourton, L.
Munster, E.
Murton of Lindisfarne, L.
Napier and Ettrick, L.
Nelson, E.
Norrie, L.
Northbourne, L.
Northesk, E.
O'Cathain, B.
Orr-Ewing, L.
Park of Monmouth, B.
Peel, E.
Pender, L.
Pilkington of Oxenford, L.
Rankeillour, L.
Rawlings, B.
Renwick, L.
Romney, E.
Saltoun of Abernethy, Ly.
Selsdon, L.
Sharples, B.
Shaw of Northstead, L.
Skidelsky, L.
Stewartby, L.
Strathcarron, L.
Strathclyde, L. [Teller.]
Strathcona and Mount Royal, L.
Swansea, L.
Thomas of Gwydir, L.
Trefgarne, L.
Trumpington, B.
Ullswater, V.
Vivian, L.
Wise, L.
Wyatt of Weeford, L.
Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

17 Jun 1996 : Column 50

5.48 p.m.

Lord Morris of Castle Morris moved Amendment No. 4:

Page 1, line 7, at end insert ("except where any such arrangements would have the effect of reducing the resources available to any local education authority in the first or subsequent financial years of the operation of those arrangements by comparison with the last financial year before such operation").

The noble Lord said: Amendments Nos. 4, 5 and 86 are grouped together. For the convenience and, I hope, intelligibility of this group, I shall move

17 Jun 1996 : Column 51

Amendment No. 4 and leave Amendment No. 5 to the noble Lord, Lord Tope, with the certain knowledge that my noble friend Lord Prys-Davies will be able to enlighten the Committee on Amendment No. 86.

The purpose of Amendment No. 4 is to prevent the loss of resources to authorities with high levels of provision through the system of financing vouchers chosen by the Government. It is intended to press the Government on their justification for imperilling existing provision in a number of areas. The issue was raised at several stages in another place, notably and strongly by the Conservative Member Mr. Iain Mills on behalf of his authority of Solihull.

I have this day received a letter which was wrapped around a large box. I cannot, of course, exhibit the box in any way, but it is a marvellous box and I believe that it is in order for me to refer to it. It contained 1,200 (give or take a few) hand prints from children in the schools in Solihull that would be affected by the Bill. Although I cannot exhibit anything in the Chamber, if at any time Members of the Committee would like to see the kind of artwork that takes place in those marvellous schools--there are some wonderful ones in Solihull--the box is available for their inspection in my room.

The letter is addressed to,

    "Dear All Lords and Ladies, re. nursery vouchers".

It says that they are sending the 1,200 sets of handprints from the children of Solihull, because in Solihull they have an excellent education system for pre-school children which has taken them a long time to build up and which would take only a short time to destroy if the nursery voucher scheme were to be implemented as compulsory. They beg us to consider giving Solihull and many other authorities the chance to opt out of the scheme and continue with their excellent provision. The box was presented to me just after midday today by a lady acting on behalf of the Solihull Parent Action Group. I thought it might lighten the proceedings a little if I were to refer to it.

The method by which the Government propose to fund the larger part of the voucher scheme is, in our view, flawed and of great concern to a wide number of people. Most of the finance will be taken from local authorities in a way which will affect them very differently, and that is the point. Some of the highest providers will lose not only what they spend on four year-olds, but also a great deal of what they spend on three year-olds. In other words, the introduction of vouchers will not only place existing provision for four year-olds in doubt it will impede progress towards expanding nursery education for three year-olds.

In biblical terms it is a case not so much of "Unto him that hath shall be given", but of "From him that hath shall be taken away everything that he hath, especially if he has got rather a lot". Or, to use another parable, the wise virgins are going to be punished and the foolish virgins are going to be given a considerable handout.

The reason that could occur is that the majority of the funding for the scheme is to be deducted from local education authorities and under the Bill redirected to the making of grants equivalent to the value of the voucher.

17 Jun 1996 : Column 52

The problem is that the amounts to be deducted per child bear no relation to the actual cost of providing a place in a specific area. The largest deductions will be made from those LEAs with the highest provision.

The Government will claim that the money lost will simply be regained if parents with vouchers again choose the LEA schools. But that is a simplistic attitude to the problem. We have already heard from my noble friend Lady Farrington of the paperchase--the way in which the vouchers money will go from one end of the LEA to the other and back to where it started in an extremely difficult bureaucratic scheme. It also ignores the impossibility of planning and budgeting for services for which the funding is wholly uncertain until after the start of the financial year.

I hope the Committee will agree that we are not running a corner shop. We are running more than 106 LEAs, and they are running a highly complex and difficult financial operation. Not to be able to plan forward--to have one's forward planning vitiated in this way is extremely serious. The financing method threatens to destabilise existing nursery provision at the price of expansion in areas with fewer places. Not only is that unfair, a more logical system would better deliver expansion in nursery education: if the additional resources which are being created were simply made available to LEAs for the expansion of the public and private sectors in partnership.

Of the £750 million intended to be spent on the voucher scheme in 1997-98, £565 million will be deducted in advance from the revenue support grant payable to local education authorities. Thus £165 million will be new money. The money deducted from LEAs represents over half of the £1 billion which the Government consider authorities should spend on nursery education. But in the case of the high providers such as Solihull, with high levels of provision for both four year-olds and three year-olds, 95 per cent. of the money which the Government consider they ought to spend will be removed to fund vouchers in this circular system. It may or may not end up back with them. What a way to run a railway!

The system is inefficient because the process of passing vouchers from hand to hand involves administrative costs which the Government have conservatively estimated at £20 million of the total. There is no provision in that for the training of staff, or for capital spending on buildings and equipment. Therefore, before the expansion has started, resources are being frittered away for the sake of this ideological experiment. Nor is this experiment one that has been followed through in practice since already in the inner city pilot areas, authorities, we are told, have waived the distinction between children whose parents do and those who do not actually produce a voucher. That must be done apparently in order to cope with the number of parents whose first language is not English and the number of deprived families in the areas concerned. Otherwise we just penalise the children.

In practice therefore the money is not following the voucher-bearing child, calling into question the need for the associated bureaucracy and for vouchers at all. A

17 Jun 1996 : Column 53

more sensible Bill would enable providers to claim grants on the basis of the numbers of four year-olds for whom they provide, without having to present all over the place bits of paper which some parents, for good reasons, cannot produce.

The core difficulty with the mechanism which the Government need to explain is that the deductions will be made according to the number of four year-old children in part or in full-time education in the area rather than the total number of children in the area. That sounds technical. It is. But that technical requirement leads automatically to the highest deductions in the highest providing areas, and that is unfair. The Government need to explain--please, will they do so--why deductions are not based on the number of four year-olds in the population of each area. For example, in Wales the deduction is to be made on precisely that basis, so it is not impossible.

The Government will argue that there is a distinction in that in Wales individual authorities do not have a standard spending assessment for education. That is a technical smokescreen, since the SSA for education authorities in England is drawn up on the basis of four year-olds in the population, and it would be quite straightforward to make the deductions on the same basis. It would produce a proportionate burden all round and avoid removing grant which is being spent on provision for three year-olds.

This is not the easiest thing in the world to follow, which is why I read carefully from my brief. It is important that we understand it and get it right. What it all adds up to is that the Government need to explain the difference between the position in England and in Wales. Further, they need to recognise that a more effective way to expand nursery provision would be to start from the existing base, using LEAs to secure extra places in both the public and private sectors. The new moneys available should be allocated directly to expansion with a strong lead to LEAs being given in national guidance. There should be no bureaucratic or other wastage of scarce additional resources in this very crucial area. I beg to move.

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