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Baroness Perry of Southwark: My Lords, I am the first to wish to cut down on bureaucracy and I think there are real concerns about the paper chase that is implied by the enactment of the Bill. Nevertheless, it seems to me that there is a major problem with these amendments as they are proposed which I consider would have a very unfortunate effect. They could put a real brake on the opportunity for expansion of any local authority provision.

If the grants were to be made only in respect of voluntary and private provision, and if a local authority were to decide (as it would be quite free to decide) not to expand its nursery provision, then parents who wished to send their child to a good local nursery school would be unable to do so. It is all very well to protect the position of those parents whose children are already in local authority nursery education, but those new parents who might decide that they want their children to go would not be able to use a voucher to do so. Therefore the extraordinary effect of these amendments would be to make all the expansion happen in the voluntary and private sector and no expansion in the

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good nursery schools and classes which exist in the local authorities. I am sure that that is not the effect that noble Lords who have proposed these amendments would wish them to have, but I cannot see how it could be gainsaid.

At present, as we know, many local authorities have cut back on their nursery provision and there is no guarantee in the future that they would not continue to do so. The small extra amount of money which would become available to them because of the reduction in bureaucracy would not necessarily be spent on expanding their nursery education. Even in the first case, and certainly in the future, there would be no guarantee of expansion there. This seems to me more like the kind of provision one sees in a developing country, not in an advanced and civilised country like our own. We want to see our local authority provision expand as well as our private and voluntary provision.

The Minister of State, Department for Education and Employment (Lord Henley): My Lords, we have had some beguiling words from noble Lords who tabled this group of amendments. It is important to assure the House that this is yet another attempt to delay implementation of the scheme and to exclude existing provision from the scope of the scheme--existing local authority provision, of course, rather than existing private and voluntary sector provision. So, in essence, this is a series of amendments about delay and about preferential treatment for the existing local authority provision. Parental choice is set aside.

It was right for the right reverend Prelate to draw attention to some of the technical defects of these amendments. We should remind ourselves that as a revising Chamber it is not right on Third Reading to bring forward amendments which do not achieve what the proposers of those amendments have set out to achieve. I have to make it clear to the noble Earl, Lord Baldwin, that his claim that they do not set aside parental choice is wrong. If his intention is that there should be total freedom of parental choice, the amendments do not achieve that aim. It would not be right for us to pass them.

We must address what noble Lords opposite and local authorities are frightened of. On the one hand, noble Lords, together with a number of local authorities, tell me how good their provision is, how it meets the needs of the local community, how it is of good quality, and how parents are completely satisfied with it. But on the other hand, noble Lords and the same local authorities tell me that they are frightened that parents, with the new found mechanism that the Bill will provide to express their choice, might flee the maintained sector. We cannot have it both ways. If, and I appreciate that is a big if, local authorities are providing what parents want, and parents continue to choose local authority provision, what have they to fear? I contend that if local authorities are making the right provision, they have nothing to fear.

It would be right for me to say a little about how the money will be deducted. Central government are providing a significant amount of new money to meet

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the costs of giving a voucher to every four year-old whose parents want it. But it is obvious that in order to avoid double funding, some money has also to come from local education authorities' existing funding for four year-olds.

There has been much misrepresentation of the way in which the amount to be taken from each LEA's funding will be calculated. I shall therefore explain the proposal in straightforward terms. Local authorities currently receive funding from the Government for educating children under five. When the nursery education voucher scheme starts, the amount of funding coming through the present route will be reduced. The amount it will be reduced by is the number of four year-olds currently attending state schools in the LEA, multiplied by the voucher value.

That means that if a four year-old is attending a state school in this school year, the LEA's funding in the first year of the voucher scheme will be reduced by a certain amount for that pupil. But if that four year-old's place is filled again under the voucher scheme, then the LEA will get back that same amount of money through the voucher. If the LEA creates a new place, then it will get the voucher money even though it has not had any funding deducted for that place.

So the only LEA provision which is threatened by the voucher scheme is poor provision--provision to which parents do not choose to send their children. I can only assume that those who talk about schools "losing" funding have very little faith in the quality of those schools.

The amendments have two purposes: to deny parents the choice we seek to give them; and to shield local authority provision from any chance of losing funding. Parents deserve choice. They know best what suits them and their children. Through their vouchers they can demand over time the provision of new places that meet their needs in local authority maintained schools or the private or voluntary sectors. Local authority providers, too, can modify what they do to suit parents and their children. But the amendment cuts across all that, and leaves the providers in charge. That will not do.

Subsection (4A) of Amendment No. 5 attempts to define the nursery voucher in statute--a point made by the right reverend Prelate. I suspect that a close examination would show that the attempt is not entirely successful. Defining the voucher in primary legislation would be extremely cumbersome, and it is for precisely that reason that the word "voucher" does not appear on the face of the Bill.

Further, much has been made of the £20 million alleged to be wasted on administration. The vast majority of that money is to go on inspection. The lion's share is for that new education inspection regime--one that does not exist in the private and voluntary sector. I am sure that that is something that the noble Baroness, Lady Farrington, will greatly welcome. She also alleged that the scheme was unpopular. Perhaps I may assure her that a survey conducted by my department showed that 60 per cent. of parents was in favour of the scheme. Its very popularity may be why noble Lords opposite so

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fear it. That is two and a half times as many as who were against it; and 87 per cent. of parents in Norfolk said that they were in favour of it.

As I said, the amendments cut across the purpose of the Bill. All I can recommend to the House is that the amendments be rejected. They are, as I said, defective. They do not achieve what is wanted. Even if they did, we do not believe that they are right way forward. I hope that the noble Earl will listen to my words and consider withdrawing his amendment. If not, I ask my noble friends and other Members of the House to reject the amendments.

The Lord Bishop of Ripon: My Lords, before the Minister sits down, will he correct my lack of understanding of one matter? I believe I heard him say that parental choice would be undermined by the amendment, but my reading of it is that even if the amendment were passed parents would still have the choice of withdrawing their children from existing local authority nursery provision and going elsewhere if they wished. Nursery schools would thereby lose income. Therefore I do not see how the amendment protects local authorities or undermines parental choice.

3.45 p.m.

Lord Henley: My Lords, with the leave of the House, I must remind the right reverend Prelate that we are at Third Reading. That is why it is undesirable to debate such an amendment at such a late stage. My advice is that the amendment would not achieve that and would deny parents the choice that we wish to give them. For that reason, the House should reject the amendment. The amendment does not achieve what the noble Earl claims; that is, protecting local authorities while maintaining choice for all parents.

The Earl of Mar and Kellie: My Lords, before the Minister sits down, does he agree that when a voucher is not applied for or is not placed because parents cannot find a suitable nursery, or is lost, that funding disappears?

Lord Henley: My Lords, again, perhaps I may remind the House that we are on Third Reading. That is not a valid point. The surveys we have conducted show that the vast majority of parents, particularly in Norfolk, can obtain vouchers. Obviously not all of them want vouchers. We are also seeing new provision occurring. We never said that there would be an automatic entitlement to a place the minute the Bill came into effect. We have always said that we look for growth in provision over time.

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