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Nursery Education and Grant-Maintained Schools Bill

3.41 p.m.

The Minister of State, Department for Education and Employment (Lord Henley): My Lords, I beg to move that this Bill be now read a second time. Before starting, I do not know whether on a Bill of this kind one should declare an interest as a parent. If that is the case, I should declare the interest of inter alia a two-and-a-half year-old who will be a beneficiary of this legislation in January 1998 and, following the example of my noble friend the Chief Whip, another in a few weeks' time.

The Bill introduces two important new policies in the field of education. It provides the basis for a significant expansion of nursery education through the creation of a nursery voucher scheme and it will allow grant-maintained schools to borrow commercially.

The Bill concerns education in England and Wales only. We have had the advantage this afternoon of seeing the conclusion in this House of the parallel proposals for nursery education in Scotland. That Bill now goes on to another place.

Good quality nursery education is important for children's future development. That view is not, I believe, a matter of party-political controversy. There is general agreement that there should be a significant expansion in nursery provision. My right honourable friend the Prime Minister made a commitment that new nursery places would be made available during the lifetime of this Parliament. We have also committed ourselves to providing, over time, a nursery place for every four year-old whose parent wants one. In England and Wales, we are providing in excess of £390 million of new money over three years.

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The foundation for this is the Bill now before the House. The central proposal is in Clause 1, which empowers the Secretary of State to make grants for nursery education. The remainder of the clauses and schedules dealing with nursery education lay out the necessary framework and the legal underpinning for the grant.

Some noble Lords will doubtless have noticed that the word "voucher" does not appear on the face of the Bill. There is no need for it to do so, as it will be a mere device used for calculating the level of grant to be paid to nursery providers. There will be a document, a piece of paper, which for convenience we will call a voucher. This voucher has no face value, is not transferable and is not what I understand lawyers might call a means of exchange. Although the voucher is an important part of our proposals, it is strictly an administrative tool and not in any sense a kind of currency.

In putting forward the Bill in its current form, the Government were mindful of the need to ensure that the exercise by Ministers of functions conferred on them by Parliament is subject to proper scrutiny. We were also conscious of the need to avoid cluttering up primary legislation with unnecessary or contingent administrative detail.

The principal purposes of the grant are therefore stated on the face of the Bill. Some of the main features of the grant will be set out in regulations; and the administrative details will be left to arrangements.

With those considerations in mind, we take the view that the regulations should cover the three most fundamental aspects of the arrangements of the nursery voucher scheme. These are: first, the children in respect of whose education grant may be paid; secondly, the descriptions of providers of nursery education to whom grant may be paid; and, thirdly, in the light of the views of the Delegated Powers Scrutiny Committee, whose report we have before us today, the method of calculating the grant that is to be paid. This last aspect will be the subject of an amendment which I shall introduce in due course at a later stage of the Bill.

The remaining administrative arrangements cover the mechanics for issuing and for redeeming vouchers. These are details that may need to be changed at short notice and should not be spelt out in legislation.

Our approach has been commended by the Delegated Powers Scrutiny Committee, to whose report I referred. I quote from its report which says that, if the House agrees to the amendments that the Government propose to bring forward,

    "the delegated powers in the bill will be subject to appropriate parliamentary control; and that there is nothing further in the bill on which we invite the House to act".

I turn now to the detail of the voucher scheme. The mechanism of vouchers puts parents in the driving seat. But parents will want to be reassured about the quality of the provision that is available. Our proposals will bear on the quality of the education provided in nursery institutions in three main ways. First, there will be a common inspection framework for all institutions which redeem vouchers. The Office for Standards in Education--Ofsted--and its Welsh equivalent, the

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noble Lord, Lord Morris, will be pleased to hear, will be responsible for drawing it up, for recruiting and training inspectors and for monitoring them. A number of detailed provisions relating to inspection are set out in Schedule 1 to the Bill.

Secondly, all providers will be required to work towards the desirable learning outcomes formulated by the School Curriculum and Assessment Authority and the Curriculum and Assessment Authority for Wales. The inspection arrangements will ensure that they are doing so.

Thirdly, all the institutions which redeem vouchers will be required to publish details of the education they provide and staffing and admission arrangements. Together with the evidence from inspections, this information will allow parents to make informed decisions about the institution their child will attend.

The voucher funding mechanism is new. But we are not proposing to introduce it untested. The first stage, as many noble Lords will know, is already under way in four volunteer local education authority areas--Wandsworth, Kensington and Chelsea, Westminster and Norfolk. Over 14,000 parents of four year-olds have already received vouchers, and are using them. Early indications are that the scheme is running smoothly, and new places have been created.

Let me now turn to the second part of the Bill. Commercial borrowing will be of great benefit to grant-maintained schools. They are ambitious institutions and many have plans for building work; sports halls, arts centres and a host of other improvements to their facilities. Borrowing will diversify the sources of finance on which grant-maintained governors can call.

We know that many grant-maintained schools are keen to borrow and that lenders will want to lend. But not all schools will be able to offer collateral for loans. But as grant-maintained schools are stable and successful institutions with a reliable income, we believe they will have no difficulty in negotiating suitable loans and terms for those loans.

However, in proposing that grant-maintained schools should have the power to borrow and to charge their premises, we are conscious of the need to safeguard publicly funded assets. That is why the Bill provides for borrowing to be subject to the written consent of the Secretary of State. My right honourable friend proposes to make an order delegating the function of giving consent to the Funding Agency for Schools in England. Because the funding agency already calculates and pays grants to grant-maintained schools, it is well placed to apply safeguards to ensure that borrowing by grant-maintained schools is both prudent and does not put vital assets at risk.

Although the party Opposite opposed these proposals in committee in another place, I was interested to see that--having listened, I suspect, to the arguments of my honourable friends in another place--they are now so impressed that they will allow all schools to borrow. I shall be very interested to hear the views of the noble

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Lord, Lord Morris, who speaks for the party Opposite, and how he will develop that idea. I look forward to his words in due course.

This Bill recognises the priority the Government intend to give to improved nursery education for all. It provides the basis for an expansion of provision to meet our commitment that all four year-olds, should their parents so wish, benefit from three full terms of nursery education before compulsory school age.

The decisions about exactly where that expansion will happen will be taken, through the voucher mechanism, by those with the most vital and immediate interest in successful nursery education, and that is their parents. Along with the proposals for additional freedom for grant-maintained schools, the nursery scheme builds on themes which have underpinned all the Government's education reforms--choice, diversity and quality. I commend the Bill to the House.

Moved, That the Bill be now read a second time.--(Lord Henley.)

3.52 p.m.

Lord Morris of Castle Morris: My Lords, Charles Lutwidge Dodgson, otherwise known as Lewis Carroll, invented the verb "to chortle", meaning, "to chuckle and snort", and as well as turning in his grave he would doubtless have "chortled in his joy" at the Alice in Wonderland fantasia of the Government's legislative proposals in the field of education this Session.

First, the Prime Minister's bright idea to "extend parental choice" by letting Church schools take a fast track to grant-maintained status without consulting the parents or the Churches, fell on stony ground and, because it had no root, it withered away.

The Education (Student Loans) Bill was the second ignis fatuus of the year and the announcement on the 13th May by Barclays and the NUS shows that despite the Government's best efforts in resisting our proposed amendments, they were unable to prevent the private sector and consumers from agreeing pretty well all the amendments which the Government had either pooh-poohed as irrelevant or rejected as insoluble.

Would that this nursery vouchers scheme were as capable of being redesigned by those people who have a real working grasp of the issues involved. The Labour Party repeatedly offered to sit down with the Government and the putative providers to work out a genuinely effective system, which would provide places for three year-olds as well as four year-olds. Everyone supports the expansion of high quality nursery education, but we believe it would be best delivered by steady development from the existing base, with additional funding going to direct expansion of nursery places. This Bill presents an absurd, wasteful and irrelevant paper-chase with the wretched voucher going through nine or, some say, 10, stages in its progress from the Child Benefit Agency through to the school.

We need look only so far as Europe to see it being done infinitely better. In Belgium attendance at pre-school institutions is optional; free of charge for

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children from two-and-a-half years of age to six. Ninety-five per cent. of three year-olds and 97 per cent. of four year-olds and 100 per cent. of five year-olds attend. They need no vouchers.

In Denmark, 90 per cent. of five to six year-olds attend pre-school classes and parents do not pay fees in municipal schools. In Spain, pre-school education is available for children up to the age of five and in public institutions it is free. France, of course, is famous for its pre-school provision, and the percentage of French children in the age range from two to six attending pre-school institutions is higher than in any other European country except Belgium. And in public institutions, which represent 85 per cent. of the provision, it is free. Britain has nothing to match the Ecole Maternelles, and yet we ignore the French success. All this, and not a voucher in sight!

From the moment this Bill was published it has been received not with a welcome but with hostility from all sides. The AMA document clearly prefers steady expansion to any form of voucher system. It points out that the proposed funding arrangements will penalise LEAs with high levels of provision; that vouchers are simply an automatic subsidy for parents who now pay for private nursery provision, and that,

    "The scheme makes a mockery of Parliamentary consideration, since no clear results will be available from the pilots".
Hardly surprising, since only four local authorities out of more than 100 could be persuaded into Phase I, and three of these are in Inner London and quite unrepresentative of the nation.

The Association of Teachers and Lecturers complained about quality assurance, administrative costs and complexity, inadequate levels of training, and stated that much of the expenditure will be "deadweight funding"--that is, public money will simply replace payments now made by parents to private nursery schools.

Even our old friends the Conservative Education Association stated that it did not feel that a voucher scheme was the most efficient way of expanding pre-school provision, and expressed serious doubts about the non-playgroup private sector being prepared to invest in capital spending to accommodate additional demand for just one year group. And so it goes on.

The Early Childhood Education Forum pointed out that voucher systems have not been found to work elsewhere. They said:

    "There is no evidence that they achieve greater economy, efficiency or quality. Vouchers can only be effective if there is a surplus of provision over demand (which there is not); if they cover the cost of a place; if there is sufficient money for start-up costs, training, etc.; and if there is additional weighting for children with special needs".
The Special Education Consortium was totally opposed to the voucher scheme, because it will not lead to the development of good quality provision for children with special educational needs and could threaten existing provision. I challenge the Minister, when he winds up, to produce evidence to rebut those deadly specific assertions.

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Not one of the organisations most closely concerned with pre-school education has spoken out in support of the Bill. Even in Norfolk, where the system is being piloted, the leader of the Labour Group has said on TV

    "We'd prefer this legislation to fail and to see it replaced by proper expansion of nursery education."

Parents, teachers, headteachers, school governors, parent teacher associations, and teachers' groups are equally hostile. I have never had a postbag even remotely like the one I have had about this Bill. Hundreds of letters have landed on my desk urging that this Bill should be rejected because of the damage it will do.

A deputy headteacher from Calderdale writes:

    "The Bill will reduce quality ... staff will not need to be qualified, there will be no need for a minimum amount of space per child, there will be no need for outside play areas, in fact anyone could set up a nursery."
The PTA of East Prescot Road Nursery School, Liverpool, asks us to put down an amendment allowing Liverpool and similar authorities to opt out of the scheme. We shall do our best to oblige. The Hampshire Federation of PTAs points out that the voucher will not pay fully for a nursery place, which it estimates as costing at least £2,500 per year.

As might be expected, many schools, parents and governors in Wales drew my attention, and that of my noble friend Lord Williams of Mostyn and others, to the March 1996 report of the Select Committee on Welsh Affairs, which felt that this Bill was a solution only for those areas with no commitment to pre-five year-old education. The Reverend Alan Suter, chairman of governors at St. Peter's School, Rossett, in Clwyd writes,

    "if the voucher scheme is implemented, we anticipate chaos among school governors and staff".

In Norfolk, American families resident there were bemused by the whole system, and deeply concerned about having to forward original passports or birth certificates to confirm their eligibility. So let us hear no nonsense from the Government about "teething troubles". There are far too many of them, and they bite far too deep. One correspondent in Norfolk writes:

    "Norfolk [is] ill-prepared for this, but is clearly only adopting the scheme under considerable pressure from central government, and I have not met a single fully qualified provider in first schools or nurseries, whether LEA or private, who is in favour of the scheme.

    It seems to me that this is another poll-tax situation, and when it hits the whole country in 1997, the marches will start".
Those are the words not of a Labour politician but of a principal of a private nursery school, and they may very well be prophetic.

I cannot put it better than Jade Mellor, from Brentford aged seven-and-a-half years who wrote:

    "Dear Lord Morris we don't want Nursery School vouchers. We want our school to be free from vouchers. Can you stop this?"
I wish I could, Jade, I wish I could.

Nationwide there is nothing but opposition to this Bill. Let there be no doubt, it is going to be deeply disruptive and divisive. And let it be constantly remembered that existing pre-school provision is mostly satisfactory and frequently excellent: 93 per cent. of all

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four year-olds in England are receiving some kind of pre-school education. Something like 78 per cent. are in infant classes; 10 per cent. are in maintained nursery schools, and 4 per cent. in independent schools. Yet all this has to be turned upside down, £20 million is to be spent on unnecessary bureaucracy, with no guarantee and small likelihood that at the end of it all the education available will be one whit the better.

When the Labour Party is elected to government, we shall honour any existing vouchers, but we shall issue no more of them. We shall develop what we inherit.

For the regrettable but unavoidable present we must deal with this imperfect Bill as best we can. The Bill requires major improvements in at least four specific respects. First, no payment should be made to any establishment which has not received proper approval by an inspector before the first voucher-bearing parents entrust their children to its care. New nurseries, with potentially unqualified staff, could operate for a year without ever being inspected--and could continue to operate for a further year after a poor inspection report before validation would be withdrawn. What damage could be achieved by cowboy operators in two years!

Secondly, adequate funding must be made available for children with special needs being educated outside maintained schools. That is essential. We shall want a great deal of reassurance that the Government are prepared to deal with that and to put it, if necessary, on the face of the Bill.

Thirdly, if the Government are serious about parental choice, they must allow the right to opt-out in cases where parents, teachers and the local education authority demonstrate their desire to be spared from an unnecessary bureaucratic nightmare.

Fourthly, Parliament must be allowed proper scrutiny. Ideally, this should be by means of affirmative instruments. However, any sort of regulation would be an improvement upon the "arrangements" through which the Secretary of State would administer the bulk of the main provisions of the scheme.

The Bill also makes provision for grant-maintained schools to borrow. This is a minor aspect of the Bill, but its poor drafting leaves some dangerous holes. As usual, Ministers in another place waved those concerns aside with airy assurances that everything will be all right and Parliament needn't worry its pretty little head about things like that.

We shall seek to remedy those deficiencies by requiring schools to be able to repay both principal and interest without recourse to additional grant from the Funding Agency for Schools, and by ensuring that borrowing may not be secured against schools' core fixed assets. Assurance from Ministers that core assets will be safeguarded through guidance in the form of a remit letter to the Funding Agency for Schools is, unfortunately, simply not enough.

This legislation would be inequitable in denying the rightful return of assets or the proceeds of their sale to an LEA which originally provided them. Ministers must not pretend that grant-maintained schools are the "goodies" and that education authorities are the rapacious "baddies". Assets provided by an LEA have

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been provided by all of the parents--and others--resident in the authority's area. If the Minister remains obdurate on this point, I shall seriously consider fencing off a portion of his garden, selling it and pocketing the proceeds. I would expect him to meet my actions with a benevolent smile.

The space in the parliamentary timetable which is being wasted by this Bill should instead have been used to put in place a clear commitment to expanding nursery education for every three or four year-old in England and Wales. Instead, we have this pathetic, bureaucratic nightmare which no one wants, based on a worthless Monopoly banknote.

I speak strongly, because I feel deeply. This Bill will do nothing to improve our children's education, and may well weaken it; and we here bear a heavy responsibility as Peers of the realm whose duty and privilege it is to legislate for those children--and above all, as parents or grandparents ourselves, because I read in the Sermon on the Mount:

    "what man is there of you, whom if his son ask bread, will he give him a stone?"

4.7 p.m.

Lord Tope: My Lords, like the Minister earlier, I am not sure whether my interest is declarable, but I wish to declare it anyway. I am today celebrating 10 years as leader of the London Borough of Sutton, which is an LEA and therefore has considerable interest in the proposals.

I have a further interest in that role because one of our priorities when we came into office 10 years ago was to expand nursery provision in our borough. Back in 1986 we had seven nursery classes in our primary schools. Some years later, as a result of the first phase of our programme, we now have a nursery class in every infant or primary school and every four year-old in our borough may have a nursery place if the parents want it. The sadness for us is that that was intended to be only phase 1; phase 2 was to go further and better extend the provision for three year-olds. Sadly, circumstances beyond our control have made phase 2 a little more distant than we would wish.

I must also declare another interest. My wife is an infant school teacher--for many years, although not currently, in a reception class--so I hear about these matters at home as well as in the council offices.

It is also 18 months to the day, I think, since I made my maiden speech in your Lordships' House. I chose specifically to speak about nursery education and early-years education on that occasion. I did so not only because it is an important priority for me personally, but because it is an important priority for my party. It is well known that my party has a commitment, funded through taxation if necessary, to increase resources for education. The top priority within that additional commitment is the funding of early-years education properly linked to provision for care. At the time of my maiden speech I welcomed the Prime Minister's then recent commitment at his party conference to the provision of pre-school education for all four year-olds

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whose parents wanted it. I was a little cynical about what that might mean. Indeed, I could not forbear to mention that his predecessor had made the same commitment 22 years earlier.

I readily accept that all noble Lords taking part in the debate today recognise the importance of good quality early-years learning. It is something that all of us want to achieve, and it is a common aim. I suspect that, sometimes against our better judgment, we would probably all accept as an ideal and aim the following quotation from the briefing of the National Union of Teachers:

    "Nursery education should mean high quality teaching from properly trained and qualified teachers, in high standard premises with first-class facilities and equipment. Ideally it should be universally available, free of charge, to all 3 to 4 year olds".
I should like to add to that the need to link it to proper care provision. I suspect that that is an ideal shared by all noble Lords.

Therefore, the test of the Bill before us is how well, if at all, it moves us towards that aim. I believe that it fails on a number of grounds: first, it is immensely bureaucratic; secondly, it will do little or nothing to extend provision, and may very well damage existing provision; thirdly, it provides no funding for training; fourthly, it provides no funding for capital costs, equipment, premises and so on; and, fifthly, above all, it is very bad value for money. This view is shared by all organisations involved, be they political, voluntary and so on. It is a view that is also shared by a large number of members of the public. The noble Lord, Lord Morris, referred to a number of letters that he had received. I have a number of letters in my file, and other noble Lords will have a considerable number. It is unusual for your Lordships' House to receive quite so many letters from parents, teachers, heads and organisations who are concerned about the Bill. Some of the letters in the folder before me come from local authority areas which fall within the pilot scheme of phase one; that is, people who now speak from experience of the implementation of the scheme.

If reports are correct--I believe they are--even the Secretary of State herself had considerable reservations as to whether a voucher scheme was the best way to deliver increasingly good quality nursery provision. It appears that it is only the policy unit at No. 10 that still sticks to this ideological view. The noble Lord, Lord Morris, has already quoted the Conservative Education Association. I intended to do the same. That body expressed qualified acceptance of the scheme on the basis that, since the Government were determined to have it, then it had to be made to work. Like the noble Lord, Lord Morris, I remember others who said the same about the poll tax. That was a typical example of how the Government refused to listen to professionals, as well as people in the local authorities who knew about these matters, and insisted on going ahead with what turned out to be an exceptionally expensive disaster. The parallels are so exact that I despair that we are heading down exactly the same road today, although I hope that it will have less expensive and disastrous consequences, particularly for the children involved.

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I said that the proposals were unbelievably bureaucratic. I wonder whether your Lordships know exactly the process through which parents in the four pilot areas have to go. First, the Child Benefit Agency sends an application form to the parent, who completes it, assuming it has not been thrown into the bin along with all the other junk mail because the parent already believes that there is adequate provision. The parent then sends it to Capita, which is the commercial organisation that administers the scheme. Capita sends a voucher back to the parent. The parent gives that voucher to the school. The school gives it to the LEA, and the LEA sends it back to Capita. Capita confirms receipt to the DfEE. The DfEE then sends the money to the LEA, which it earlier removed from the LEA's budget, and the LEA passes the money back to the nursery provider. That process comes from a Government that tell us that they are committed to getting rid of red tape. It is small wonder that parents are baffled and do not understand the need for this complex and bureaucratic voucher system to provide for their four year-olds what so many of them already have by way of excellent provision, often in LEA schools. Why do they need this cumbersome procedure to retain what they already have?

In other parts of the country, when parents receive vouchers they will discover that there is nowhere to redeem them. The difficulty is that they will not find that out until after the general election. They will receive the voucher perhaps a few weeks before the general election but a few weeks after it they will find that it is worthless because there is simply no provision. Clearly, the one group who will benefit from this are those who already have private provision. I do not criticise them for it; I believe that it shows a commendable priority on their part. But I question whether that should be a priority for the proper use of scarce public money. Why do we place an extra burden on the Exchequer for no extra benefit?

Other concerns have been mentioned, principal among them being quality and the maintenance of standards. All four LEAs in the pilot scheme--by definition, those which must be most keen on it--have expressed the view that the quality outcomes stated by SCAA set lower standards than those already set by them. That is the view of those who pilot the scheme, not those who are opposed to it. There is no requirement on private providers to employ qualified teachers or provide adequate training, yet high levels of skill are needed here. If we are to maintain, let alone improve, quality no single factor is more important than high level training. I recognise that many voluntary and private providers provide an excellent standard of service. It is clear that they are among those who are most concerned about the effect of this Bill. Private and voluntary providers will not receive rigorous Ofsted-style inspections. As the noble Lord, Lord Morris, has said, they will receive no inspections at all before registration. They will be phased over a period of time and they will be allowed a further period of time to come up to standard.

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I understand that the Government intend to train 4,000 new nursery inspectors to augment the present number of qualified nursery inspectors, which I believe to be 27. That is very desirable, but is it achievable? How long will it take to achieve, and what will happen while it is being achieved? There will also be light-touch inspections, which I understand to mean one-day visits, not the usual three or four-day inspections. However well trained the inspectors may eventually be, I question how they can measure quality and standards on the basis of a one-day inspection.

I have already mentioned training for providers. That is extremely important. The value of the voucher will not cover the cost of training; nor will it cover the capital costs. If we are to see an expansion in provision the capital costs must come first: the cost of premises, the cost of equipment and so on.

The other major area of concern is special educational needs. I do not have time to do justice to that subject as I would wish. It is said that the voucher scheme is for all four year-olds. It is self-evident that the costs of providing good quality early-years learning for those with special needs must be greater, yet this is not recognised in the voucher scheme. The Government have made clear that no additional resources will be provided through the voucher scheme for those with special needs. If they are thinking about that again we welcome it, but we will need a good deal more reassurance than we have had so far.

LEA-maintained providers will have to comply with the code of practice, quite rightly, yet as I understand it private and voluntary providers will not. There seems to be no logic in that. It is not a level playing field and, above all, it is a matter of great concern to those whose children have special needs and are on such premises. A similar point can be made about funding that currently comes through Section 11 for those with English as a second language.

I said at the beginning that I believed early-years learning needed to be linked to care. That is a subject to which we will return. We believe that it should be linked to existing Children Act legislation. That is important, and I know that there is a proposal to that effect from the Children's Charities Consortium, which I wholly support.

My next and last point on nursery vouchers relates to evaluation. We have four pilot projects, although I gather they are now to be called "phase one" rather than pilots. There is no purpose in having pilot projects--that is what they are--unless we are to learn from the experience. It is vital, especially if we are in due course to pass a Bill which gives the Secretary of State such wide powers of arrangement, that Parliament should first have an opportunity to see a proper evaluation of the current pilot projects. I accept that it will take some years to have an in-depth, long-term evaluation, but we can have a short-term evaluation of the scheme as it is being implemented in those pilot areas. It is fundamental that that should be before Parliament before we allow the Secretary of State to go ahead and to impose on the rest of the country the mistakes from the pilot schemes and these proposals.

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It may well be that we are all wrong: the scheme may work perfectly or be made to work perfectly. We may be wrong; the Minister may be right. That is all the more reason for that to be demonstrated through a proper evaluation of the pilot scheme.

I wish to turn briefly to the other aspect of the Bill: that concerning grant-maintained schools. There is a real danger that with all the attention on nursery vouchers that aspect of the Bill will be overlooked. To some extent it has been overlooked. Although it is an important part of the Bill, it is a less important part.

In some respects it is a difficult issue for Liberal Democrats, because alone of the parties in this Parliament we would return grant-maintained schools to LEAs. All I wish to say at this stage is that it is easy to borrow money; it is much harder to repay money. Not enough attention is being paid in the Bill, or what we have heard about the arrangements, to the ability of schools to repay debts with which they burden themselves. Nor is it clear how surplus or core assets are to be defined. We shall need to return to that point in much more detail at a later stage. Suffice to say at this stage that, if enacted, this part of the Bill will make the present uneven playing field even more uneven than it is at present.

We have already referred to the widespread concern and even opposition that there is to these proposals. What has happened in the pilot areas has done nothing to persuade us to the contrary. The biggest offence of the Bill is that it is an enormous wasted opportunity to provide good quality nursery and early-years education for three and four year-olds--an objective we all share. The Bill fails comprehensively in that.

4.23 p.m.

The Lord Bishop of Ripon: My Lords, the importance of early years learning cannot be overestimated. However, it is sometimes not recognised that the crucial first educators are of course the parents. In continuing education they are crucial. I hope that nothing we say about the significance and importance of nursery education will detract from the key part that parents have to play. The Bill seems to put parents into the category of consumers--quite properly allowing them choice about where to go for their children's early education--but we need to see them also as educators themselves: parents and learning institutions working hand in hand with one another. That does not take away the enormous importance of nursery education. It is right that all children aged four and over, and younger children, should receive it. It is also clear that the present provision is variable and that present expansion is right.

The question is whether this is the right way. Noble Lords have already expressed hostility. I am aware of the many hostilities and hesitations that there are around. I, too, have received the huge amount of correspondence to which other noble Lords have referred. However, I felt it right in this debate not to depend on those letters. I thought that your Lordships

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might value something from a Church perspective, given that Church schools form such a substantial proportion of the state system.

I felt it right therefore to consult two dioceses which lie in areas where the pilot projects are occurring. One is the diocese of Norwich, in Norfolk, and one the diocese of Southwark in south London--one rural and one urban. Not surprisingly, some of their concerns overlap and some are markedly different.

It may be worth sharing with noble Lords something of the present strength of nursery provision in the rural areas of Norfolk, once again making the point that nearly 60 per cent. of the schools with fewer than 60 pupils in Norfolk are Church schools. I shall give some examples of the good practice that is already taking place. There is one high school cluster which has a nursery school with several locations, each village feeder school having provision which differs from school to school but which ranges from mother and toddler groups to full playgroups and nursery classes. In another school, a nursery trained early years teacher supervises a member of staff with a nursery nurse qualification who works full-time with a nursery class on the premises.

Many aided Church schools would like to do that, but they cannot persuade the DfEE to provide the necessary grant. I shall return to that matter in a moment. One school in Norfolk provides all-day child care for all children. It operates by means of a breakfast and an after-school club. During the school day a playgroup and a nursery operate in the same room. Many rural schools provide educational expertise and secretarial help to playgroups operating in their catchment area. They ensure that the voluntary carers can provide adequate activities and the natural links into the future school.

The chief lesson which the diocese of Norwich draws from that experience is that it is of paramount importance that any village with a school must be able to provide for its children locally. There may be different models by which that can be done, but it must be local provision. The difficulties which are already arising from the pilot scheme are that it is bureaucratic. I do not need to underline the point which has already been powerfully made. I could perhaps add one particular point, that in rural schools where there may be two teachers, the burden placed on the staff, in addition to their teaching responsibilities, is a considerable one. This diocese cannot understand why the money is not paid directly to schools or to the Funding Agency for Schools. The numbers in school are well known. Surely it would be a simple operation to short-circuit the paperchase and to provide the funds direct.

The diocese points out that in rural areas choice is difficult because the travel problems are serious, particularly when a carer is left at home because the one car has already been used. So the provision has to be local. The diocese also makes the point that those LEAs which are already high providers are most at risk, not least because of the difficulty in persuading parents to take up their voucher.

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I turn now to the Southwark anxieties. Again, it begins with the same point--that the scheme creates a complicated bureaucracy for parents and schools. It makes the additional point which one would expect from this urban, cosmopolitan area--there are considerable difficulties for bilingual parents, parents with literacy or learning difficulties, and for those who are refugees. There may be a variety of parents who have difficulty in applying for a voucher. Clearly, that is more likely to occur in inner city and disadvantaged areas. It is precisely in those areas that the need for pre-statutory age provision is the greatest.

They make the point that the planned withdrawal of requirements for standards of school premises, in terms of minimum teaching areas, may create a reduction in the quality of educational provision. They also make the point that schools will have no knowledge of exactly how many vouchers will come their way until the beginning of the year. They will not know their budgets in advance, and therefore there is bound to be an element of instability and uncertainty about funding.

Those are initial reflections, but they are specific and arise out of experience of the pilot projects. They underline the strong case for delaying implementation of the scheme until the pilots have been evaluated. I hope that we shall be able to return to that matter.

I wish to make two specific points in relation to Church schools. I drew attention to one of the points earlier, but perhaps I may enlarge upon it. It was the provision for capital grants for Church schools which wished to develop nursery facilities. At present those grants are available under Section 281 of the Education Act 1993. All government grants for aided school building works are paid under that section. They must provide not only for new nursery buildings but for all kinds of minor works, repairs, basic need provision, and so forth, for statutory school-aged pupils. Frequently LEAs are willing to support a nursery unit at an aided school but the school cannot obtain the necessary grant from the DfEE. The Bill provides for the Secretary of State to have broad powers to make arrangements for grants in respect of nursery education. Would it not be possible for those powers to include grants for capital funds for those Church-aided schools which wish to expand into that area?

I wish to make a brief point in relation to inspection, the importance of which has been emphasised. It is concerned with the denominational inspection. Church schools are anxious to ensure that as regards issues covered by Section 13 of the Education (Schools) Act 1992--that is, inspection of what is regarded as denominational, in particular inspection of spiritual, moral, social and cultural development--those inspecting an aided school will be able to include the nursery children in their report. I hope that that will be clarified during debates on the Bill.

I do not wish to say a great deal about grant-maintained borrowing powers. They appear in a much slimmer section of the Bill than we might have expected, and I congratulate the Government on listening to the Churches, dioceses and Church schools,

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which express their dismay about the fast-track arrangements. We are most grateful to the Government that they do not appear in the Bill.

I wish to make only one point about borrowing powers. The former voluntary schools which have now become grant maintained do not own their property. The school buildings are held by the trustees. Only the playing fields of such schools belong to the governing body. Will such schools be disadvantaged? If schools are to be expected to borrow in some way against their capital assets, will the Minister make it clear that the funding agency will not be taking account of powers to borrow when allocating grant? The Churches believe that if that were the case, those former voluntary schools would be at some disadvantage.

I have expressed my hesitations and anxieties about the Bill and I believe that delay in implementation is the right way forward.

4.34 p.m.

Lord Prys-Davies: My Lords, I fully support the arguments advanced by my noble friend Lord Morris and the noble Lord, Lord Tope. I also support and agree with the anxieties expressed by the right reverend Prelate the Bishop of Ripon. I speak mainly as a result of the avalanche of letters that I have received from parents, governors, teachers and organisations in Wales. They have expressed their strong opposition to the voucher scheme and I believe that those anxieties should be related in your Lordships' House.

The provision of full-time nursery education for four year-olds in Wales has been and continues to be very different from that in England. For many years, in some cases since the beginning of the century, the Welsh LEAs have recognised the crucial importance of pre-school education. In many parts of Wales they have already reached the Prime Minister's aim for nursery education for four year-olds and will soon exceed that aim. We are particularly proud of that record.

All that should have led to a different initiative on the part of the Welsh Office from that of the Department for Education and Employment which is proposed in the Bill. It is self-evident that in the context of nursery education the main need in Wales is to extend nursery provision to three year-olds. But we have been landed with this Bill which we say is unnecessary and inappropriate for our needs.

Moreover, we say that it is a Bill which could, in the longer term, be damaging in many ways to existing provisions. So great is the anxiety in Wales that the Select Committee on Welsh Affairs in another place considered it proper to set up an inquiry to consider the proposed voucher scheme and its likely impact. Its report, No. 186 of the Session 1995-96, was issued on 19th February. I cannot recall whether the Minister referred in his speech to that report but it is essential reading as regards the position in Wales.

Not surprisingly, the committee reported that there was consensus among all the groups and bodies involved that the Welsh local education authorities already provided an exemplary service for four

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year-olds. That emerges also from the evidence of the Welsh Office Minister, Mr. Rod Richards, who readily acknowledged that:

    "There has been an important and indeed a significant public sector investment in nursery education in Wales in the past and indeed more than in the rest of the United Kingdom. We have an excellent record".
Those words are to be found on page 3 of the report. At page 6 the Minister stated that nursery education,

    "actually is very, very high indeed".
I emphasise those words and believe that it is as clear a statement of approval of current provision as one could ask.

All the bodies which gave evidence to the Select Committee and all the Welsh voluntary organisations with a special interest in nursery education, apart from the Wales Pre-school Playgroups Association, are firmly opposed to the voucher scheme.

For informed and reliable guidance on children's issues in Wales I have learnt to look to the advice of Children in Wales. It is a body of high standing and is core funded by the Welsh Office. It is the equivalent of the English National Children's Bureau and Children in Scotland. That body expressed its general response to the Government's proposals in the following terms:

    "Whilst we welcome additional money being put in to the vital area of pre-school education and acknowledge that the scheme may lead to an expansion of provision for some four year-olds, we are dismayed at the choice of a voucher mechanism as a means of expanding pre-school education".
Those words are on page 72 of the report. It recommended that the Government should disapply the voucher scheme in Wales or, failing that, that they should postpone phase two until the evaluation of phase one could provide answers to the anxieties expressed.

Therefore, it is sufficient for me now to read the two principal conclusions of the Select Committee which are to be found in paragraphs 39 and 40. The first conclusion reads:

    "We regret that arrangements have not been made for a pilot scheme in Wales".
The second conclusion reads:

    "It is hard to believe that, if acting alone, the Welsh Office would have seen a voucher scheme as the most effective means of improving educational provision for four year-olds in Wales".

There is no reason at all for the voucher scheme to apply in Wales, except the one advanced by the Welsh Office Minister, Mr. Richards, and touched upon by the noble Lord, Lord Henley, this afternoon; namely, that it extends choice. But how relevant in the context of nursery education is the Minister's reasoning? The picture conjured up of Welsh parents desperately seeking choice of nursery education facilities for their four year-olds to avoid a reliance on the very good LEA services which are freely available strikes one as being quite unreal.

There are four other specific concerns that I should mention. I shall be brief. They are touched upon in the report of the Select Committee. First, there is deep regret that the new money, which is to be spent on nursery education, is not being spent in Wales on

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extending nursery provision to include three year-olds as the existing service for them is underdeveloped. Moreover, there is also the risk that the existing LEA facilities for three year-olds could be weakened in the longer term if there is a significant shift of four year-olds out of the maintained sector.

Secondly, the potential damage to small, rural primary schools is great. Because fewer four year-olds may henceforth go to the local school for their nursery education, the school itself may no longer be viable. The school may have to close. It is idle to think that closure does not matter. The whole rural community is worried about that prospect. The Welsh Office was closely questioned on that aspect by the Select Committee which produced a supplementary memorandum. After considering the evidence, the committee concluded in paragraph 22:

    "We remain concerned that the viability of small schools may be threatened by the voucher scheme".

Thirdly, the overall effect of a voucher scheme could be a grave threat to the continued expansion of Welsh-medium education in the voluntary sector and, in the longer term, to Welsh-medium primary schools. I should mention that about one in five of the population of Wales speaks Welsh. That is the fear of Mudiad Ysgolion Meithrin, the voluntary body which has for just over a quarter of a century played a very successful role in the promotion and provision of Welsh-medium nursery education. Its evidence to the Select Committee has the enormous corroborative support of the statutory Welsh Language Board which is, inter alia, the Secretary of State's advisory body on the Welsh language and which maintains a strategic overview of the provision of Welsh-medium education. The board advised the committee:

    "It is a cause of concern to the Board that the vouchers scheme could have a ruinous effect on services currently provided by Mudiad Ysgolion Meithrin".
That extract can be found on page 69 of the report.

Fourthly, and finally, nowhere is there any evidence that the Welsh Office has undertaken, commissioned or sponsored any research into the likely impact of the voucher scheme upon the existing provision of nursery education in Wales. The Welsh Office seems to have shirked that task, which is extraordinary behaviour on its part. It is also worrying. But if that is not true, and if the Welsh Office has undertaken such studies, I should be grateful if a copy thereof could be deposited in the Library of the House before we come to the Committee stage.

I have sought to set out some valid reasons why the Welsh Office should opt out of the scheme. Of course, I appreciate that the noble Lord, Lord Henley, who is to reply to the debate, is not a Welsh Office Minister, but I should be grateful--as, indeed, would many people in Wales--if he would convey to the Secretary of State for Wales the message that the voucher scheme should not apply in Wales until it has been preceded by a pilot scheme in Wales as urged by the Welsh Language Board, Children in Wales, Mudiad Ysgolion Meithrin and the Select Committee on Welsh Affairs in another place; and until the pilot scheme has established that the consequences of the proposed voucher scheme are not

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likely to weaken or damage existing provisions. Can we expect that small but reasonable concession from Ministers?

4.45 p.m.

Lord Walton of Detchant: My Lords, even though the debate has begun earlier than anticipated, perhaps I may at the outset apologise to the Minister and to the House for the fact that, because of a longstanding evening engagement, I may have to leave before the end of this afternoon's debate. While doing so, perhaps I may also record the sincere apologies of my noble friend Lord Baldwin who had very much hoped to be able to contribute to our debate today.

As many of your Lordships will be aware, I have had the privilege for some time of chairing the Hamlyn Foundation National Commission on Education. In 1993 we produced a comprehensive report entitled Learning to Succeed, based upon more than two years of detailed study and analysis of Britain's education system. We made a series of recommendations upon what we saw as being necessary to bring education and training in the UK up to a proper international standard. Subsequently, upon assessing developments occurring after the publication of our full report, we followed up our original recommendations by publishing in 1995 a booklet entitled Learning to Succeed: The Way Ahead.

Although the commission is no longer formally in existence, we nevertheless continue to keep a watching brief on developments in education through the work of a small steering group. I can, I believe, speak with authority on behalf of my former colleagues on the commission and on behalf of those in the steering group in saying that one of the principal recommendations that we made in 1993, and which we reiterated last year, related to the crucial importance of nursery education, and that is the part of the Bill upon which I wish to comment today.

The investigations that we carried out confirmed, as the Minister agreed in his lucid introduction, that research carried out in the USA and in the UK has shown that good quality nursery education has long-lasting educational and social benefits. The Headstart and High Scope programmes in the United States showed that, when this was provided to an adequate standard, children learnt and developed more quickly once they entered primary school; that they also demonstrated much less in the way of behaviour disorders and criminal behaviour in later life; and they also achieved much higher educational standards than those who had not experienced such education. As the National Campaign for Nursery Education has commented, one group of American workers concluded that for every dollar spent on early learning programmes, seven dollars would be saved later through the reduction of educational and social difficulties.

Research carried out in my former university of Newcastle-upon-Tyne compared children receiving high quality nursery education with those attending playgroups and those attending neither. This showed that the first group forged ahead in primary school. Those attending playgroups did a little better than the

20 May 1996 : Column 684

controls but not nearly as well as those receiving good nursery education. Hence money spent on early pre-school education can be seen to be an excellent investment in any nation's future. We on the national commission were therefore much encouraged to read that in December 1993 the Prime Minister, John Major, stated that ultimately he wished to see every three and four year-old child have access to a nursery education place.

However, it has been unclear since that date as to what perception many members of the public, and indeed some of those in government, hold about its nature and content. While such education clearly involves a component of childcare, and while it is clear that for three year-olds certainly, and usually for four year-olds, trained nursery teachers should be supported in appropriate nursery schools by a nursery nurse, childcare facilities alone do not necessarily provide the educational experience required for the best nursery education. Equally, the teaching of children in these early years is a specialised task which not all teachers trained for primary education possess, and which requires appropriate skills and experience.

It is equally important to stress that early admission to primary schools or to reception classes for four year-olds, while of some benefit can never be an adequate substitute for properly planned nursery education. This needs to be provided in separate buildings, or at least in self-contained premises within primary schools--premises which are available for the sole use of nursery children. The curriculum requires knowledge and understanding of the developmental needs of children, including the factors and interactions which foster and inhibit development.

The Pre-School Learning Alliance, Professors Christine Pascal, Kathy Sylva and others, have done much excellent work in defining early learning curriculum content which lays the foundation for the more formal curriculum of compulsory education which follows. I have also been much impressed by the features of high quality nursery education described in the leaflet provided by the national campaign.

It follows that the essential features of good nursery education are, first, dedicated premises which may, as I have said, be in nursery classes in primary schools--but these must be properly housed and defined--and well trained staff. Much has been achieved over the past 10 years and some local authorities have produced an admirable programme of good quality nursery education not just for four year-olds but in some cases for three year-olds as well. However, the provision has been remarkably uneven across the United Kingdom. Some local authorities provide such education for not more than 20 per cent., and some for almost 90 per cent. of four year-old children, and a much lower percentage of three year-olds. There is of course some excellent provision, as well as some which is mediocre, in the independent sector.

The case therefore for nursery education is now incontrovertible. I urge your Lordships, as the noble Lord, Lord Morris, has said, to note the present position in France, as discussed in a Franco-British Council

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symposium in April this year. Some 10 per cent. of the French budget for education in schools--compared with 4 per cent. in the UK--is spent on this sector and whole-time provision for four and three year-olds is virtually universal. I commend to your Lordships the article by Patricia Rowan in the Times Educational Supplement of 26th April.

But will the Government's voucher scheme produce the results we would all hope to see? Frankly, I must say with regret that I doubt it. What, then, are my principal concerns? The first must surely relate to the take-up of the vouchers. Is there not a strong probability that middle-class parents will apply for them avidly, including even some who may already be paying for private nursery education? Is it likely that in inner city areas in particular, but also in rural areas, less affluent and underprivileged families will seek these vouchers? In other words, will they really benefit families and children most in need? Plainly there is little chance that voucher funding will be enough to refurbish old buildings or to build new. Indeed many authorities have calculated that the vouchers could provide much less per child than they at present spend on publicly-funded high quality nursery education. Why have regulations relating to basic standards of space, light, hygiene and safety been withdrawn with the consequential risk that some may attempt to offer such education in totally inappropriate premises in the hope of attracting voucher support?

While the principle of parental choice is one that I am sure we must all commend, I cannot help but feel that targeted funding provided through local authorities and through the grant-maintained schools system, directed to the areas of greatest need, and especially where existing provision is poor, would have been a much more sensible way of funding the developments that we would all wish to see spread evenly across the United Kingdom. Of course the specific problem of young children with special educational needs must not be overlooked. I must also express serious concern about the availability of properly qualified teachers and the proposals relating to inspection. One cannot but suspect that some of the vouchers will be used to purchase places in childcare facilities which may be satisfactory in a caring sense but which will provide no significant educational experience upon which primary education can subsequently build. The proposals relating to inspection and accreditation of institutions do not at present persuade me either that inspectors with appropriate training and expertise will be available, or indeed that the frequency and quality of the inspections will be adequate to ensure that appropriate education is provided.

I could elaborate much further but my purpose in contributing to this debate is not, I hope, to be hypercritical but to express some of the concerns which have been brought to my attention by many of those working in education and especially in the nursery sector. There are real fears that those local authorities which already provide excellent nursery education will find their provision lessened or impaired as a consequence of the voucher scheme. Indeed, existing

20 May 1996 : Column 686

funding which they devote to four year-olds is being withdrawn and put into vouchers. The Government assure us--as the Minister has done this afternoon--that there will be substantial new money; that existing expenditure on three year-olds will be unaffected; and that vouchers will restore to local authorities the money they are losing. But will this prove to be the case in practice? Such evidence as has emerged to date about the take-up of the pilot or phase one scheme in four boroughs is not, I fear, encouraging. The Minister may well, of course, have more up-to-date figures, but I have been informed that the take-up so far is only around 60 per cent. in the four phase one local education authorities.

If parents do not produce a voucher, they are unable to find a place for their child or children, and existing institutions receiving few vouchers will suffer. As others have said already this afternoon, it is surely crucial that a full and detailed evaluation of the pilot scheme in phase one should be undertaken before vouchers are extended more widely across the country next year. The Government must tell us what has been the take-up of the vouchers. What effect has the scheme had upon existing nursery education? What evidence has emerged to indicate that such provision of high quality has been extended in the areas under study? What form of inspection of new establishments has been undertaken and what have been the results? What evidence, if any, has been obtained relating to the take-up of vouchers by those families patently most in need? Finally, we shall wish to know what has been the feedback from parents on the value of the scheme to date. Many other questions could be posed but those are some which I trust the Minister will be able to answer at the end of this debate. If I am compelled to leave early, I shall read carefully his response.

5 p.m.

Lord Dormand of Easington: My Lords, it is of considerable significance that in the half a dozen speeches in the debate so far there has been considerable repetition. I shall repeat some facts; and I have no doubt that some of my noble friends will do so. There is nothing wrong with that for two reasons. First, it serves to emphasise the points made; and, perhaps more importantly, it serves to emphasise a fact that the Government should realise: that there are glaring gaps and mistakes in the Bill.

Speaking on the Bill in another place on 19th March, the Secretary of State for Education and Employment said that the Bill,

    "will ... deliver choice to parents who want to give their four year-olds the best possible start in life".--[Official Report, Commons, 19/3/96; col. 264.]
That sentence had a familiar ring. It required only a few moments' thought to remember that a previous Secretary of State, the noble Baroness, Lady Thatcher, said much the same thing in stronger terms. However, it is about 17 years since that was first said.

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