Margaret Hodge, minister for employment and equal opportunities, said the money would go to further education colleges and external institutions to provide services for pre-school children. This follows the Pounds 5 million which was allocated to colleges in 1998-99 to create 10,000 new out-of-school childcare places.

Speaking at the Daycare Trust annual conference, Mrs Hodge said: “The key to the national childcare strategy is to provide good quality childcare for children and their families. That is why we are doing everything we can to raise the quality and standards of childcare services, and the skills and competence of people working in the profession.

“We are investing in more training to increase the number of well-qualified people, with a total of Pounds 11 million for Training and Enterprise Councils in this year and next, and a new Standards Fund for training early years staff this year.” In addition, an Early Years National Training Organisation has been established to take forward standards and training for the sector.