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Lunch firm dines out on nursery idea

Biddy Passmore on Luncheon Vouchers' scheme to help John Major fulfil his pledge to the nation's four-year-olds. Vouchers for nursery education could be offered to parents using the information stored on the Child Benefit computer in Newcastle.

Under a proposed scheme by a private voucher company, vouchers would be numbered and restricted to a particular child and parent to avoid fraud. The parent could telephone a central register to find out about local nurseries or playgroups, take the voucher along and the school or playgroup would then send it to the operating company for reimbursement.

As costs vary wildly, depending on area and on the service used, the company would have to be able to pay back varying amounts. A playgroup in Newcastle, for instance, would not get the same amount of money as a nursery school in Kent.

The proposals are set out in a submission to the Department for Education from a company called Childcare Vouchers, a subsidiary of Luncheon Vouchers. It operates a scheme for 150 employers who give their workers vouchers averaging Pounds 30 to Pounds 35 a week to help with child-care bills.

The company wrote to the department when it learnt that vouchers were under consideration for nursery education. At a subsequent meeting with officials, company representatives were invited to submit proposals for administering a scheme based on vouchers worth Pounds 1,000.

Childcare Vouchers said a computerised operation would cost about Pounds 2 million a year, or Pounds 3 per child. The company would advertise the scheme with a national mail-shot inviting eligible parents to apply. Parents would receive nine vouchers a year - three a term - giving dissatisfied parents the flexibility to switch schools or playgroups.

Childcare Vouchers pointed out that, using the information stored on computer, it would also be able to tell parents about the facilities available in their area - as it now does for workers in the companies in its scheme. Deciding which facilities were up to standard and therefore eligible to receive vouchers would be up to the Government.

How was the Childcare Vouchers scheme received by the Department for Education? "They were very polite and tight-lipped," said Stephen Stanbury, general manager, "and said vouchers were still being considered among a range of other options."

In fact, plans for fulfilling the Prime Minister's pledge to start expanding nursery services for four-year-olds by the next general election seem still to be in total confusion. The Education Secretary's preferred option of a bidding system for expanding the number of places combined with pilot voucher schemes in perhaps a dozen areas seems to have run into trouble with her Cabinet colleagues.

Her right-wing colleagues suspect that the suggestion of pilot schemes is in fact meant to kill off vouchers. They and Treasury ministers are also dismayed at the proposed cost of the expansion scheme, under which local authorities and private and voluntary groups would compete for about Pounds 300m over the next three years to provide places for an extra 135,000 four-year-olds.

The Treasury has already made it plain that it will resist Mrs Shephard's separate bid for an extra Pounds 1 billion for schools to pay the next teachers' pay award in full and soothe ruffled parental feathers before the next election.

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