SOUTH AYRSHIRE, which blazed a controversial trail for handing out vouchers instead of cheques to buy footwear and clothing, has become the third authority to abandon the scheme.

The decision was commercial rather than ideological as the council became a victim of the market after Littlewoods, its sole supplier, ceased dealing in children’s clothing.

Councillors in the Labour-run administration decided not to seek alternative outlets since vouchers that could be redeemed at a number of stores would not achieve the same saving as bulk purchases from one source.

The decision to place all the business with one supplier had already run into criticism from parents - making it possibly the only education voucher scheme to be condemned for limiting choice.

Parents did, however, appreciate the pound;50 voucher and South Ayrshire will retain its value when the former system of cash payments is reintroduced. The council has issued allowances to 5,050 pupils so far this year, a third of the school population. This compares with 4,600 when vouchers were approved three years ago.

The scheme cost the council pound;214,700 last year and it will have to fork out an extra pound;50,000 to foot the new bill, which is pound;30,000 more than when vouchers were introduced.

Mike McCabe, South Ayrshire’s director of education, said: “The scheme was helpful while it lasted. But if we don’t have a large supplier able to offer us significant discounts there is not much we can do about it. If we were a council in a large urban area we would have had some choice.”

Mr McCabe described the move three years ago as “the acceptable face of education vouchers”. In addition to saving money, vouchers were meant to remove the stigma attached to clothing grants and to ensure the money was spent as intended.

Edinburgh, Fife, Orkney, Renfrewshire, Scottish Borders and South Lanarkshire all followed South Ayrshire’s example as they struggled to contain a “demand-led” area of expenditure. But Renfrewshire, also tied to Littlewoods, and South Lanarkshire pulled out. Fife offers the option of Giro cheques.

Brian Monteith, the Scottish Tories’ education spokesman and a long-standing supporter of vouchers in education, said he would like to see the principle extended further to phase out clothing grants altogether. “But this will require greater acceptance by local suppliers,” Mr Monteith said. “Where vouchers have failed it has been because of the restrictions placed on them.”

All authorities, however, faced criticism from parents and councillors that vouchers restricted choice, particularly for families in rural areas who were forced to travel to the selected supplier.

Edinburgh aimed for a 10 per cent saving on its pound;550,000 grant payments although it was criticised for signing an exclusive deal with Marks and Spencer. The council now intends to open up to other stores from next session.

At one stage, it looked as though there might be steady if unspectacular pickings for retail businesses as more and more councils put welfare payments out to tender. Three years ago local authority expenditure on footwear and clothing grants soared to pound;11 million as more and more households crossed the poverty threshold.

But North Ayrshire reported last year “an emerging trend that the level of discount being offered by companies for this service is being reduced . . . it is evident that certain companies, who would traditionally have been expected to be involved in such schemes, have elected not to participate”.