Watchdog chews over nursery vouchers

26th January 1996 at 00:00
Co-operation between private, voluntary and state nurseries and playgroups could collapse when the voucher scheme for four-year-olds is implemented nationwide next year, warns the Government's official watchdog in a report published today.

The Audit Commission report warns that a more "volatile" market with intense competition to fill places could lead to schools switching their spending to nursery and reception classes to fend off rivals.

It also warns that local education authorities could face financial cuts and uncertainty with the introduction of vouchers and urges the introduction of stringent procedures to protect the scheme from fraud.

The report has been seized on by Opposition and local authority leaders. Labour education spokesman David Blunkett said the Commission's findings showed the scheme would "threaten existing provision and existing partnerships between local education authorities and voluntary and private providers". Alan Parker, education officer for the Association of Metropolitan Authorities, said the report confirmed councils' belief that vouchers would jeopardise co-operation between providers.

Although there is no direct criticism of the Government in the report, it paints a bleak picture of the kind of mish-mash of under-fives services which early-years experts have long lamented when calling for a national policy.

But its clearest message is a warning of the implications of the introduction of vouchers. "Some schools may feel pressure to spend more in their nursery classes to compete with private nurseries. Others may feel compelled to spend more on their reception classes, to secure the enrolment of pupils who will then stay for the rest of their primary schooling," says the report. "Crystal-ball gazing cannot predict the outcomes. But if parents' choices become more volatile or competition more intense, some authorities may be exposed to greater financial uncertainty."

It goes on: "The level of support an authority offers [voluntary and private pre-schools] may depend on the success of its schools in retaining and attracting four-year-olds. Because support for the private and voluntary sectors is non-statutory, it could be vulnerable to cuts if there is a shortfall in the voucher income for four-year-olds. It is possible that some local authorities will react defensively and concentrate attention on their own schools . . . that private and voluntary providers will lose some of their interest in co-operation with local authorities."

Local authorities support voluntary and private pre-schools through grants, the provision of authority premises at low rents, and payment of some children's fees. The commission also warns that more will be at stake than just voucher funds when local authorities are forced to compete with new grant-maintained nursery classes.

Funds for all the running costs of GM schools are deducted from the Government's revenue support grant to councils, the source both of any funding for three-year-olds and of funding for four-year-olds above the level covered by the vouchers.

"So the opening of new nursery classes in grant-maintained schools will draw central Government funds away from local authority education in ways which private sector competitors cannot," says the report. "Since there is no basis for estimating the number of new grant-maintained nursery classes, the consequent reduction in total local authority funding cannot be estimated either."

Despite its concerns, however, the commission believes that in some circumstances vouchers could lend added impetus to local authority co-operation with the private and voluntary sectors. For example, they will make it easier for authorities to subsidise fees. It makes recommendations on how LEAs can co-operate with private and voluntary pre-schools.

For example, councils can supply premises or revenue support or both. Or they can use existing private and voluntary places to ensure a wide range of services.

If all sectors could manage to co-operate, councils may be able to reduce the financial risk which vouchers create, says the report.

Last Friday Heather Du Quesnay, president of the Society of Education Officers, warned that vouchers would only work if all the sectors pitched in together to get the best out of the existing system and inject extra resources into the new one.

She said many authorities would implement vouchers because children's needs were always paramount, but other education officers at the Harrogate conference believed vouchers could be defeated if education authorities were united in their opposition.

For example, councils can supply premises or revenue support or both. Or they can use existing private and voluntary places to ensure a wide range of services.

If all sectors could manage to co-operate, councils may be able to reduce the financial risk which vouchers create, says the report.

Last Friday Heather Du Quesnay, president of the Society of Education Officers, warned that vouchers would only work if all the sectors pitched in together to get the best out of the existing system and inject extra resources into the new one.

She said many authorities would implement vouchers because children's needs were always paramount, but other education officers at the Harrogate conference believed vouchers could be defeated if education authorities were united in their opposition.

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