"The Government should move swiftly to freeze all council spending on primary schools' under-fives provision. Existing classes should be phased out, perhaps over a three-year period," it says.
The proposal for universal provision aims to make top-quality pre-school centres, providing full-time education and care, affordable for all parents of three and four-year-olds who want it. Under the plan, poor parents would be offered vouchers for Pounds 5,000 (the full cost), those in the 25 per cent income tax bracket would get Pounds 3,000 (60 per cent of the cost) and top earners would get Pounds 1,000 (20 per cent). Parents would be able to choose cheaper provision, and receive vouchers for similar percentages.
The report's author, David Soskin, founder of the Asquith Court group of London pre-schools, says LEAs should be stopped from providing care and education for the under-fives.There is a conflict of interest, because they are both the providers and regulators, he says.
The annual cost, including parental contributions, would be up to Pounds 3.5 billion, plus capital costs of Pounds 7bn. The report estimates the cost to the state would be more than the Pounds 1bn quoted by many experts, but under Pounds 3.5bn.
"Pounds 1bn will not provide the dream solution that probably most working parents would seek if fees were not an issue. The Treasury must realise this at the outset," says the document. "On the other hand, high quality nursery education is an investment in the nation's infrastructure which provides many knock-on benefits."
The report, Pre-schools for All - A Market Solution, is the Adam Smith Institute's attempt to influence the Government as ministers struggle to figure out how to fulfil John Major's "cast-iron commitment" to make headway towards universal nursery provision during the current Parliament. Ministers are still said to be undecided about how to proceed.
The report calls for an audit of all state schools to see where unused space is available, and says private operators should be allowed to bid to run pre-schools in these places. Local authorities should be compelled to let out empty properties suitable for nursery use, such as boarded-up sports pavilions and redundant public buildings, it says.
It also calls for planning changes to make it easier for nursery schools to be established. A new, preferred land class could be created to give nursery schools a special status.
Mr Soskin calls for an inspectorate for the pre-school sector, which should run a comprehensive register of provision, approve and monitor all educational facilities for under-fives, and act as a conduit between LEAs and operators.
Madsen Pirie, director of the Adam Smith Institute, agreed that the proposals would be expensive, but said: "I think it would be a mistake for the Government to pick the cheapest form of child care . . . We want a springboard launch into a lifetime's learning experience."
Pre-School for All - A Market Solution, by David Soskin, from the Adam Smith Institute, Great Smith Street, London SW1P 3BL, Pounds 12.