Return of the milk snatchers? Government accused of targeting under-fives for cuts

Campaigners warn that any cap on costs might leave providers unable to afford to maintain scheme

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Children under five could miss out on free milk provision as a result of a government review of the scheme, pre-school providers and opposition MPs are warning.

The Public Health minister, Anne Milton, announced a review of the cost of providing the scheme yesterday. But the Department of Health insisted the review was only a question of improving delivery and that free milk for the under-fives would be safeguarded.

However, campaigners warned that restrictions on the cost might leave some providers unable to afford it.

The shadow Public Health minister, Diane Abbott, warned: "Trying to cut the cost of this scheme may end up snatching milk away from the country's children – disproportionately affecting the poorest." The row could revive the controversies of the 1970s when Margaret Thatcher was dubbed "milk snatcher" after abolishing free milk for older primary schoolchildren.

According to the Department of Health, the cost of providing free milk for the under-fives has jumped from £27m in 2007 to £53m last year.

It said that under the current scheme, where providers are reimbursed for the milk, the cost had risen to up to 92p per pint – whereas the average cost of a pint was 45p. This has prompted claims that some milk providers are "profiteering" from the scheme.

The Government is suggesting three alternative ways of financing the scheme:

* Putting a cap on the maximum that can be claimed for a pint of milk.

* Issuing an e-voucher which providers can use to shop around for their milk.

* Introducing a government contract with an external provider to supply all childcare providers.

"We are committed to continuing to provide free milk for all under-fives," said Ms Milton.

"But the current scheme has not changed operationally since it began [in the 1940s] and costs have ballooned."

However, the School and Nursery Milk Alliance warned that children across the country could be "severely disadvantaged" by the review – and doubted whether a cap or e-voucher would meet the full cost of the scheme.

Jon Thornes, interim chairman of the alliance, said: "We're concerned that pre-schools won't be able to afford it. I see in the consultation document that one suggestion is the cap should be at 25p. Where in the country can you buy milk for that?"

Neil Leitch, chief executive of the Pre-School Learning Alliance, said he was pleased the Government was looking at ways of improving the scheme "as not so long ago it considered withdrawing it altogether".

He added: "We are disappointed that some milk providers are abusing the system. While we don't condone profiteering, we are far from convinced that a single provider is the answer."