Nursery sweetener for opt-out schools

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Opted-out primary schools are being offered millions of pounds to build new nursery units, allowing them to take advantage of income from the Government's controversial nursery-voucher scheme.

Revelations that the quango which funds grant-maintained schools will set aside pounds 5m from its capital fund over two years for nursery building were yesterday condemned as "scandalous" by Margaret Hodge, Labour's nursery- education spokeswoman. The Government was permitting "sweeteners" to be made available to those schools which had opted out of local-authority control but not to private and voluntary-sector playgroups, she said.

The move by the Funding Agency for Schools (FAS) will add to concerns that John Major's flagship nursery-voucher scheme is not working as ministers hoped.

A report by the cross-party education and employment select committee, leaked last week to The Independent and published officially yesterday, found no evidence that the scheme was fulfilling its key aim of extending parental choice of nursery provision. Under the scheme, launching nationwide on 1 April after a pilot year, each four-year-old receives a voucher worth pounds 1,100.

Some private and voluntary playgroups were at risk of closure as state schools anxious to safeguard pupil numbers and funding recruited four- year-olds in reception classes, the report said. A key complaint by playgroups over the scheme was the lack of capital available to allow them to add buildings and expand provision. However, following inquiries by the select committee, the Department for Education and Employment denied lack of capital would be a barrier to expansion in all cases, since many playgroups operated in leased or rented buildings. It added that the voucher included a notional amount to contribute towards capital.

The FAS, which is allocating part of its capital fund for nursery schemes for the first time, is inviting opted-out schools who wish to build nursery units to submit funding bids for 1997-1998. Of 486 grant-maintained (GM) primary schools in England, fewer than 100 have put in bids so far.

The Local Government Association claimed the move was "another example of the inequitable funding set up under the GM regime". Julia Bennett, the principal policy officer said: "This policy of only targeting one sector shows the voucher scheme is not working properly."

A spokesman for the FAS said the nursery-capital pot would include no extra government money. He added: "This is just the way we have chosen to set up our capital strategy. If local authorities choose to do the same then those opportunities will be available to their schools."

Inspection teams which monitor standards on behalf of independent schools may fail to reveal underachievement among pupils, according to two reports published yesterday by the Government's schools inspectorate, Ofsted. The reports examine the inspections systems used by the five major independent school associations and cover more than 1,300 schools.