Private nurseries to get state aid

Private nurseries and playgroups will receive state funding to offer places to four- year-olds under plans to be announced this week.

The Government hopes the proposals will help it to fulfil its promise to abolish the Tories' nursery voucher scheme. Although details of the plan are still being finalised, it is bound to cause anger in some local authorities which had hoped to regain control of the funding and planning of pre-school education. It will, however, be welcomed by the private and voluntary sectors.

Since 1 April, parents of all four-year-olds have been entitled to vouchers worth pounds 1,100 per year for pre-school education for their children, which they could spend in a state or private school or in a playgroup. Labour has always argued that the scheme was too bureaucratic and that it should be abolished. Ministers want to see the programme replaced by September, but they face a tight schedule to put their own plans into place by then. The scheme will remain in place until March 1998 in Wales and August 1998 in Scotland, but this is unlikely to happen in England.

Each area will be expected to draw up plans showing how it can provide a place for every four-year-old, though it is thought unlikely that this will be left entirely up to local authorities. Instead, government guidance could insist that private schools and playgroups be given places on nursery forums which would bid for funds for each area. This, it is hoped, would ensure that they featured strongly in the proposals.

One of the problems the Government faces is preventing authorities from using their greater muscle to win the lion's share of funding for themselves. Under the voucher scheme, local authority schools were accused of cramming four- year-olds into their reception classes to get the extra cash which followed them.

Conversely, authorities which have always funded nursery education fear they could lose out because a larger share of the cash could go to those with very few under-fives in education.

Labour's nursery education policy, published last November, said that public-private partnerships would be set up to ensure the planning and provision of nursery places. However, the extent to which the private and voluntary sectors will be involved has never before been made clear. Party sources had talked about using partnerships with business to help build new nursery centres, but had not specified that a Labour government would fund places for children in private schools.

Last night a party source said ministers hoped to build on suggestions made by its nursery education task force last year.

Margaret Lochrie, administrator of the Pre-School Learning Alliance, formerly known as the playgroups' association, welcomed the news that its members would not automatically lose the funding they had gained from vouchers, but said there was "a certain amount of worry" about the changes.