A child of four could see the problems

At long last the right has got a voucher scheme off the ground. But will it work?

With characteristic skill, Gillian Shephard, the Secretary of State for Education, announced nursery vouchers for four-year-olds as though it was the scheme she had always wanted. In fact she fought a long battle to avoid introducing vouchers but was finally overpowered by the might of the Downing Street think tank and the Prime Minister.

Mrs Shephard argued that vouchers were unwieldy and bureaucratic, but the clear attraction of the scheme to Conservative supporters may have won her over. For middle-class parents of four-year-olds, the news that the Government is to offer parents pounds 1,100 vouchers is unadulterated good news: those who at present pay the full cost of places at playgroups and private nurseries will receive a subsidy.

In his determination to push through a voucher scheme, the Prime Minister has overturned Treasury objections to giving money to those who are already paying for nursery education. Instead Mr Major has bowed to the arguments of the Downing Street policy unit, which favours vouchers. The appeal of vouchers, it told him, is that they expand parental freedom of choice. State nursery education may have less flexibility than the private sector in terms of the curriculum and teaching styles, the unit argued, and its hours may not be long enough for working parents.

But it remains to be seen whether the Prime Minister's instinct will be proved correct. While some poor families will benefit, the advantages for them will be limited because they may lack the means to pay top-up fees which will be charged by private nurseries. Playgroups and the part- time nursery education for which the vouchers will pay may also fail to match these parents' working hours or be beyond the capabilities of families under pressure. When the London borough of Wandsworth introduced nursery education for all and closed day nurseries which offer all-day care, single Afro-Caribbean parents dropped out.

The Government could have chosen a means-tested voucher scheme under which those who could afford to pay receive nothing while the poor receive the full cost of a place. Instead it chose a scheme which builds in privilege. Well-off families will be able to top up their vouchers and use them for private nursery places which cost pounds 3,000 a year or more.

However, the significance of the announcement should not be exaggerated. While Mrs Shephard believes 150,000 nursery places are needed to cater for all four-year-olds, figures obtained by Labour from the Government show the shortfall to be much lower. The Opposition believes 90 per cent of the 645,000 four year-olds in England and Wales are already in some form of pre-school provision.

The true picture is almost impossible to judge: with 200,000 four-year- olds in playgroups, 120,000 in private nurseries and 512,000 at state nursery schools, many children must attend more than one form of provision. But whatever the truth, Mrs Shephard's scheme may reach few parts already untouched by the current system.

Her plan also does nothing for three-year-olds, 45 per cent of whom receive no pre-school education. Research carried out in America showed that good early learning not only increased children's educational chances but also reduced levels of delinquency in later life. In fact the voucher scheme may even deprive three-year-olds of places, as parents of four-year-olds come forward with their cash.

Yesterday the early years lobby welcomed the extra pounds 165m funding and the decision to give parents the right to choose between different types of provision. But it questioned whether the Government had chosen the best mechanism to increase the number of places.

How many more places will vouchers provide? The right argues that the introduction of vouchers will produce a market in nursery education that will automatically increase supply.

Some private nursery owners are enthusiastic. John Woodward, managing director of Busybees, which runs 20 nurseries where a full day's care costs around pounds 4,500 per year, said vouchers would encourage more companies to set up nurseries. "Our nurseries will be more affordable and accessible to parents. Even before the announcement we were planning 50 more nurseries."

But some private nursery operators doubt the expansion will happen. Susan Hay, managing director of Nurseryworks Ltd, which owns and runs five London nurseries, believes the risk involved means that only the most passionate entrepreneurs will risk entering the nursery business. She points out that the proposed voucher does nothing to pay for the capital costs of building new premises. Fixed costs have to be paid while a new school is building up fee income.

Margaret Lochrie, chair of the Pre-School Learning Alliance, to which playgroups belong, says: "We are disappointed that there is no cash for capital costs. Take a large suburban housing estate with hundreds of families where the nearest nursery is too far away. We should like to expand provision but there are no premises."

Even if some new places are created, some existing ones may go. The logic of the market is that the weakest go to the wall, so a small private nursery may be put out of business if it loses customers to a playgroup down the road.

Mrs Shephard has promised checks on quality, with inspectors from the Office for Standards in Education monitoring whether children are making suitable progress. Quite how the office, which is already struggling to complete the four-yearly cycle of inspections in primary schools will manage this, is not clear.

With the value of the voucher set so low, there are fears that there can be no real guarantee of a high quality nursery education being provided. This is, after all, nursery education on the cheap: the Royal Society of Arts has said a reasonable annual cost could be pounds 1bn.

There is little money for training. Playgroups, though many are very good, badly need money to improve the skills of their staff. Where are the qualified teachers for the new nursery schools to come from? Gillian Pugh, of the National Children's Bureau Early Childhood Unit, welcomes the extra money for nursery education but questions whether vouchers are the most efficient way of using it. "The bureaucracy involved could have been avoided if the new money had been channelled through the local authorities," she said.

John Major's promise to work towards nursery education for all three- and four-year-olds has taken more than 18 months to fulfil as the Cabinet wrangled over a series of different schemes. At every stage the work has been driven by the Conservative Party's current difficulties.

The Prime Minister has used his pledge as proof of his commitment to education and to placate the factions in his party. He repeated it at last year's party conference as part of his plans to raise standards in education. And he revealed his decision about nursery vouchers in the middle of his leadership campaign a fortnight ago to please right-wing Conservatives who have been campaigning for education vouchers for a decade. Whether his proposals will now deliver more good quality nursery education for the under-fives remains very much an open question.