Group 4 to inspect nursery schools

Group 4, the security company better known for escorting prisoners and sometimes losing them, is close to winning a contract worth at least pounds 10m to organise the inspection of nursery schools.

On Friday, its executives were in the final stages of negotiation with the Office for Standards in Education (Ofsted), the government quango in charge of school inspections. Ofsted is likely to make an announcement this week.

Though Group 4 will not carry out inspections - it will sub-contract them, possibly to local authorities or universities - its success in winning the contract is likely to cause some surprise. "I do hope they are better at looking after four-year-olds than they are at looking after prisoners," said David Evans, general secretary of the Prison Officers Association.

Group 4, however, insists that it is well qualified for the work, despite its lack of previous involvement with education. It points out that it has diversified from its core business and holds a contract for training Benefits Agency staff. It is also building two new prisons, which it will own and operate, in collaboration with the construction company Tarmac. It claims that its public image is unfair. It has actually cut the number of escaping prisoners, it says.

If Group 4 wins the contracts - it was still discussing the financial terms last week - it will have done so against competition from two other shortlisted companies.

One of them is CSL Managed Services, an arm of the accountants and management consultants Deloitte and Touche.

The winner will have the job of ensuring that schools taking part in the Government's nursery voucher scheme are properly inspected. Parents of pre-school children will be given the vouchers to "spend" at the school of their choice. The nurseries, many of which are in the private sector, will then redeem the vouchers from public funds. Inspectors will ensure that the schools are up to scratch. More than 16,000 nurseries will have to be inspected by March 1998. Ofsted has demanded new inspections and has decreed that existing school inspectors should not carry them out.

The voucher scheme has already caused fierce controversy. Opponents argue that too much money will be wasted on administering it. The choice of Group 4 is likely to cause further controversy. Some educational bodies are already questioning whether a security company can make proper judgments on who should carry out school inspections. "In these circumstances we would have to consider very seriously whether a bid was appropriate," said Anne Jarvis, Labour chair of education at Barnet council in north London. However, Rob Soutar, who drew up Group 4's bid, said: "Our job will be to ensure that Ofsted gets value for money."

Negotiations could still break down. The price Group 4 quoted last week is supposed to cover the costs of all the inspections as well as the company's own expenses and profit margin. However, neither Ofsted nor anybody else has an accurate estimate of how much the inspections will cost and Group 4 fears underestimating and losing money.