Cabinet at odds over funding for nurseries: Treasury opposition threatens pounds 100m boost for under-fives

A CABINET split threatens to block a pounds 100m initiative intended by John Patten, Secretary of State for Education, as a first stage in implementing John Major's pledge to expand nursery education.

A proposal by Mr Patten for a ring-fenced fund aimed at an early increase in provision for the under- fives is meeting stiff resistance from the Treasury and the environment department.

Mr Major is under Cabinet pressure to arbitrate on Mr Patten's initiative, which would allow local authority, and possibly voluntary and private-sector providers, to bid for central government funding for an expansion of nursery places.

But Kenneth Clarke, the Chancellor of the Exchequer, has issued a sharp reminder that rules on state spending mean extra funds for nursery education cannot be considered outside the normal public expenditure round. They will have to take their turn with competing departmental spending bids and be approved by the Cabinet spending committee EDX.

At the same time, John Gummer, the Secretary of State for the Environment, who is responsible for local authority budgets, has written to the Prime Minister warning that reallocation of existing resources to fund pre-school places would put severe pressure on the pounds 17bn local authority budget for education.

Questioning the merits of the initiative, Mr Gummer has pointed out that pounds 300m a year is already being spent on nursery education.

Although neither of Mr Patten's colleagues is opposing, in principle, early expansion of nursery education, their stance, if endorsed by the Prime Minister, will complicate present plans by the education department for a White Paper in the summer or early autumn.

With Labour pressing the case that its own local authorities are ahead of those that are Tory-run in the provision of nursery education, the issue has assumed a higher profile during the local elections.

The new push within Whitehall on nursery education started after an interview last December in which Mr Major said that it was 'an ambition' of his to move 'over time' towards universal nursery education. But he added: 'We do not, at the moment, have detailed plans to do so and we don't have the resources.'

Mr Patten's plan for a pounds 100m ring-fenced allocation is seen in Whitehall as a relatively low-cost way of realising Mr Major's pledge in the short term.

The options for nursery education already considered by the department include vouchers, though these might be worth only a few hundred pounds and not cover the full cost of a nursery place. The Government would put a statutory duty on local authorities to provide places in schools for four-year-olds if their parents wanted them.

Mr Patten is believed to be anxious to ensure that, if ministers eventually opt for vouchers, there should a greater supply of nursery and pre-school places for the vouchers to buy.

Officials have costed nursery education for all three and four- year-olds at pounds 930m. Local authorities might be required by law to provide part-time nursery education for four-year-olds but even this would be expensive.

One compromise might be more playgroups for three-year-olds with money to local authorities to upgrade ordinary school classes where about 60 per cent of four-year-olds are already being educated.

Local authorities are already preparing a bid, during the present council spending round, for more money for nursery places and for the growing numbers of four-year- olds in schools.