Kennedy: Child trust fund scheme waste of money ? Lib Dems will invest in early years.

6.05.57pm GMT Thu 13th Jan 2005

Charles Kennedy, Leader of the Liberal Democrats and Phil Willis, Shadow Education Spokesperson, visited the New River Green Early Years Centre in Islington to highlight their party's opposition to the Government's Child Trust Fund scheme - launched by the Chancellor this week.

The Liberal Democrats are campaigning to scrap the government's Child Trust Fund scheme, instead pledging to spend the money on investment in early years education, reducing class sizes for 5-7 year old children to twenty. Mr Kennedy said:

"Every parent wants the best for their child. Every parent would like to see the Government concentrate resources on the wellbeing and education of their children. The welfare of our children and support for parents struggling to balance the demands of home and work must be a priority for Britain.

"But if we are serious about putting our children first; if we are serious about improving nursery and early years education; if we are serious about investing in the fantastic work of early years centres; then we must be prepared to make tough choices when it comes to the allocation of Government funds.

Tough choices mean looking carefully at the money being spent on our children and choosing to spend it more effectively, rather than wasting it. As a society, Britain cannot afford to postpone investing in our children. That is why my party is strongly opposed to the Child Trust Fund Scheme launched by the Government on Tuesday.

The Government is planning to send out the first of the Child Trust Fund vouchers to new born children - £250 per child with an extra £250 for children below the poverty line. The money will be invested in special accounts and will be closed until the child reaches 18.

Fund managers are set to cream off 1.5% of the take. And unless parents add to the kitty, most 18 year olds will get a windfall of around £500 - the first accounts maturing around 2020.

The Government is set to spend around ¼ of a billion pounds of taxpayer's money every year in support of this scheme. Superficially it may sound attractive but ask yourself what would you have done if you had been handed £500 by the state at the age of 18? Would you consider this to be a good use of taxpayer's money?

The Chancellor has said that "The Child Trust Fund is designed to ensure that every child in our country has assets and wealth and that no child is left out and all children in Britain have a stake in the wealth of the nation."

But even for those families struggling below the poverty line, whose children will get a pay out of around £1,000 when they reach 18, how will this pay out change their future?

What good does it do children now to lock this money away, when it could be invested now in helping to give every child the best start we can? In fact, Labour's Child Trust Fund scheme locks up much needed resources. It is expensive, unnecessary and delivers few real benefits.

Fewer than half of 18-year olds are in education or training. For them the Child Trust Fund may mean some cash in their pockets, but they will still have missed out on the chance of a life changing education. For those who choose to go to university it is a particularly hollow gesture as the Government will give them a few hundred pounds in cash and at the same time a mortgage-style bill in tuition fees. Expert opinion and common sense agree that children well taught and well cared-for in their early years have a far better chance of living fulfilled and rewarding lives.

Why are we set to lock up huge sums of money in the Child Trust Fund when we could invest that money now, for the benefit of children now? Instead, the Liberal Democrats will use this money to make a real impact on improving education for our youngest pupils. The Liberal Democrats plan to continue the commitment to setting all children firmly on the path to success by investing more money in the crucial first years of formal education. We believe that it would be more farsighted to spend the billion pounds or more which is set aside in the Child Trust Fund to reduce class sizes to 20 for 5 to 7 year olds, than giving 18 year olds a bit of cash.

The benefits of improving classroom conditions for our children at this formative age are far reaching. Children who are engaged by learning from the start are more likely to be confident and successful students. This in turn means they are less likely to play up in the classroom or play truant on the streets.

Smaller class sizes reduce the burden of paper work and form filling for teachers while simultaneously increasing the time to do the work they are trained for and enjoy - interaction with their pupils. The Liberal Democrats are clear about their aims for our children's welfare. Smaller class sizes, quality education in local schools, more childcare centres and greater help for parents in their child's earliest years.

We are determined that the key elements of the 10-year Childcare strategy should be implemented: 3500 children's centres by 2010, providing integrated childcare, early education and family services to the under 5's. Extending free part-time early education places for three and four year-olds to four hours a day for 38 weeks and increase the flexibility for parents to use these hours. Offering wraparound care to all school-age children by opening schools from 8.00am-6.00pm. The Liberal Democrats would invest for our children's future now, not lock money away.