Nursery Milk (Scheme)

Thursday 27th March 2014 Written Statements

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

Today I am publishing the response to: “Next Steps for Nursery Milk”—a public consultation on the future of the nursery milk scheme.

The purpose of the consultation was to explore three different options for reforming the scheme: looking at where we can make it more efficient and improve its value for money, while ensuring that all children under five attending a child care setting for more than two hours a day continue to receive free milk.

Of the options for changing the scheme, 53% of respondents ranked the direct supply option as their first preference compared to 39% for the price capping option. Only 16% preferred the e-voucher option.

The nursery milk scheme has been running since the 1940s. The scheme currently funds free milk for around 1.5 million children under five years old in 55,000 child care settings throughout Great Britain. The Government remain fully committed to the nursery milk scheme, and to continuing to supply milk to children under five years old.

In recent years, the prices claimed for milk purchased under the scheme have risen significantly, with a corresponding increase in the total cost of the scheme from £27 million in 2007-08 to £61 million in 2012-13. This trend looks likely to continue with costs potentially rising to £80 million by 2015-16. The main reason for the increasing costs of the scheme has resulted from some suppliers of nursery milk charging as much as 92p per pint of milk when the average shop price is 49p per pint.

The direct supply option is the best way forward for the scheme as it provides best value for money to the taxpayer. Under direct supply, the scheme will be delivered with an estimated saving of £36 million per year, while providing only fresh milk to all eligible children in registered child care or early years settings.

We will engage with small and medium-sized enterprises (SMEs) while developing the new scheme and encourage SMEs to consider bidding as part of a consortia of potential suppliers and/or as sub-contractors working with larger organisations to supply and deliver nursery milk.

“Next Steps for Nursery Milk: Government Response” has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.