Free nursery places will be extended to two year olds

There will be pilot projects in 500 areas, the Chancellor told MPs in his review of public spending.

There would be funding for 120,000 more child care places by 2008, said the Chancellor.

He promised an extra �100m for children's centres - raising the number from 260 to 2,500 by 2008.

Funding promises

The Chancellor said that with free places having been provided for three and four year olds - there would now be an extension to two year olds, with an initial 12,000 places to be made available.

EDUCATION SPENDING Average spending increases of 4.4% above inflation each year up to 2007-08 Spending per pupil in England: 1997: �2,500 2004: �4,500 2007: �5,500 UK education budget: 1997: �36bn (�29bn England) 2004: �63bn (�52bn England) 2007: �77bn (�64bn England) Education spending (GDP): 1997: 4.7% 2004: 5.4% 2007: 5.6%

The children's centres, which he promised would be available across the country, provide a mixture of childcare, welfare support and advice for parents.

The Sure Start scheme, supporting families with young children, has been promised an extra �769m over the next three years.

"While the 19th century was distinguished by the introduction of primary education for all and the 20th century by the introduction of secondary education for all, so the early part of the 21st century should be marked by the introduction of pre-school provision for the under-fives and childcare available to all," said the Chancellor.

The spending review confirmed the government's plan to make education a spending priority - with the Chancellor promising that its planned increases would mean that in the years between 1997 and 2007, funding for education would have risen by an annual average of 5.2%.

The United Kingdom's education spending will have risen from �37bn in 1997, when Labour took office, to a promised �77bn in 2007-08.

Last week the education secretary put forward a five-year plan, which will see this extra money being applied to creating more than 200 more flagship city academies and giving specialist status to a further 1,000 schools.

'Bureaucracy'

The leader of the National Union of Teachers, Steve Sinnott, welcomed the extra funding, but said that he was concerned "that money is being diverted to pay for the expensive and unproven academies programme".

The leader of the Nasuwt teachers' union, Chris Keates, also welcomed the extra investment.

But the National Association of Head Teachers' leader, David Hart, said that the funding increase will "only do the trick if the money actually gets to the frontline and is not diverted by bureaucracy".

There was also a promise from the Chancellor that universities would gain more support for science research and for links with industry.

University museums will also be able to join the scheme that has allowed national museums to remove charges for visitors.

Shadow Education Secretary, Tim Collins, said that it was "extraordinary that the Chancellor should choose to make access to university museums free while continuing to push through policies which will make access to universities themselves extremely expensive".

The Shadow Chancellor, Oliver Letwin, dismissed the spending plans as a "manifesto for fat government and fake savings".

"What this review really means is more bureaucracy, more targets, more initiatives, more task forces, more centralisation, more regulation, more borrowing and more taxes," said Mr Letwin.

The Liberal Democrats higher education spokesman, David Rendel, said that "billions pledged today could easily have paid to scrap tuition and top-up fees".

"How absurd to make a huge fuss to force through the very unpopular Higher Education Act when we now see it was totally unnecessary," said Mr Rendel.