Dairy UK has come out in favour of capping the price that can be claimed for milk in its response to the Department of Health’s consultation on the future of the Nursery Milk Scheme.

The scheme - which has been running since the 1940s - provides free milk to 1.5 million under-fives. It currently reimburses child care providers in full for milk they buy under the scheme but the DH is exploring ways to cut the amount it pays out.

Introducing a simple, single price cap would deliver the best option all-round as it would reduce the impact of scheme changes on dairy businesses, allow the DH tighter budget control and ensure a low administrative burden on childcare providers, said Dairy UK.

The cap would allow the scheme to “continue efficiently, and protect DH from any future issues relating to claim costs, while maintaining the current simple and effective reimbursement systems”, it wrote, suggesting a cap of 65p to 69p per pint.

The other three options in the consultation document included doing nothing issuing e-voucher cards or establishing a direct supply chain of milk.