The investment is in response to the Bercow Review, published in July this year, which identified the importance of early intervention in addressing children's speech, language and communication needs (SLCN).
Health secretary Alan Johnson and children's secretary Ed Balls launched the plan today. It will also see 20 pathfinders develop good practice, up to £1.5m of grants to the communication sector, and the same amount for research over the next three years.
Conservative MP John Bercow, who conducted the review, said: "Today's Action Plan is a welcome recognition by Government that communication must be given a much higher priority, nationally and locally, in the development of children's services."
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