No external markup declarations present - referenced entity 'è' must be declared.

Hi All,

I have an XSD (included below), but the 'è' character (html char: 'è') in the word 'Crèche' (line 6) is causing an problem; the schema fails validation: No external markup declarations present - referenced entity 'è' must be declared.
Please help, how can I do this?

<?xml version="1.0" encoding="utf-8"?>
<xs:schema xmlns:types="http://localhost/dropdownvalues.xsd" xmlns:xs="http://www.w3.org/2001/XMLSchema" targetNamespace="http://localhost/dropdownvalues.xsd" elementFormDefault="qualified" attributeFormDefault="unqualified">
<xs:simpleType name="WorkplaceDetailsType">
            <xs:restriction base="xs:string">
                        <xs:enumeration value="Office, school, shop, restaurant, hotel -&gt; Office, Meeting room, Library"/>
                        <xs:enumeration value="Office, school, shop, restaurant, hotel -&gt; Cr&egrave;che or Day nursery"/>
                        <xs:enumeration value="Office, school, shop, restaurant, hotel -&gt; Primary or Secondary school"/>
                        <xs:enumeration value="Office, school, shop, restaurant, hotel -&gt; College or University"/>
                        <xs:enumeration value="Office, school, shop, restaurant, hotel -&gt; Retail unit or Shopping Centre"/>
                        <xs:enumeration value="Office, school, shop, restaurant, hotel -&gt; Other"/>
                        <xs:enumeration value="Other -&gt; Other"/>
            </xs:restriction>
</xs:simpleType>
</xs:schema>

Thanks,
Brendan