Organisations that have tapped into the Children's Fund to provide a range of local preventative services to vulnerable children are facing budget cuts of nearly a quarter over the next two years due to administrative failures at national level.
Budgets for 2004/05 will be sliced by 15 per cent and by about one third in 2005/06, leaving a total budget of 250m for the next two years instead of the expected 150m a year.
In a letter last December, Tom Jeffery, director of the new Children, Young People and Families Directorate at the Department for Education and Skills, alerted managers to the cuts and told them not to take on any further commitments for next year.
He conceded that administrative mistakes had created a crisis for the fund, which the DfES says was created to work with local voluntary and community organisations 'to provide additional resources over and above those provided through mainstream statutory funding, specific programmes and specific earmarked funding streams' for vulnerable children aged five to 13.
The fund, which is not a grant awarding body but allocates money to local partnerships, was run by the Children and Young People's Unit under the control of the Home Office until it was merged late last year into the newly-created directorate and became the responsibility of the minister for children and young people, Margaret Hodge.
But the directorate has inherited a reported 73m hole in the finances of the fund from the CYPU. This arose because central Government initially believed that local partnerships had significantly underspent their allocations in the first wave and, in response, clawed back the fund's unspent allocations during a mid-year review.
In fact, the 149 local partnership boards created to distribute the fund were in the process of setting up programmes, and while all their money may not have been spent, most had been committed.
Programme managers and many board members are furious. Bob Janes, chair of Derbyshire early years partnership, says, 'There have been threats of clawback and changes to budget levels and we have screamed very noisily.
You can't work that way. We plan our budgeting over a year and therefore there is going to be an apparent underspend, but the money is committed.'
Review out of the blue
Phil Rogers, social inclusion manager in the Derbyshire early years and childcare team, which has used money from the Children's Fund to help implement its social inclusion policy, says the mid-year review 'came out of the blue, challenged all our accounting practices and caused major planning problems'.
He says the county's Children's Fund allocation had already been cut by Pounds 200,000 after the Government decided that from April 2003, a quarter of the allocation of 1.9m should be spent on services associated with youth crime reduction.
'It meant we had to spend 400,000 of our programme on that when we had already committed the whole allocation to other projects,' he explains.
Cutbacks were implemented without redundancies, but Mr Rogers warns that 'if we have to cut again we are in a different ball game' and says there were 'many anxious programme providers out there'. He recently met with the fund's director Kathy Bundred to voice local concerns and is due to meet Margaret Hodge.
Dave Roberts, children's fund programme manager for Devon, says the process of deciding which programmes to continue over the next two years based on allocations had already been completed in the county. 'But now that has to be put on hold because we don't know what our budgets will be for the next two years. It doesn't just mean we can't go into new contracts - we don't know whether we can continue with the existing ones,' he says.
While confirming the cuts, a DfES spokeswoman says, 'The budget for next year and the year after will enable the programme to deliver preventative services for children and young people. We realise this has been a difficult year for partnerships and we are working now to get stability back into the system.'
But in his letter, Mr Jeffery did not dispel concerns over the fund's future when he said that 'ministers are considering the overall budgets across the directorate'. Mr Rogers fears that now it is no longer in a 'discrete' pot of money in the CYPU, the fund may have to compete with other priorities within the DfES budget, and that could mean cuts in jobs.
Central or local
The uncertainty surrounding the fund has sparked debate about what direction it should take in future if it is to continue to play a key role in local preventative services for children. Should it continue to be left to local partnerships, encompassing a broad range of voluntary and community organisations as well as bodies such as the NSPCC and Barnados, to distribute the fund? Or should it be more centrally controlled and given a tighter focus?
Anne Longfield, chief executive of the Kids' Clubs Network, says the fund should be integrated alongside the out-of-school childcare and study support programmes.
She explains, 'The work of the fund has shown there are a large number of interventions that can have beneficial outcomes. In its first phase it has generated interest and thrown up ideas, and they have been allowed to flourish. Now it needs to sort out which of the interventions have worked and how they can be mainstreamed.
'They need to be brought together so that you don't have hundreds of interventions that are not connected, but you start building them into a mainstream model like a children's centre or extended school so children get help as an ongoing thing rather than just a one-off project.'
The DfES spokeswoman confirms, 'It has always been expected that the fund will be mainstreamed after March 2006, the end of the current spending review. Partnerships should begin planning to mainstream now, identifying best practice and ensuring that lessons about what works are learned and disseminated.'
Alex Leith, area manager for the NSPCC for Cheshire and Merseyside and chair of a Children's Fund partnership board in Warrington, says that rooting these local initiatives into mainstream practices is 'a long-term project, not a quick fix'. He is wary of the drift towards more centralised control over the fund, arguing that its strength has been the partnership approach, 'rooted in processes of dialogue with voluntary agencies, national and community groups'.
Mr Leith adds, 'The culture that was around the fund at the beginning is clashing with the culture that Government is trying to instill in programmes, which is more centrally directed and clearer in terms of outcomes. We set off with the partnership approach and should not change it midstream.'
He says that as a member of the St Helens partnership board he saw first hand how important genuine local ownership of a project helps to galvanise the community when an area of the town decided to create a youth club.
'There was tremendous enthusiasm among local people, who knew what they wanted. They had no administrative experience, they had to create their own accounting systems, but the place is thriving. I don't believe a centrally-driven approach would have created something like that, because it would feel like something done for them rather than by them.'
Green Paper strategy
Dave Roberts believes that projects set up through the fund are ideally placed to feed into the work of Children's Trusts, due to be rolled out in every local authority by 2006. 'I see the fund's projects as being very firmly in line with the preventative strategy outlined in the Green Paper.
The task will be to get those in charge of the Children's Trusts to build on what's there, to avoid replicating what's being done through the fund and ending up with parallel services,' he says.
The DfES spokeswoman confirms the link with the Green Paper: 'The programme has been an important lead into much of what the Green Paper aims to achieve. We will be working with partnerships over 2004/2005 and 2005/2006 to develop this policy and help ensure effective mainstreaming locally.'
However, it is unclear whether partnerships will have the same autonomy afforded them under the terms in which the Children's Fund was created.
Partnerships may feel they are being penalised with the prospect of greater central control, not for any local failings, but because of administrative shortcomings in Whitehall.
But many may regard mainstreaming successful projects and linking them to the implementation of the Green Paper through Children's Trusts, extended schools and children's centres as a way of creating greater coherence in the provision of preventative services and ensuring their long-term sustainability.