News

The government has found extra money to rescue the Children's Fund from a 15 per cent budget cut in the coming financial year.

In a conciliatory and apologetic letter, Anne Weinstock who manages the Supporting Children and Young People section at the Department for Educational and Skills told programme managers and chairpersons that cuts to the 2004-5 budget announced two weeks earlier would not now take place.

The first letter, also from Weinstock, announced a 15 per cent cut to Children's Fund allocations in 2004-5, and a 30 per cent cut in 2005-6. The cuts were blamed on "over-allocation" last year by the former Children and Young People's Unit.


The latest letter says ministers have found new money from outside the Children's Fund in 2004-5 which means the total budget for the year will be £160m.

There will also be a contingency fund to allow Children's Fund partnerships to respond to exceptional circumstances. This is likely to include situations in which service providers had been promised funds which were then clawed back by the centre from local programmes because they had not been spent by the mid-year deadline.

The change of heart follows publicity about the cuts in several national newspapers last week.

There are no promises in the letter about 2005-6, although the tone suggests the across-the-board 30 per cent cut announced two weeks ago is now less likely. Weinstock said that ministers "wish to approach these issues collaboratively with the sector" and that the final decision will depend partly on the 2004 spending review.

The letter also implies the Children's Fund may survive beyond 2006. Final decisions and allocations for 2005-6 will be made in the summer of this year, says Weinstock. "Our aim will be to give you a firm planning basis for that and future years at that time."

The letter also lists a series of major concessions including allowing programmes to carry forward underspend from this financial year to next, and from next year to 2005-6. They will also be able to "reprofile" from one quarter to the next - revise their spending timetables during the course of the year in the light of local developments.


The government is also thinking again about the rule forcing Children's Fund programmes to spend 25 per cent of their money on youth justice projects, in conjunction with local youth offending teams. The 25 per cent rule was announced at the end of 2002, and was to apply in 2003-4 and 2004-5. It meant a major disruption for local Children's Fund programmes as service planning had to be totally revised despite lengthy consultations with local children and their families. Ministers from the Home Office and Department for Education and Skills are currently in talks about the rule, and "are looking to reach agreement soon," says Weinstock.

Barnardo's have welcomed the reprieve for this year but expressed continuing concern about the Children's Fund budget for 2005-6.

Chris Hanvey, Barnardo's UK director of operations, said: "This last-minute reprieve will allow us to defer planned cuts in jobs and services, but we won't know the effect of the reduced funding until the regional allocations for next year are received. Nor can we be certain of the future for services if the 2005-6 cuts go ahead.

"We appreciate that the DfES has worked hard to resolve this matter," he added, "but the uncertainty over funding is putting great pressure on our staff and services, and has undermined the trust between government and voluntary organisations. There is much ground to make up in the DfES's claims that it works in partnership with the voluntary sector."