Exclusive: Government clawback threatens Children’s Fund projects

Exclusive

Some Children’s Fund partnerships are facing big
shortfalls in the next few months as the government claws back
money they didn’t spend in the first half of the financial
year.

New funding rules published in the summer warned that for the
first time if Children’s Fund partnerships had not spent half
their annual budget by October, they may have to pay part of it
back even if projects had been promised the money.

Now some areas have been told they are to lose up to 
£300,000 as a result of underspending in the first half of the
year. One children’s fund manager said this clawback would
mean local services for children would have to close.

“Sometimes projects take longer than expected to get up
and running, and as a result they haven’t got the
infrastructure to accept funds they have been promised until later
in the year than we planned. They still need the money, but the
government has said because it wasn’t spent by October, we
can’t have it and neither can they.”

There are also worries about next year’s Children’s
Fund budgets, which have not yet been announced. The
Children’s Fund was established three years ago and last
year’s spending review allocated a further £600 million
to the Children and Young People’s Unit to enable it to
continue funding preventive services for children aged five to 13
until 2005-2006.

With the recent re-organisation of government responsibilities
for services for children, the CYPU has itself been abolished, and
there are fears that money earmarked for the Children’s Fund
could now be diverted to other programmes.

If this happens, some local services could close at the end of
March 2004.

The Children and Young People’s Unit warned partnerships
in July that they risked losing funds if they didn’t spend
them promptly. The new funding guidelines stated: “CYPU will
give serious consideration to reducing a partnership’s
funding at the mid-year review stage if it considers it highly
improbable that the partnership will spend the money by the end of
the year. All underspend taken back by CYPU will be redirected to
other initiatives and will not subsequently be available to the
partnership.”

No-one from the Department for Education and Skills was
available for comment.