NCH and Barnardo’s fear big losses because of “unfair” children’s fund cuts

Two major children’s charities have written a furious
letter of protest to education secretary Charles Clarke and
children’s minister Margaret Hodge about the way
the government is managing the Children’s Fund.

In a private letter to the ministers, Barnardo’s director of
operations Chris Hanvey and NCH director of children’s
services Maurice Rumbold express “profound disappointment and
deep concern” about the way the children’s Fund is
being run which they say is having a “serious, adverse
impact” on the two organisations.

They warn that government action could lead to litigation
against the two charities, the closure of local organisations and
community groups, widespread cynicism among children, families and
communities, and significant financial losses for the two
charities.

Barnardo’s and NCH have much invested in the Children’s
Fund. Between them the two charities are the lead or accountable
bodies for 37 local children’s fund programmes, and local
Barnardo’s and NCH services are running about 100 projects funded
by the Children’s Fund.

The letter, dated December 9th, has been sent anonymously to
0-19. It protests about the clawing back by the government of money
under spent by local children’s fund partnerships in the
first half of the financial year (see ‘Update’ December 9th). It is
estimated that at least £5 million has been cut from the
annual budgets of local children’s fund programmes this year
following a mid-year review of their financial position, much of it
already promised to local service providers.

Children’s fund programme managers had accrued these under
spends, says the letter, having “followed in good faith the
advice they had been given by DfES staff … about how they
should plan their budgets and phase their expenditure.

“As a result programmes have in many cases commissioned
services from providers for which they now do not have the money to
pay, and have recruited staff whom they will now be forced to make
redundant.”

The letter goes on to warn government what this could mean. As
well as children not receiving services they need, Hanvey and
Rumbold point out that children’s fund staff have been
diligent about consulting local communities about what services are
needed. It will be very hard to persuade local communities to take
part in consultations in future if current agreed plans cannot be
put into action because of cuts, they argue.

But NCH and Barnardos are also in trouble themselves because of
the clawback. The letter points out that as lead bodies,  they will
be forced to renege on service level agreements with organisations
they had commissioned to deliver local services and could be sued
as a result. The cuts will also affect their revenue directly both
as lead bodies, and as providers of services to children’s
fund programmes.

“Both our organisations had planned our budgets in the
expectation of receiving this money, and have no other means of
making up the shortfalls.” Later they say: “We feel it
is extremely unfair of the government to expect its voluntary
sector partners to pick up a large part of the bill for financial
difficulties that are not of our making and that result from our
involvement in a government programme that we embarked on with
great enthusiasm … and in all good faith”.

The letter also draws attention to the difficulties of managing
children’s fund staff in the current climate. Many of them
are angry and anxious and feel badly let down both by the
burdensome process of going through a mid-year review, and by the
outcome of the review. “The business cases they submitted do
not seem to have had any significant impact on the DfES decisions
that have been taken” say Hanvey and Rumbold.

The letter is especially significant in view of the
government’s professed wish to work in closer partnership
with the voluntary sector, and to have it provide more public
services. Last year, the Treasury published the result of a
cross-cutting review of the role of the voluntary and community
sectors in service delivery, following up the 1998 Government
Compact with the voluntary vector. The review recommended that
government should forge long term strategic partnerships with the
sector and build its capacity, as well as implementing the Compact
at all levels of government.

In their letter Rumbold and Hanvey tell Clarke and Hodge:
“It goes without saying that what seems to be happening is
almost certainly a breach of both the spirit and the terms of the
government’s compact with the voluntary sector.”

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