Jeffery apologises for Children’s Fund finance mess, but warns of cuts to come

Children’s fund programmes have been warned by the
government that their budgets will be cut in 2004-2005, and told
not to take on any new commitments for next year.

But extra money has been found to prevent local programmes from
being forced to break contractual agreements with service providers
as a result of “clawback” in the recent mid-year
review.

In a letter to programme managers Tom Jeffery, director of the
children, young people and families directorate at the Department
for Education and Skills, admits that the recent crisis was caused
by mistakes in the Children’s Fund’s central financial
management.  But he is unable to tell programmes how much money
they will get in the coming financial year, or in 2005-2006 because
ministers are reviewing priorities.

The letter, dated 19 December, promises that the
Children’s Fund will survive in some form, but warns that
budgets will be reduced. It suggests that money thought to be
earmarked for the Children’s Fund over the next two years is
likely to be diverted elsewhere within the directorate by
government ministers.

“Ministers are considering the overall budgets across the
directorate and we won’t be able to let you know the outcome
before January. What I can say is that next year’s budget
will enable the programme to continue to deliver preventative
services for children and young people.

“We will remove the current over-allocation so there will
be less need to rely on under spend. This will inevitably mean some
reduction from the previous announced annual allocations so you
should not take on new contractual commitments.”

Jeffery apologises to programme managers for recent problems.
Many programme managers have already written to Margaret Hodge and
himself complaining about the recent mid-year review when
children’s fund programmes saw their unspent annual
allocation clawed back by the government.

He admits that the financial problems that led to the claw back
were the fault of the programme’s central administration. The
Children’s Fund had allocated too much money on the mistaken
assumption that local programmes would underspend on their
budgets.

But, says Jeffery: “We got it wrong in that Children Fund
programmes have in fact spent much nearer to budget than other
programmes and under spend has been at a lower level than
predicted”.

Before Christmas Jeffery  met with voluntary sector
organisations, social services and the Local Government
Association  to discuss the current crisis in which some programmes
could not meet their contractual commitments because money for the
second half of the year had been taken back.

As a result money has been set aside by the children, young
people and families directorate to prevent the necessity for
services to be prematurely closed and staff to be made
redundant.