Children’s Fund is plunged into crisis

Children’s Fund partnerships are still waiting to hear how much
money they will be able to spend on preventive children’s services
in 2004-5.

Local Children’s Fund managers were warned before Christmas that
their budgets will be cut in 2004-5, and told not to take on any
new commitments for next year. But as 0-19 went to press they still
had no news on their budgets for April onwards, and were not
expecting a figure before the end of January.

The uncertainty leaves thousands of local service providers unable
to plan beyond the end of March. However, it is understood that
extra money has now been found by the government to prevent local
programmes from being forced to break contractual agreements with
service providers as a result of “clawback” in the recent mid-year

In a letter to programme managers Tom Jeffery, director of the
Children, Young People and Families Directorate at the Department
for Education and Skills, admitted that the funding 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 receive in the coming financial year, or in 2005-6 because he
says 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 the government.

“Ministers are considering the overall budgets across the
directorate and we won’t be able to let you know the outcome before
January. Next year’s budget will enable the programme to continue
to deliver preventive services.

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

Jeffery apologised to programme managers for recent problems. Many
managers have have written to Margaret Hodge and himself
complaining about the recent mid-year review when Children’s Fund
schemes saw their unspent annual allocation clawed back by the

Jeffery admitted that the Children’s Fund had allocated too much
money on the mistaken assumption that local programmes would
underspend on their budgets.

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

As a result, he says, money has been set aside by his directorate
to prevent services being prematurely closed and staff being made

The meeting followed a strongly worded letter to education
secretary Charles Clarke from two of the UK’s biggest children’s
charities, warning that the government had left them open to the
risk of litigation by its management of the Children’s Fund.

Barnardo’s director of operations Chris Hanvey and NCH director of
children’s services Maurice Rumbold wrote a joint letter expressing
“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 charities.

A DfES spokesperson said:”The government is committed to continuing
to provide support through the Children’s Fund to children at
risk.ÊWe are inviting partnerships and key bodies involved in
the fund to work with us this year to ensure that the fund remains
at the centre of the government’s vision for children and young

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