LGA slams plans to centralise children’s services cash

24 Oct 12
Plans to cut £150m from council funding for children’s services could ‘severely hamper’ town halls’ early intervention programmes and put Sure Start children’s centres at risk, the Local Government Association has warned today.
By Richard Johnstone | 24 October 2012

Plans to cut £150m from council funding for children’s services could ‘severely hamper’ town halls’ early intervention programmes and put Sure Start children’s centres at risk, the Local Government Association has warned today.

The Department for Education plans to top-slice a grant paid to local government over the next two years as part of moves to expand the number of nursery places. However, LGA chair Sir Merrick Cockell has written to Education Secretary Michael Gove today questioning the decision to centralise the cash.

The Early Intervention Grant is currently provided to authorities to fund Sure Start centres and nursery places for disadvantaged two-year-olds.

In July, it emerged that from 2013/14 the grant would no longer be paid separately, but would be divided among other funding pots. As part of the change, the department would retain £150m in both 2013/14 and 2014/15 for central priorities.

The majority of this cash would be used to double the proportion of two-year-olds receiving 15 free hours of nursery education a week from 20% to around 40% – 260,000 in total.

However, Cockell said the money was being taken from the local government settlement announced at the October 2010 Comprehensive Spending Review.

‘As far as we can see there is no justification for the removal of a top-slice of £300m over the next two financial years,’ he said.

We are asking for transparency and clarity over why money that hard-pressed councils had previously banked on and budgeted for is now being taken from them.

‘This money is vital for funding services that many of the most disadvantaged in our society depend on. Councils have already taken a huge hit to their coffers. This arbitrary removal of millions of pounds will only increase the pressure on already over-stretched council budgets.’

Responding to the letter, the DfE said the decision to transfer funding for nursery places for two-year-olds to central government’s education grant was taken to give providers greater certainty. A spokeswoman said that £150m would be spent specifically on early intervention to support disadvantaged children and families

‘We are increasing overall funding for early intervention, rising from £2.2bn in 2011/12 to £2.5bn in 2014/15,’ she added. ‘This money has never been ring-fenced, so local authorities have more freedom to spend it where it is needed to help disadvantaged children and families.’

Cockell’s comments come after Birmingham City Council revealed it could have to discontinue some council services due to funding reductions. Council leader Sir Albert Bore said it faced a budget deficit ‘well in excess of £40m’, up from £2m–£3m i expected when the 2012/13 budget was set.

Following Birmingham’s announcement, trade union Unison today warned that other councils faced a ‘funding black hole’ next year.

Authorities that accepted a share of the government’s £805m grant to freeze council tax in 2012/13, equivalent to a 2.5% increase, will face a shortfall when the one-year payment stops, the union warned. Funding to freeze council tax in 2013/14 will equate only to a 1% increase, leaving a funding gap.

The union estimates that Birmingham faces a £5m hole as a result of the lower offer, while Essex County Council could have a £8.7m hole.

Heather Wakefield, Unison’s head of local government, urged councils to ‘think long and hard’ before accepting the offer of cash for a freeze for next year.

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