Crunch sparks spending review

By Ruth Smith Thursday, 23 October 2008

Treasury officials have ordered government departments to re-examine spending commitments on children's services, CYP Now has learned.

School children with school meal by Guzelian

Areas under scrutiny for potential savings include the £100m attached to the Youth Crime Action Plan and £10m of extra funding for the play strategy. Ministers have yet to respond to public consultations on these initiatives.

CYP Now also understands the free primary school meals pilot announced by Children's Secretary Ed Balls at the Labour Party conference is also being reviewed. The credit crunch has already delayed publication of the child health strategy.

A Department for Children, Schools and Families spokeswoman denied expenditure on these initiatives would be cut. "As far as we are concerned, these things are going ahead with the money announced at the time," she said.

But the Treasury said it has asked departments to look at projects to "kick-start the economy". This could include accelerating Building Schools for the Future spending. "It would involve bringing money forward that would have been spent at a later date," said a spokeswoman.

Paul Ennals, chief executive of the National Children's Bureau, said: "It's clear the government has to be reviewing expenditure, but I'm optimistic it will see the importance of continuing to invest in children's services in bringing the country out of recession."

The Ministry of Justice has to save more than £900m over the next two years. A spokeswoman said there would be some "difficult decisions", but added there were no plans to close courts or cut funding in gang and knife crime initiatives.

CUTBACKS BEGIN TO HURT THIRD SECTOR

Local authority finances are also being increasingly squeezed by the credit crunch. It is causing some to reconsider the degree to which they subcontract services to the voluntary sector.

CYP Now understands at least one council has changed its mind about tendering its youth service to the voluntary sector. This is because keeping services in-house will make it easier to find savings at a later date.

John Chowcat, general secretary of children's services' union Aspect, said: "It is true that in a period of economic downturn the voluntary sector experiences specific difficulties."

He added: "The three-year financial settlement under the Comprehensive Spending Review for 2008 to 2011 was already very tight. It led to a reduction in resources for local authorities and that was before the current situation. Now, rising inflation will eat into resources that are already stretched."

Meanwhile, the Department for Business, Enterprise & Regulatory Reform is considering postponing plans to extend the right to ask for flexitime for parents of children under six to all those with children up to 16.

- See analysis, p16.