But closer analysis of the local government finance settlement by CYP Now reveals this will not be the case for many local authorities because of stark differences in the way the grant has been divvied up across England.
Furthermore, the promised £291m funding for 2012/13 to prepare for the expansion of free childcare for disadvantaged two-year-olds is included in the total early intervention grant package for the coming year. So despite the apparent six per cent overall rise – from £2.232bn in 2011/12 to £2.365bn in 2012/13 – the reality is a like-for-like cut of nearly £158m.
Coupled with an overall reduction in the formula grant – the main grant councils receive from Whitehall – from £52.1bn to £50.4bn, the coming financial year promises to throw up huge challenges for local government.
Even before the requirement to prepare for the expanded childcare offer for two-year-olds is taken into account, many areas ranked lowest on the Child Well-Being Index 2009 have been handed a smaller increase than more affluent areas.
According to the index – which ranks wellbeing against measures including housing, environment, material wellbeing and education – Hull is among the bottom 10 authorities (140 out of 149), with one of the highest average scores of children at risk of being in need. Yet it will face a 1.37 per cent drop in its early intervention grant, from £15.29m to £15.08m.
A further seven authorities – Rotherham, Wolverhampton, Blackpool, Hartlepool, Stoke-on-Trent, Sunderland and Tower Hamlets – which all feature in the bottom third of the rankings, will receive the lowest increases of less than two per cent.
At the other end of the spectrum, Surrey, Redbridge, Kingston upon Thames, Buckinghamshire, West Berkshire, Wokingham, Harrow, Barnet, Richmond upon Thames and Wandsworth are all among those to receive the highest increases of more than 9.5 per cent. Of these authorities, five rank in the top 10 for child wellbeing.
The increases come despite the DfE pledge to introduce "floor" and "ceiling" targets to limit increases to between six per cent and 1.8 per cent in 2012/13 in order to "minimise turbulence" as authorities adapt to the early intervention grant.
"If government is seriously minded to tackle the needs of the most deprived children, which is what the text of the early intervention grant states, you would expect a pretty strong correlation between deprivation indices and levels of grant," says Wes Cuell, former director of services for children and families at the NSPCC. "It begs the question of whether this was intended and, if so, how does the intention fit with the policy?"
Grant allocation
Examination of Department for Education (DfE) documents also reveals that Conservative-led local authorities have received a better year-on-year grant settlement than more deprived Labour-controlled councils.
DfE literature on how the grant is calculated shows that funding within the grant has been allocated "so far as possible" in a way that is "objective, transparent and a good ‘fit’ with the principles of the grant", namely focusing on disadvantage and prevention, with a premium on early years.
It adds that most of the grant has been allocated using the existing early years formula based on the under-five population, and is weighted to reflect deprivation.
In addition, some of the grant has been allocated according to a youth formula, based on population numbers, educational attainment, numbers of young people not in education, employment or training (Neet) and deprivation indicators.
But the situation has provoked concerns of political bias as seven of the 10 authorities doing best out of the settlement are Conservative-controlled, while eight of the authorities faring the worst are Labour-controlled (see expert view below).
"There is bound to be a question in people’s minds about whether the formulas for deciding grant levels reflect political bias," Cuell says. "The evidence may be coincidental, but a lot of people express private concerns that Conservative authorities get rewarded and Labour punished."
There are also concerns around how local authorities will adapt to the requirement to prepare for the extension of free nursery places to the 40 per cent most disadvantaged two-year-olds from 2013/14.
The £291m announced by Chancellor George Osborne in his autumn statement is intended to allow authorities time to "build quality and capacity, particularly in disadvantaged areas" for the new duty to provide free places for 40 per cent of two-year-olds.
Taking the £291m into account, the remaining portion of the EIG has actually fallen by £158m or 7.07 per cent, leading to fears that other early intervention services could suffer if authorities focus on preparing for the duty.
"There continues to be increased pressure on local authorities to deliver a range of critical services from the squeezed early intervention grant," says Ryan Shorthouse, researcher at the Social Market Foundation.
Funding concerns
"Additional funding [for free childcare places] was granted by central government, but it didn’t take into account the need for capital funding and it is unclear whether sufficient funds will be passed on to providers.
"Local authorities face a difficult task and will have to think very creatively about ensuring that all eligible two-year-olds can access their early years free entitlement in 2013."
Wes Cuell adds that the early intervention grant settlement will not only affect councils, but will have a knock-on impact on the voluntary sector.
"A lot of early intervention services are delivered by third-sector providers and they are in a dire situation already, with some charities having a high proportion of staff on notice of redundancy."
But David Simmonds, chair of the Local Government Association’s children and young people programme board, says the potential implications of the early intervention grant settlement still need to be explored.
"With these sort of budget statements, the devil is in the detail," he says. "With the early intervention grant, we will be trying to work through the consequences of all the changes.
"It is reasonable for formulas to change from year to year as local areas do change over time, but we need to look at the detail to see whether these are justified."
The government is consulting councils on the detail of this year’s settlement until 16 January.
EXPERT VIEW: John Fowler, policy manager at the Local Government Information Unit
The way government has redistributed the early intervention grant has been in favour of leafier areas, although not quite on the level of the previous Conservative government of the 1990s. But it is difficult to know whether some areas were actually overfunded by the previous Labour administration.
Some Labour authorities will have recently lost temporary funding that would have counted towards their early intervention grant in previous years, such as intensive intervention or money from the Youth Crime Action Plan. On the other hand, it could be argued that many of the areas in need of this money would have been Labour areas regardless of party politics.
Graham Allen’s suggested holistic approach to early intervention is clearly the best way of doing it. One of the problems with 20 or 30 separate grants is that you get overlap. At least by lumping all these grants together, programmes can be run together with shared management, reducing duplication.
But the problem now is that local government has experienced a specific grant regime for the past 30 years. There are few people in local government with any experience of how to develop services that are right for their area rather than in accordance with the government-funding regime.
The volume and speed of cuts, especially in unhypothecated [non-earmarked] money, is so large and there will be knock-on effects. The consequences will be with us for a long time.
The impact is going to be reductions in services, the closing of projects and staff redundancies. Even with 12 months’ notice, it is difficult, given the fairly low level of capacity of local authorities in some areas, to think about what you can do with the money you do have.
