DfE ‘claws back' Sure Start grants from three councils

Responding to a Freedom of Information (FoI) request by CYP Now, the DfE said that Leicestershire County Council, Wiltshire County Council and Northamptonshire County Council have all been penalised under a contractual 'clawback' system in the past five years. A total of nearly £125,000 was taken back from the authorities.

As part of Sure Start funding arrangements, local authorities are required to notify the DfE of proposals to “dispose of or change the use of buildings or assets funded wholly or partly through Sure Start capital grants”, and must provide details of the level of early years services that will continue.

The DfE then decides whether the council is continuing to provide a sufficient level of early years services to meet the original aims of the grant. If it decides they are not, it is able to reclaim capital funding.

The FoI response reveals that Leicestershire had £4,949 clawed back in February 2013 following the closure of an early years setting, while Wiltshire had £30,549 clawed back in February 2014 following the closure of a pre-school.

Northamptonshire had £88,642 clawed back in December 2015 following the closure of a children’s centre. The total amount clawed back by the DfE from the three councils comes to £124,140.

A national network of Sure Start children's centres was first developed under Tony Blair's Labour government, with an initial £540m allocated to the initiative between 1999 and 2002.

By April 2010, there were a total of 3,631 children’s centres in England. But since then the number has been falling as local authorities look to reorganise services and save money to deal with ongoing funding cuts.

Last month, CYP Now revealed that the number of children’s centres that have been closed or downgraded since 2010 has exceeded the 1,000 mark. A further 400 children's centres are at risk of closure or being downgraded as a result of proposals made by local authorities in the past 12 months.

Local authorities have been actively trying to find ways to avoid paying back millions of pounds in children's centre grants. A report by Derby City Council, where seven of its 17 children's centres are at risk of closure, estimated that the authority could face a potential clawback bill of £3.2m.

A DfE spokeswoman said: "Where local authorities dispose of or change the use of buildings or other assets funded wholly or partly through Sure Start capital grants, they must repay the money through the clawback process.

"If the department is satisfied that the funding for the asset will continue to be used for purposes consistent with the grant, the department may defer clawback.

"Deferring clawback means that we accept the change of usage at that time. However, the department retains its interest in the asset and if in the future the asset has its usage changed, is transferred or otherwise disposed of, and does not continue to meet the purposes of the grant, the local authority must inform the department and we will claw back the funding."

The spokeswoman said the DfE retains an interest in Sure Start assets for 25 years. She added that if the grant was used to purchase capital items or refurbish an existing asset, the length of time and value of any clawback depends on the depreciation value of the items, according to local authority depreciation rules.

The government had said it would launch a consultation on the future of children's centres in the summer. The consultation had been due to launch last autumn but has been delayed.