Early intervention grant represents 11% funding cut

"In a tight funding settlement, some reduction in central government support was inevitable," Gove said. "In 2011/12, the amount to be allocated through EIG is 10.9 per cent lower than the aggregated 2010/11 funding through the predecessor grants. 

"The new grant will however provide a substantial funding stream, with new flexibility to enable local authorities to act more strategically and target investment early, where it will have the greatest impact."

Gove claimed that greater freedoms at local level to "pool and align" funding, will help local authorities and their partners achieve better results. 

"The EIG is not ringfenced, giving local authorities the flexibility to respond to local needs and drive reform, while supporting a focus on early intervention across the age range," he said.

He added that there is enough money in the grant to maintain the existing network of Sure Start children’s centres.

"We recognise that making the transition from the old grant regime, and investing in early intervention at a time when budgets are under pressure, will be demanding," he said. "We want to work in partnership with local government to make the case for investment in these vital areas of early intervention.

"To that end, we will continue to work with the sector, including organisations like C4EO, to develop and disseminate the evidence base.

"We will promote transparency by working with the sector to measure the key outcomes and incentivise reform and effectiveness through payment of local authorities and providers by results, working with a number of authorities to develop a fair and effective methodology."

But Marion Davis, president of the Association of Directors of Children’s Services, warned that the local government settlement leaves councils little room to manoeuvre.

"The cuts come on top of substantial in-year cuts in grants," she explained. "The reduced quantum in funding as well as the pace at which reductions will have to be made is forcing councils to make extremely tough choices in children’s services."

She added that reductions in overall funding could render the EIG ineffectual.

"The EIG is not ringfenced to early intervention services, or even to services for children and young people, so directors of children’s services will be arguing hard to make sure that this funding continues to support imaginative preventative and supportive services for all age groups under 18," she said. 

"The grant is not new money, nor is it equal to the amount of money received through previous grants for specific services that are now under the ‘early intervention’ banner – indeed if Sure Start was to be protected in its current form, there would be very little left to support wider early intervention services, for example crime prevention projects with young people."

Labour MP Graham Allen is currently carrying out a review into early intervention, with an interim report due next month.