EYF Q&A
What is the Department doing on EYF?
The department is reducing its End Year Flexibility (EYF) requirements by £1bn to help ensure no additional borrowing this year. This is in line with the Government’s plan to reduce the deficit, and the Treasury’s announcement today that Departments have agreed to address unrealistic inherited spending commitments for 2010-11, where funding was reliant on under spends through the (EYF) system or additional funding from the Reserve.
How will the £1bn reduction be made?
The Department expects to be able to manage most of this through better financial management and tighter controls. For example, last year, capital EYF forecasts in June were £830m but the Department ended up drawing down only £330m – a 60% in-year reduction. This year, we will be managing finances even more tightly, working closely with local authorities and others to ensure that where projects are likely to underspend those underspends are given back, that projects are completed more cost efficiently where possible, and that low value spending is cancelled to relieve pressure on budgets.
Because of the size of the reduction, however, the Department will have to make some savings from capital budgets where commitments are no longer affordable. The £169.5m savings to be made are listed below.
£m savingCo-location projects – cancelling projects where progress has not been satisfactory or is not good value for money / 24
School swimming - cancelling capital investment in school swimming pools as part of the Free Swimming programme because of poor value for money of the scheme as a whole / 15
Eco-towns contribution – not funding pilot project work on energy efficient schools in eco-towns / 2.5
Harnessing Technology Grant – a further reduction to take this year’s funding down by a total of £100m, allowing schools to reconfigure their broadband and IT infrastructure projects onto a more sustainable funding model / 50
Support for LAs not included in Early BSF Waves (Diploma, SEN and Disabilities projects) -– cutting allocations to the 77 LAs which were not included in early BSF waves and were therefore allocated £8m each to support projects to adapt premises for 14-19 diploma or for SEN provision. Each allocation will be reduced by £657,895 / 50
Social Work IT support – not proceeding with plans announced just before the election of a formulaic allocation to LAs to improve social work IT provision / 15
Youth Capital Fund – Reducing available funding from the Youth Capital fund by 50% / 13
Play Capital
Capital grant that is not yet spent, or where there is no evidence of a strong case to continue the contractual commitments entered into, may be retained by the Department / To be determined
Total / 169.5
Why are you doing this?
The action that the Government is taking today will help ensure no additional borrowing this year, consistent with the Government’s plan to reduce the deficit. It will help create contingency in the Reserve to meet other pressures that might arise over the course of the year and ensure any additional costs of operations in Afghanistan can be funded without increasing borrowing.
Are these in additional to cuts previously announced?
We have previously announced small cuts of £8 million to specialist schools capital, of £25 million to the extended schools programme, and of £50 million to Harnessing Technology grants, as contribution to the Chancellor’s £6.2 billion fiscal consolidation, and in order to make progress this year on the government’s commitment to free schools.
What programmes are being cut?
Co-location funding: £24 million. The £200m Co-location Fund was announced by the previous Secretary of State in June 2009 to develop facilities to enable further integrated, more effective services for children, young people and families through 101 projects across the country involving a range of partners at local level including education, health, youth, sport, leisure and library services. A number of projects to the total value of £24m will be cancelled or rescoped where progress has not been satisfactory and they are not promising to show value for money for the public purse or delivered within the timescale for the fund. PfS will inform the sponsors of these projects individually.
QDoes this mean that you are no longer interested in co-location?
ANo: in tightened circumstances it is even more important that assets are used efficiently and focussed on user needs. These projects are being cancelled or rescoped because they are not achieving their aims.
School swimming: £15m. We are cancelling capital investment in school swimming pools as part of the Free Swimming programme because of the poor value for money of the scheme as a whole.
QDoes this mean that you are abandoning the health and fitness regime?
ANo – but this initiative was not achieving the response that had been expected and therefore continuing it is not a good use of money.
QWhich schools are affected?
ANo announcement of allocation of this money had been made. We are naturally sorry for schools which had applied and are now disappointed.
Eco-Towns contribution: £2.5m. We are withdrawing our contribution to support pilot work on energy efficient schools in the CLG led eco-towns initiative.
QDoes this mean that you are abandoning aims of cutting carbon emissions?
ANo: and the sustainability of the schools estate, and the need to move to meet 2020 statutory targets for carbon reduction will be considered in the review of the department’s capital programmes, including BSF, which has just been announced. We are continuing other immediate moves to reduce schools’ carbon footprint, including the offer of free ‘smart meters’.
Harnessing Technology: £50m. The programme will now be worth c£101m to all local authorities. Local Authorities have received the first quarterly payment and will get the second, giving them time to plan to reconfigure their broadband and IT infrastructure programmes. This £50 million saving is in addition to the £50 million saving announced on 18th June.
QDoes this mean that you do not see IT as a contributor to the improvement of educational standards – you have just also disbanded Becta?
AAppropriate IT supports good teaching and learning. It is however now well embedded in schools, and we do not think that further hypothecated capital investment is needed.
QDoes this mean that schools will have to abandon broadband contracts that are essential to a data rich IT environment?
AThese contracts are a call on revenue, not capital, funding. As the Chancellor announced schools revenue funding has been protected.
Support for LAs not included in early BSF waves: £50m.
Support for LAs not included in early BSF waves – cutting allocations to the 75 LAs which were not included in early BSF waves and were therefore allocated £8 m each to support projects to adapt premises for 14-19 diploma provision. In addition Cheshire West and Cheshire East, which became 2 authorities in 2009-10, also received £8 million between them. Each £8 million allocation will be reduced by £657,895. Where authorities drew down all of the £8 million in 2009-10 in response to the fiscal stimulus offer, a cut will be made in 2010-11 from other capital funding delivered through the Single Capital Pot.
QIsn’t this a cut for the most vulnerable?
AThe cut is 8.25% of the total funding we were providing to each authority. Authorities have access to other sources of funding and can prioritise their needs and manage their cash flow.
[as many local authorities are being affected by today’s announcement of a freeze on BSF, it is only fair that this is also reflected these authorities which received funding because they were not in BSF.]
QDoes this mean the Government no longer supports Diplomas?
AThe new Government will be reviewing Diplomas in the next few months as part of their assessment of vocational education currently provided to young people, as set out in the Coalition Agreement.
Social Work IT support: £15m. We will not proceed with plans announced just before the election of formulaic allocation to local authorities to enhance social work IT provision
QWhy are you cutting the £15m promised by the previous government for social work IT/ Improvement of ICS systems?
AThe previous administration announced a grant of £15m capital in 10-11, which will no longer be available. Ensuring that social workers are freed up from bureaucracy on the front line and able to make the most difference for children and their families is a critical priority for the Government. These issues are being examined by the Munro Review, including the question of how ICT can best support effective social work practice.
Ahead of that review, and in the present economic circumstances, we do not consider delivering the grant as announced by the previous government the most effective way of supporting the sector.
Local authorities will need to continue to address IT problems, where these are causing problems for social workers locally and there is guidance from the department to help them to do so. The Government has protected the £23m Social Work Improvement Fund for local authorities, which will be available from CWDC, and which local authorities may choose to use to address IT issues where these are a local priority.
Sure Start from under spends in the programme and through finding savings in discussion with local authorities.
In the context of tackling the unprecedented deficit we will need to manage down the capital expenditure from the Sure Start, Early Years and Childcare Grant (SSEYCG). We will do that by identifying savings and projected underspends in discussion with LAs. Making cuts over and above those identified as savings and underspends will be a last resort.
QHow will you determine where underspends and savings can be made?
A Officials from the Department, with Together for Children and the Architectural Consultants will contact LAs in the very near future to set out the process for identifying savings or potential underspends
QWill you make a percentage reduction to allocations for all LAs?
We hope that it will be possible to manage down the expenditure without the need to cut allocations beyond the identified savings and underspends.
Youth Capital Fund: £13m from reducing the grant by 50 per cent.
The £13m saving will be made by not paying quarter 3 and 4 payments to local authorities. LAs will be advised to ensure that they use their quarter 1 and 2 payments to fulfill any commitments already made.
QDoes this decision mean the Government does not believe in youth empowerment?
AWe recognise how important the YCF along with the Youth Opportunity Fund has been in giving young people choice and influence over facilities and spending decisions in their area, and after over four years of discrete investment in youth capital fund the benefits of doing so are clear for local services. Many local authorities are already building on that experience by involving young people in other ways and we expect this will continue.
We firmly believe that young people should continue to be central to decisions and discussions that affect them, including being at the top table, and not just there for tokenism but as integral to the normal consultation process. We are committed to making sure that young people are involved in consideration of future arrangements for youth provision.
Play Capital Fund
Why was the cut in play capital not announced on Monday 5th July, at the same time as other capital budget cuts were announced? Isn’t this a case of the Government trying to sneak cuts through without people noticing?
No. The level of savings needed this year to address the deficit is unprecedented, and the Government is having to make some difficult choices in order to achieve them.
The DfE press notice of the 5th July announced the need to reduce the Department’s end year flexibilities (EYF) of £1bn by the end of this financial year to help ensure no additional borrowing is required this year. Savings to specific capital budgets totalling £169.5m were confirmed in the press notice, however it was indicated that other additional savings would need to be achieved in order to meet the £1bn total required.
As a result, all capital programmes have to identify where savings can be made. We are entering into dialogue with local authorities to begin the process of identifying the level of savings to be made.
Do the recently announced cuts to capital funding and the £5m revenue cut announced in June prove that the Government is abandoning the play agenda, which consultations showed was so important to children, families and good childhood?
No. The Government continues to recognise the value of play to children and families; and the immense contribution of the voluntary and community sector, and Play England, in supporting this important agenda.
As the Secretary of State announced on 5th July, the Department has to reduce its End Year Flexibility (EYF) requirements to ensure there is no further borrowing this year. Play capital is supported by these End Year Flexibilities and so is having to contribute its fair share of the savings that need to be identified.
The cuts to this years play revenue budget will be achieved through reducing funding allocations to local authorities and also scaling back non-capital related play projects. We are discussing with our delivery partners how the package of support and the national evaluation can be cut back and targeted to achieve the best effect.
What will be the impact of the £5m cut in the play revenue funding?
For local authorities, the £5m savings will mean that playbuilders will receive no revenue funding this year and that pathfinders will receive 50% of what they were originally allocated.
Other savings will be achieved by scaling back non-capital programme related play projects. We are discussing with our delivery partners how the package of support and the evaluation can be cut back and targeted to achieve the best effect.
What will be the impact of the play capital cuts? How many play areas will not be delivered as a result?
This is yet to be determined. We will be entering into a dialogue with local authorities to determine the level of 2010-11 funding that has either not already been spent, or not contractually committed, since April and which can be saved. We will be seeking to enable authorities to complete play sites where construction work has already begun. We hope to have the issue resolved by end of August.
Will the Department be honouring the third sector Compact in making cuts to the play revenue budget?
The Department for Education bases all its conversations and dealings with the voluntary and community sector on the sound principles of Compact working. We take seriously our responsibilities towards the sector and recognise their valuable contribution in delivering our objectives on improving play opportunities for children and young people. The Prime Minister has confirmed the Government’s commitment to the Compact with the voluntary and community sector at the launch of the big society agenda on the 18th May when he stated that that; ‘he wanted to make sure the Compact really means something and that one of the early bits of work is to refresh and renew the Compact’