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Prince's Trust cash crisis

Charity claims new government funding will put a dent in its bid to help disaffected pupils.

A programme that has made a "significant impact" on the lives of hundreds of the most disruptive and disillusioned pupils in Scotland's schools is at risk because of new funding arrangements between national and local government, according to the Prince's Trust Scotland.

The charity also predicts that, under the concordat, it will have to spend more on administrative costs and less on frontline services.

This, it warns, will make it difficult to maintain its promise that 89 pence in every pound it receives will go directly to helping disadvantaged youngsters.

The trust is leading criticism of the SNP administration's decision to dramatically reduce ring-fencing. Other charities concerned about the changes include Barnardos Scotland, Children 1st and NCH Scotland. The Prince's Trust says it is largely supportive of the move to give councils more freedom to target funding on local priorities.

But it argues it would need a considerable amount of time - two to three years, rather than the months it has been given - to adjust to the new arrangements, scheduled to come into being in April.

However, the Scottish Government said the Prince's Trust had already had time to make the adjustments. A spokeswoman said that, in September 2006, the charity was advised that "it should give thoughts to seeking alternative funding".

The Convention of Scottish Local Authorities said removing ring-fencing would not lead to councils "suddenly abandoning projects". But Finlay Laverty, of the Prince's Trust, said the new deal had put its xlerate with xl programme "under significant threat".

His warning comes as councils resume their deliberations on how to set their budgets by mid-February - a task very different, and potentially more difficult, this year, given the more flexible nature of their funding.

One of the streams of funding upon which the xlerate programme relies - the Youth Crime Prevention Fund - will cease to exist in April. While Determined to Succeed, another major source of funding for the programme, remains ring-fenced, there is no guarantee that local authorities will choose to spend it on xlerate.

Mr Laverty said: "The logistics of engaging with 32 different local authorities is structurally challenging in such a short space of time.

"I'm confident that we would be able to persuade local authorities that this programme is something that benefits both schools and communities. The uncertainty is whether we will reach all the local authorities in time."

He said the organisation would need to employ more back-office staff to deal with individual councils. At present, the initiative reaches 2,500 pupils in 126 secondaries, and exists in 31 of Scotland's 32 local authorities.

Full report, page 8.

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