Criticism as cash for children in care is kept by councils

• Cathy Jamieson said she was 'incredibly dissapointed'. Picture: Ian Rutherford

The Scotsman has learned that at least 20 of Scotland's 32 local authorities failed to give children in their care 100 top-up payments owed to them under the government's Child Trust Fund scheme. Councils are legally obliged to pass on the money to children for every year they are in care since April 2008.

However, an investigation revealed that only nine in Scotland had done so by March this year, two years after the top-up scheme was introduced.

The failure to make payments has been attacked by children's charities.

Alison Todd, director of Children and Family Services for Children 1st, said: "The decision not to pass on the top-up payments to children in care is questionable.

"Children who are cared for by their local authorities are amongst the most vulnerable children in Scotland. We would expect them to be given more, not less, financial support than someone living at home with their parents."

An initial freedom of information request found only nine of the 29 local authorities that responded had passed on the payments to children in their care. Further investigations revealed those nine included Angus, Inverclyde, East Ayrshire, East Renfrewshire, Renfrewshire, North Lanarkshire, Falkirk and Clackmannanshire.

Edinburgh and Dumfries and Galloway said they have only recently made the payments.

A spokesman for the Convention of Scottish Local Authorities (Cosla), which represents Scotland's 32 councils, admitted that there was "no legitimate reason" for the payments to be withheld and pledged that councils would now make sure back-payments were made to the children involved.

"In looking into what has happened, it would appear that there has, unfortunately, been a breakdown in communication in relation to the payment of top-ups by a number of councils," the spokesman added.

However, Dr Graham Connelly, of Strathclyde University, whose initial research uncovered the problem said: "It has been frustrating trying to get councils, Cosla and the Scottish Government to address this issue. Progress has been very slow."

Dr Connelly, who sits on the board of Who Cares (Scotland), a charity for children in care, said that his calls to Cosla and the Scottish Government had received a slow response until The Scotsman became involved this week.

He also pointed out that late payments of the trust fund would mean that children would lose out from interest and investment accrued on the funds.

The Child Trust Fund scheme was set up to give each child born on or after 1 September, 2002, a payment of 250, creating a pot of money for their families to invest and add to, giving them capital assets when they became 18.

In 2006, former prime minister Gordon Brown decided to extend the scheme to give additional help to children in care, topping their funds up by 100 a year.

The treatment of Scottish children contrasts poorly with those in other parts of the UK. In England, children in care have received direct payments from the government of 100 into their funds. The Welsh Assembly doubled the money and some councils there increased it by a further 100.

Last month Chancellor George Osborne announced in his emergency Budget that he would end all Child Trust Fund payments.

The Labour Party partly blamed the failure to pass on the money on the confusion caused by the concordat – the deal between local authorities and the SNP government,which gave local authorities freedom over their budgets in return for freezing council tax.

But the Scottish Government last night said all councils were duty bound to make the payments and that there should have been no confusion with money unringfenced as part of the concordat agreement.

Labour MP Cathy Jamieson, who will raise the issue in Westminster and Holyrood, said: "I am incredibly disappointed that some of our local authorities have failed to look after the interests of our most vulnerable children. This money was given to the Scottish Government specifically for that purpose. This is another example of how the much celebrated concordat has simply failed to deliver."

Yesterday, some councils claimed that payments had been delayed because money had been late in arriving from the Scottish Government, while others said there had been administrative oversights.

A Holyrood spokesman said: "The Scottish Government made allocations, including backdated payments, to each local authority as part of the General Revenue Grant from April 2009. In advance, the Scottish Government wrote to every local authority in February 2009 explaining their responsibilities along with advice on how to make the payments and to whom." z