Summary
Local authorities in England deliver a range of statutory and non-statutory services for children at an annual cost of around £9 billion. Our inquiry sought to find out whether the funding for this vital aspect of local authorities’ remit is sufficient to enable councils to fulfil their statutory duties, deliver non-statutory duties (e.g. early help services) and secure the long-term sustainability of local authorities’ children’s services. It is clear that it is not. We heard about a system at breaking point, increasingly reliant on the goodwill of social care professionals; the children supported by or in the care of councils are some of the most vulnerable in society and deserve better. We hope our recommendations for change will act as a catalyst for the Government to co-operate with local authorities to secure the short and long-term sustainability of these services.
Our key recommendations and conclusions detailed below are divided into two key areas: central government funding and systemic change.
(1) Central government funding
- The 2019 Spending Review settlement must reflect the increased demand and pressures on local authorities’ children’s services; the Government should bridge the existing funding gap for local authority children’s services. At a minimum, un-ringfenced core grant funding up until 2025 should increase by £3.1 billion in total.
It is clear that current funding levels are unsustainable; local authorities are responding to increasing demand and decreasing spending power by prioritising child protection work and reducing spending on non-statutory children’s services. Despite these efforts, most local authorities are still overspending their budgets on children’s social care. Financial restraint combined with seemingly ever increasing demands on the sector is leading to what has been described as “a perfect storm”.
- When designing one-off grant funding, the Government should take a long-term strategic cross-government approach and ensure that the application and administration of such funding does not place an unreasonable administrative burden on council and that capital and other support is reaching all local authorities either directly or indirectly if they wish to participate in such programmes.
Local authorities would benefit from greater long-term certainty about the availability of one-off grant funding. The impact of such funding could be improved if government departments share their expertise and aims, and pool their funding. Applying for one-off grant should not be overly burdensome nor disadvantage some local authorities.
- The Government must announce a successor programme to the Troubled Families Programme in advance of the 2019 Spending Review to provide local authorities with certainty over their long-term funding streams beyond 2020.
In the current financial climate, many local authorities are reliant on the Troubled Families Programme to provide non-statutory early help services. As the funding is due to expire in 2020, it is essential that the programme is continued.
- All new burdens on local authorities’ children’s services must be financed adequately. The Government should evaluate its process for understanding the financial burden of new statutory duties on children’s services and consider how it could be made more accurate. The funding for new burdens should be reviewed regularly and the cap on the number of reviews per year should be reviewed in order to avoid any delays in adjusting payments if necessary.
It is unrealistic to expect local authorities to successfully deliver new responsibilities without appropriate funding, and long-term inaccuracies in funding are likely to have a significant impact on local authority budgets.
- A day rate payment, equal to that of unaccompanied asylum seeking children and payable by the Home Office, should be introduced to enable local authorities to better support children within no recourse to public funds families.
- The day rate payment for unaccompanied asylum seeking children should be increased.
Local authorities should not solely bear the burden of financially supporting children within no recourse to public funds families, particularly as councils are often required to provide long-term support as a result of Home Office delays in deciding immigration cases. Moreover, the day rate for unaccompanied asylum seeking children is insufficient.
- The Government should increase core funding in order to enable local authorities to ease the pressure facing social workers.
- The Government must conduct a consultation to gain a better understanding of the pressures facing social workers and why social workers are leaving their roles. Based on the consultation, the Government should assess the merits of options (e.g. limiting caseloads, reducing the administrative burdens, and nurturing supportive cultures) to lessen the burden on children’s social workers as a matter of urgency. We expect the Government to report back to the Committee by December 2019.
- We believe that the Government should fund the creation and implementation of a national recruitment strategy to encourage people into the sector.
High turnover and low retention of the children’s social care workforce point to a system that isn’t working well. Children pay the price as professional relationships break down. It has a cost for local authorities who resort to filling vacancies with agency staff and may, if financially viable, have to spend money on attracting staff. Social workers are suffering from a range of pressures such as increased workload and administrative burdens.
- Innovative initiatives should be seen as pilots with successful programmes systematically rolled-out to all local authorities with the appropriate long-term support and resources.
While innovation cannot solely be responsible for delivering sustainable children’s services, innovation which not only improves outcomes for children but also enhances financial sustainability is to be embraced by, and rolled out to, every local authority with the appropriate funding to ensure successful implementation.
(2) Systemic change
- Increased funding will not solely improve sustainability; it goes hand in hand with systemic, strategic changes.
The sooner systemic changes are made, the sooner local authorities will be able to deliver both the long-term financial sustainability for children’s services and the best outcomes for children. The key systemic changes we recommend are detailed below.
- The Government should review the key factors driving demand to consider whether there is scope to reduce demand nationally and assess methods for reducing demand by December 2019. Where there isn’t scope to reduce demand, for example if increased need necessitates it, local government must be appropriately and flexibly resourced.
Demands on children’s social services have been increasing each year for well over a decade and it is undoubtedly putting financial pressure on councils. Without a better understanding of demand it is impossible for local authorities and the Government to anticipate care needs and budget effectively – the key to long-term sustainability.
- The Public Accounts Committee’s recent recommendation calling for the Department for Education to publish information concerning variation in spend and practice by December 2019, should be implemented. The National Audit Office should also independently continue to look into the reasons behind variation in spending and activity.
Limited variation in spend on children’s social care and differences in the numbers of children taken into care may be expected but the high level of divergence is concerning and suggests the practice of local authorities is very different, although the reasons why are unclear. While reducing spend per child must not be a goal in itself, best practice that emerges from this analysis should be disseminated nationally.
- The Government should consider the barriers to creating more residential care placements to increase supply.
- There may also be a role for greater regulation of the children’s care market to ensure that costs do not rise disproportionally and that there is appropriate competition. The Competition and Markets Authority should investigate this market.
- A review of the commissioning and procurement system, which also assesses the merits of the various improvements, should be conducted by December 2019. The Government and local authorities should introduce greater oversight of how different care placements affect outcomes for children and their value for money.
Local authorities are highly reliant on the independent sector, particularly for children’s residential care. Costs are increasing but it’s unclear why. Given this reliance, it is imperative that the market works well and that commissioning and procurement are improved to ensure no child is placed in unsuitable care settings.
Published: 1 May 2019