Funding of local authorities’ children’s services Contents


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

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”.

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.

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.

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.

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.

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.

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

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.

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.

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.

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