Labour analysis of Budget data shows children’s services overspending hits new high of £800 million a year

• Labour analysis of data released alongside the Budget shows that children’s social care spending exceeded budgets by £800m last year
• The over-spend is a new high, doubling since 2015, and accounts for nearly all of the total council over-spend in England
• Demand on children’s services has continued to grow year on year but government funding has been cut

Local authorities are now over-spending their budgets for children’s social care by £800 million a year, according to data published by the Office for Budget Responsibility (“OBR”) alongside this week’s Budget.

The analysis reflects rising pressure on children’s services and cuts to funding in recent years. In 2012-13 the overspend on children’s social care was only £100 million, reaching £400m by 2015 and doubling since.

Children’s social care now amounts to the vast majority of total over-spending by English local authorities, which the OBR found was just over £1bn in the last fiscal year.  

Services have been under increasing pressure, with figures released by the Government only last week showing that there were record numbers of children in need and children subject to a child protection plan.

However, funding to councils has been cut in half in real terms since the Conservatives came to office in 2010, and funds for early intervention ceased to be ring-fenced under the coalition government.

The additional social care funding announced in the Budget, which must cover both adult and children’s social care, is not enough to reverse the current overspend even if it were all spent on children’s services.

Budget small print also revealed that the separate ring-fenced fund announced by the Chancellor of £84m is spread over five years and only available for 20 councils, meaning it amounts to less than a million pounds a year per authority, and fewer than one in eight councils will benefit.

Commenting, Angela Rayner MP, Labour’s Shadow Secretary of State for Education, said:

“The Prime Minister promised that austerity was over, but it is clear that the most vulnerable children in society will continue to suffer for years to come.

“The huge increase in overspending on these vital services is a direct result of rising demand for services and ideological Conservative cuts from Whitehall, detached from the real impact of their decisions.

“The next Labour government will provide councils with sustainable funding and create a ring-fenced £500m fund for Sure Start, so that councils can deliver the services our communities need.”

Notes to Editors

• An analysis of council spending by the Office for Budget Responsibility published in the Economic and Fiscal Outlook found that councils were overspending by £800 million on children’s social care
  Source: Office for Budget Responsibility, Economic and Fiscal Outlook: October 2018, 29th October 2018. See Chart 4.10,English local authorities’ under- and over-spending against revenue budgets by service area, in charts and tables: fiscal
  https://obr.uk/efo/economic-fiscal-outlook-october-2018/
• The Government announced additional spending, combined on children and adult’s social care, of £285 million in 2018-19 and £775 million in 2019-20. 
  Even if all of this money was spent on children’s social care, and there was no increase in the over-spend, it would not put councils in a position where they did not need to overspend on these services.
  See HM Treasury, Budget 2018, Table 2.1: Budget 2018 policy decisions, p36
  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752202/Budget_2018_red_web.pdf
• The Government also announced a £84m fund for children’s services improvements but this is spread over five years and available only for up to twenty councils. 
  See HM Treasury, Budget 2018, paragraph 5.18, p75
  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752202/Budget_2018_red_web.pdf
• According to the National Audit Office, councils have had their central government funding cut by 49.1% in real terms between 2010-11 and 2017-18.
  https://www.nao.org.uk/wp-content/uploads/2018/03/Financial-sustainabilty-of-local-authorites-2018.pdf
• Government figures show that the number of children supported by a child protection plan to keep them safe from harm increased by more than 2,700 in the past year, to a record high of 53,790
  See Local Government Association, Biggest increase in children on child protection plans in four years, 25th October 2018
  https://www.local.gov.uk/about/news/lga-biggest-increase-children-child-protection-plans-four-years