Children’s services at breaking point – Government must back local authorities with funding that meets demand say MPs

Constricted funding and ever increasing demand have left children’s services in England at breaking point, a report published today by the Housing, Communities and Local Government Committee has found. Ahead of the 2019 Spending Review, the report calls for a funding settlement that reflects the challenges local authorities face in delivering children’s social care, and recommends a minimum increase to core grant funding of £3.1 billion up until 2025.

The report calls for the following:

• The Spending Review 2018 must reflect the challenges facing local authorities and core funding should increase by a minimum of £3.1 billion
• Increased funding must go hand-in-hand with systemic change if local authority children’s services are to be sustainable in the long-term
• More work needs to be undertaken to understand and address the factors driving ever increasing demand for children’s services.
• Barriers to creating greater residential care placement capacity should be investigated and addressed
• The Government must better understand the pressures facing social workers and the wider care workforce to improve recruitment and retention

Committee Chair, Clive Betts MP, commented:

“Supporting vulnerable children is one of the most important duties that local authorities provide. It is vital that we have the right support available in every part of the country, to ensure that vulnerable children get the support they need. Over the last decade we have seen a steady increase in the number of children needing support, whilst at the same time funding has failed to keep up.

“It is clear that this approach cannot be sustained, and the Government must make serious financial and systemic changes to support local authorities in helping vulnerable children. They must understand why demand is increasing and whether it can be reduced. They must ensure that the funding formula actually allows local authorities to meet the obligations for supporting children that the Government places on them.

“We have reached a crisis point and action is needed now.”

They key conclusions and recommendations include:

Increased funding

While local authorities are responding to financial and service pressures by prioritising child protection work and reducing spending on non-statutory children’s services, the majority are still overspending their annual budgets.

• The 2019 Spending Review settlement must reflect the increased demand and pressures on local authorities’ children’s services. At a minimum, non-ringfenced core grant funding up until 2025 should increase by £3.1 billion in total.

• 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.

• 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.

Creating systemic change

Increased funding alone will not lead to a sustainable children’s services. It must go alongside systemic and strategic changes.

• The Government should review the key factors driving demand children’s social services, which have been increasing each year for well over a decade. Between 2008 and 2018, the number of looked after children increased from 59,400 to 75,420. It should consider whether there is scope to reduce demand

Supporting social workers and care staff

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.

• The Government should increase core funding in order to enable local authorities to ease the pressure facing social workers. It should better understand why social workers are leaving their roles and consider options (e.g. limiting caseloads) for lessening the load on this vital workforce as a matter of urgency. 

Reducing the costs of using independent providers

The independent sector constitutes a significant part of the children’s residential care market, and this comes at a financial cost to local authorities. There needs to be better commissioning and procurement, to improve the market for residential care and provide better value for money.

• 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 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.