Why we need to turn the tide of children’s social care spending
New analysis from the Children’s Charities Coalition shows that local authorities are spending more than ever on children’s social care, after years of decline. It sounds like good news, but is it?
How is that money being spent, what does it tell us about the state of the system, and what does this mean for children?
Local authorities in England spent £12.2bn on children’s services in 2022/3 – over a quarter of their budgets. This increase is due to a big jump in spending following years of decline and then steady growth.
Find out more about the report from The Children's Charities Coalition.
The increase in spending over the past couple of years has been partly due to some positive steps taken by the previous government.
Initial funding was provided to help rebalance the system towards early help including for Family Hubs and Family Help, and to make improvements to the care system.
However, despite the government’s efforts, the system is becoming increasingly more skewed towards the crisis end of the spectrum – child protection interventions, and care.
Spending on early intervention services like children’s centres, family hubs, family support services and services for young people has nearly halved since 2011.
Meanwhile spending on late intervention services like youth justice, child protection and children in care has increased by 57%.
Spending on residential care placements is largely driving this increase. It is now greater than the total amount spent on all early intervention services combined (£2.4bn vs £2.2bn), having risen by 89% in 12 years.
This provides further evidence that, in many cases, the system isn’t meeting children’s needs in an appropriate and timely way.
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1. The rise in spending is partly explained by a rise in demand.
There has been a 28% increase in the number of children in the care system since 2011. There are a number of reasons for this, including an increase in the number of unaccompanied asylum-seeking children, and, possibly, the number of children living in poverty (which increases the risk of care-entry) [1].
Over the same period, the number of children in residential care has doubled, while the number of children in foster care placements only increased by around one-fifth (18%). This is partly due to children entering care older and with increasingly complex needs (such as mental health issues and exposure to risks outside the home such as exploitation by criminals) [2]. For many of these children, residential care is likely to be the most appropriate option – they may need specialist support.
Research by Ofsted shows that residential care was part of the intended care plan for just over half of the children in their study [3]. This means that for the other half, other placement options may have better suited children’s needs but weren’t available.
2. There aren't enough of the right types of placements, in the right parts of the country, to meet children's needs.
Overall, the care system in England is failing to deliver the homes that children need to have the best chances of thriving, recovering from any trauma, and maintaining vital relationships with their friends, families and communities.
3. Residential care placements are becoming increasingly expensive overall.
Research shows that the number of placements costing £10,000 or more per week has risen by more than 1000% in recent years [4]. Rising costs are partly due to the increasing dominance of large private sector providers. Alongside a lack of the right placements, high-costs are also symptoms of a poorly functioning market.
Too much about the market is broken… the [local authority] don't really have much say… you have to find a placement. And the market is so scarce that you are sometimes forced to take what you think probably isn't the right thing, but the alternative is nothing else.
Assistant Director of Children’s Social Care
The need to provide homes for a growing number of children in care, combined with a lack of placements and high costs, ultimately means that there’s less money available to spend on early intervention.
Local authorities are expected to have a range of early help services co-ordinated across different providers that meet local needs.
But there is no legal requirement to provide those services and no specific funding attached to help local authorities meet that expectation.
Local authorities do, however, have a legal duty to provide many services associated with more acute support, like homes for children in care.
In making sure that these essential statutory services continue to be provided, local authorities have faced incredibly difficult spending choices regarding non-statutory preventative services (despite the role those services can play in reducing the risk of care-entry).
More and more local authorities are in financial crisis after a severe and sustained decline in funding over the years.
What needs to change?
The children’s social care system
The government needs to urgently invest in the children’s social care system. This is so local authorities can better-meet current need and deliver the necessary rebalancing of the system towards earlier intervention.
To support the rebalancing of the system, we want to see the introduction of a statutory duty to provide early help services. This would help protect services from budget cuts and provide a level of consistency of services across the country.
The government should help local authorities and the voluntary sector to grow their residential care and fostering provisions. This would increase the health and diversity of the market and reduce reliance on high-cost private sector residential placements.
The government also needs to better support local authorities by providing the conditions needed to create positive change through leadership, preventative culture and collaboration.
Child poverty
Tackling poverty should be a key part of the plan to reduce the number of children entering care.
The government’s commitment to a new child poverty strategy signals a welcome change of direction. To be successful, we think that strategy should have a strong focus on two broad goals:
- Fixing the social security system by scrapping the Two Child Limit and Benefit Cap policies that are the key drivers of rising and deepening levels of child poverty. And restoring the system to an adequate baseline by investing in the child element of Universal Credit.
- Supporting low-income families to overcome barriers to decent, secure work by strengthening work incentives in the social security system, reforming sick pay, carer leave and welfare conditionality and providing improved job-seeking and childcare support.
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