Rising cost of children’s social care and its impact on councils – Education Committee quizzes experts
Amid fears that rising demand for children’s social care is pushing local authorities into financial distress, the Education Committee will question experts on how effectively the market is functioning.
Children’s social care is increasingly being cited by leaders of councils, which deliver and commission services, as a growing pressure on their budgets. Research by the Local Government Association in 2023 found that councils spent £4.7bn on the services in 2022-23 – £670m more than forecast. The vast majority of councils’ funding comes from central government grants.
Meeting details
Among reasons for the soaring costs are the increasing number of children diagnosed with complex needs such as trauma, mental health problems and neurodiversity.
Councils have also seen hikes in the cost of procuring residential accommodation from private providers. The Children’s Charities Coalition says that between 2012-2020 75% of children’s social care costs came from residential care. 2023 research for Pro Bono Economics found that between 2010-11 and 2021-22 spending on residential care rose by 63%. A 2022 report by the Competition and Markets Authority (CMA) said private providers were making “materially higher profits” than would be expected if the market “were functioning effectively”, while some were also carrying high levels of debt, posing risks to the stability of supply.
Local authorities are also finding it harder to recruit qualified staff. The Children’s Homes Association labelled the sector’s workforce “crisis” as “one of the most significant barriers to increasing sufficiency [of places].”
The cross-party Committee will question witnesses who represent local authorities – the Association of Directors of Children’s Services, the Country Councils Network, and Hampshire County Council. The latter has said insufficient specialist NHS mental health services has seen high needs children pushed into mainstream social care. MPs will also question the CMA and providers of children’s homes about problems facing the market that are causing costs to rise.
The Committee will ask witnesses about problems in the sector and the effectiveness of the Government’s interventions. These have included trialing a system where planning and commissioning of services happens at a regional level and in collaboration between councils and other agencies, through new Regional Care-Cooperatives. There have also been policies to promote apprenticeships for care leavers, to set up Family Hubs, and ministerial guidance that council planning policies should promote the development of new residential accommodation.
The 2024 Spring Budget saw the Government allocate £500m more to councils for adults’ and children’s social care, and an additional £165m to create 200 more children’s social care placements.