Ninety children a day are entering care, figures from the Local Government Association states.
The total number of looked after children reached a new high of 72,670 in 2016/17 - up from 70,440 the year before, representing the biggest annual rise of children in care in seven years.
The figures highlight the urgent need for the Chancellor to use his Autumn Statement next month to address the £2 billion funding gap facing children’s services by 2020, the LGA warns.
Without action, the numbers of children coming into care will continue to rise and councils will find it even harder to support them and their families.
Cllr Richard Watts, Chair of the LGA’s Children and Young People Board, said: “Children’s services are at a tipping point with growing demand for support combining with ongoing council funding pressures to become unsustainable.
“Last year saw the biggest rise in the number of children in care for seven years. With 90 children coming into care every day, our calls for urgent funding to support these children and invest in children and their families are becoming increasingly urgent.
“Children’s services face a £2 billion funding gap by 2020. If nothing is done to address this funding gap crucial services that many children and families across the country desperately rely on will be put at risk.
“We are calling on the government to use the Autumn Budget to commit to fully funding children’s services and invest in improving services to ensure vulnerable children get the appropriate support and protection they need,” he added.
The LGA is also urging the government to invest in improving children’s services by devolving a proportion of the Department for Education’s £300 million budget for centrally-run improvement and innovation programmes to councils. This would help deliver an enhanced programme of sector-led support for children’s services.
The LGA argues that investment sector-led improvement is common place in other government departments, including DCLG and the Department of Health, and has proven to be highly effective and calls for a similar approach to be taken with children’s services.