Special Report: Sector warns about future of childrens services funding

Concerns about the future of childrens services funding ramped up a gear this month when leading charities warned that thousands of children are being put at risk due to cuts while a separate survey found that one in four councils are planning to reduce their spending activity in children's services.

Five of the largest children's charities Action for Children, Barnardo’s, NSPCC, The Children’s Society and the National Children’s Bureau warned that that thousands of children and young people could fall into crisis if cuts to children's services continue.

They published an analysis which revealed that funding available for children’s services has fallen by a third per child in England since 2010. The charities also identified “kids’ cuts hotspots” across England – where local councils have faced the biggest real-term drop in this funding, with London being the worst hit.

Stripped back

The top five councils which have suffered the largest cuts are all in the capital. Westminster was the hardest hit with funding slashed by more than half (51%), followed by Tower Hamlets (49%), Camden (49%), Newham (46%) and Hackney (46%).

However outside of London also experienced significant cuts with Manchester seeing a 45% drop, and both Nottingham and Birmingham experiencing a 43% fall.

The charities warned that many services having already been stripped back or shut down. Over 1,000 children’s centres have closed since 2004, while 760 youth centres have shut since 2015. The charities are warning that thousands more children and young people could fall into crisis if these cuts continue.

Yet the analysis praised councils' efforts to try and protect children's services as best they can – with spending falling by less than the funding drop. This could be down to local authorities making up the difference by drawing on reserves or slashing spending on other areas – but the charity alliance stressed neither approach is sustainable in the long term.

Children are at risk

Chief executive at Action for Children, Julie Bentley, said: “Children’s services are at breaking point and these alarming figures reveal the true scale of the devastating and dangerous funding cuts made year after year by successive governments.

“Every day at Action for Children we see that children’s services can be a lifeline for families – from helping mums suffering with post-natal depression or families struggling to put food on the table, to spotting children quietly living in fear of domestic abuse or neglect. Thousands of families across the country rely on these services to step in and stop problems spiraling out of control.

“With the number of child protection cases and children being taken into care at their highest for a decade, it’s unthinkable to continue forcing councils to make crippling cuts to services. Without urgent cash from central government, thousands more children at risk of neglect and abuse will slip through the cracks and into crisis," she added.

Earlier this month, the Local Government Information Unit (LGiU) annual State of Local Government Finance Survey of council leaders found that children's services and education is the top immediate financial pressure they face amid cuts and financial uncertainty.

Twenty four per cent of council leaders surveyed by the thinktank said they are looking to reduce activity in children's care services due to budget constraints.

Legal challenges

The report found:

- Eight in 10 councils say they are not confident in the sustainability of local government finance and none said they were ‘very confident’.

- 97% of councils plan to increase council tax in 2019-20, three quarters by more than 2.5% (the maximum increase without a referendum is 3% in most places).

- Over half of councils plan to dip into their reserves this year and 40% of councils plan to use their reserves two years running.

- Almost one in 10 councils are anticipating legal challenges this year due to reductions in service provision.

- Children’s services and education is the top immediate financial pressure for the second year running (36% of councils), ahead of adult social care (23%) which has historically ranked highest.

Jonathan Carr-West, Chief Executive of LGiU, said: "Uncertainty piled upon uncertainty: we have been running this annual survey with the MJ since 2012. We know that council funding is broken. Eight out of 10 of those people leading English local government tell us it is unsustainable. This year we see that we are no closer to finding a solution.

"Councils are making do by increasing council tax as much as they can, increasing charging and dipping in to their reserves. And even with these desperate measures they are having to reduce spending; not just on vital place-shaping services like leisure, libraries and parks but in core life-saving areas like social care and children’s services.

"Now more than ever we need a thriving, resilient local government sector to weather the storm of national uncertainty, but years of chronic under-funding has left local government on life support.

"So we urgently need a bigger debate about how and at what level we fund vital local services," he added.

High levels in care

The Local Government Association, which represents 370 councils in England, has long campaigned for children's services to see increased investment after years of cuts have put local authorities under immense pressure. According to the LGA, children's services face a £3 billion funding gap by 2O25 just to maintain the current levels of service.

Yet the latest figures show that the number of looked after children continues to increase to the highest level since the 1980s, with a total of 75,420 children in the care of councils in England.

The LGA says that the support necessary to keep children safe from immediate risk of harm can be extremely expensive, forcing councils to cut or end vital early intervention services which can help prevent children from entering care in the first place.

At the same time, the number of children supported through a child protection plan to keep them safe from harm increased by more than 2,700 over the past year - the biggest annual increase in four years, and an 84 per cent increase in the number of children on plans over the past decade.

"The continued absence of sustainable funding for children’s social care remains a grave concern. With record numbers of children in the care system and councils now starting more than 5OO child protection enquiries every day, we believe that the case for action has never been more compelling," said the LGA in its Bright Futures: One Year On report.

"Councils across the country are struggling to provide the support that children and families need with the resources available to them, leaving many unable to access help until they reach crisis point. Councils had to spend in excess of £8OO million more than they had budgeted for children’s social care in the last year alone. This cannot carry on," the report added.

Plug the funding gap

The LGA's Bright Futures campaign calls on the government to:

1) Plug the growing £3 billion funding gap for children’s services by 2O25
Children’s services are absolutely vital for many families, and must be fully funded to ensure vulnerable children get the appropriate support and protection they need.

2) Reverse the cuts to early intervention funding to local councils
Without this funding, councils have found it increasingly difficult to invest in the early help services, such as children’s centres and family support, that can prevent children entering the social care system, and help to manage needs within families to avoid them escalating.

3) Urgently review high needs funding for SEND
Many children and young people with special educational needs and disabilities could miss out on the high quality education they need if councils aren’t given adequate funding to manage the unprecedented rise in demand.

Growing demands

Meanwhile the Housing, Communities and Local Government Committee of MPs is currently taking evidence for its inquiry into the funding of local authorities’ children’s services. The inquiry will investigate what impact public spending has had on the provision of care services, and the approaches local authorities have taken in addressing funding constraints. It will consider how financial support for children’s services can be made more sustainable in the short and long term, and examine the potential for innovative approaches to the design and delivery of services.

The children's commissioner for England Anne Longfield told the committee this week: "There have been growing demands on the work that needs to be done, including on asylum‑seeking children, children who have been exploited sexually, and now we are looking at children who have been exploited with gangs. Against that, local authorities have not necessarily had extra funds for that, but as they try to make their budgets balance they have to look at their top-end statutory responsibilities, which mean they have to reduce the support earlier on. That may mean that problems continue to develop and move into crisis. It may also mean there are not as many options for those families in terms of statutory intervention or, indeed, stepping down after that intervention."

Stuart Gallimore, president of the Association of Directors of Children's Services, and director of children's services at East Sussex, told the committee: "All directors accept a responsibility to try to live within the means and the budget that has been agreed with the council. We are an outstanding authority. We are projected to be £3 million overspent by the end of the year. That has been driven by a relatively small increase in our looked-after numbers, but in terms of high-cost placements. That is despite the fact that we have a 50/50 mix in terms of residential care. We have just over 40 young people in residential care. Half of them we look after; half are in the independent sector. 82% of our fostering placements are in house. By Ofsted’s standard, we are well run, but we are seeing the impact of the things I identified earlier.

"We are also seeing the cumulative impact of some of those unfunded or underfunded new burdens that government have given us over time. Around special educational needs, rightly, there were aspirations around increasing our involvement from 19 to 25. None of that was funded. That is one of the highest growth areas for the increase in early help in education, health and care plans. That is a key driver," he added.

Funding cuts are a false economy

In response to the charities' analysis, Mr Gallimore said: “Here is yet another report illustrating the increasing pressures facing children and the services they rely on across the country. For how long will our unified calls for proper investment in children and their futures go ignored?

“There are more children in our society than ever before yet they are not being prioritised in policy decisions made in Whitehall. Since 2010, local authority budgets have been halved but the complexity and level of need in our communities has increased. As the report notes, local authorities must fund statutory child protection services where need exists but this has been at the expense of vital preventative and community services that prevent children and families’ needs from escalating, such as children’s centres, youth services and libraries. At the same time, life is getting harder for many; families are struggling to afford basic necessities; food banks are running out of supplies; schools are providing their pupils with clothes and even sanitary products, despite facing significant funding pressures of their own; and, child poverty is rising, driving further demand for our services. Correct me if I’m wrong but this doesn’t sound like a country that works for all children. Local authorities are committed to doing all we can to improve the lives of children and their families but only changes to national policy will make the difference.

“While some local authorities have benefited from small, time limited pots of ring fenced funding this is neither a sustainable nor an equitable way forward. It does nothing to meet the needs of the system as a whole. Government must go beyond rhetoric of improving children’s life chances by investing a greater share of this country’s resources in them and their futures, but in the right way. We urge government to put children at the heart of the upcoming spending review by committing to a no deficit model of funding for children’s services with early intervention at its core. Without this, the human and, financial, costs will be huge," he added.

Chief executive at The Children’s Society, Nick Roseveare, said: “Vulnerable children are continuing to pay the price as councils face a toxic cocktail of funding cuts and soaring demand for help. This shocking analysis lays bare the enormous scale of this funding challenge, which is making it near impossible for councils to offer vital early support to children and young people to prevent problems escalating.

“Funding cuts are not only an inhumane economy, they are also a false one. The reductions in early help for children they lead to simply intensify the need for more costly interventions further down the road - like taking children into care as they face growing risks, including everything from substance misuse and mental health problems, to repeatedly going missing, and being sexually or criminally exploited.

“The government now faces a stark choice at the next Spending Review: either continue to leave councils short of the money they need to keep children safe, or address the funding gap and give some of our most vulnerable young people hope of a brighter future," he concluded.

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