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Ashley McDougall: The three pressures facing children's services

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Children’s social care is a genuine conundrum.

Almost alone among local government services, children’s social care has raised spending since 2010. But when we look at demand we find that referrals to children’s social care have grown only slightly faster than population since 2010. Rates of children in need have actually fallen since 2010.

Despite this, children’s social care was overspent by £872m in 2017-18 and finance directors place it at the top of their worry list. These factors are the reason why we carried out the study we are publishing today.

We found that there are three areas of real pressure in the sector: external demand, local variation and resourcing.

On external demand, while the rate of children in need has fallen since 2010, the real financial pressure has come from the cases of greatest need.

Numbers of looked after children have risen by almost triple the level of population growth, up 15%. With foster care placement episodes averaging £27,000 and residential placements averaging £46,000 per child, each of these cases is both a child in desperate need and a massive additional financial commitment for a local authority.

The overall financial and activity pressure leads to the question of how different local authorities respond. We expected to find wide variations between local authorities for costs and activity, but they were nonetheless dramatic.

For example, in 2017-18 assessments conducted by authorities when they consider a child to be at serious risk of harm range from 58 to 482 per 10,000 children. In the same period the numbers of children being looked after range from 23 to 185 per 10,000 children, while the average spending on each child in need episode ranges from £566 to £5,166 between authorities.

Historically, and anecdotally from the authorities we visited in our study, most of the variation is put down to deprivation, funding or austerity. We looked to see what actually explained variation between authorities in their activity, specifically for child protection plans but also for section 47 assessments. Our analysis was able to bring out the relative importance of factors, and the results surprised us.

Different levels of deprivation could account for only 15% of the variation. Meanwhile local authority characteristics, including custom and practice in children’s social care, and characteristics of children and their families, seems to account for roughly 44% of variation. This is after we allow for factors such as funding and staffing levels.

A further 10% of this variation may be accounted for by changed policies such as Staying Put, which means fostered young people can stay with their foster families when they reach 18 with the agreement of both parties. These affect all local authorities at the same time.

Taking the increase in activity and the variation between authorities together, we can then ask, is there enough funding to meet these pressures?

More money would always help, but the evidence above presents a more complex picture. There is little new demand, some greater complexity, more children where care is costlier, and great unexplained variations between authorities in how they respond to these pressures.

We do know how many authorities have tried to reconcile their pressures, activity, and resources. Some, like the Camden LBC, have managed through system redesign to keep numbers, and therefore costs, consistently below national growth levels for looked after children.

Many others have prioritised child protection work and reduced spending on non-statutory services. The proportion of spending on preventative services, such as children’s centres, fell from 43% in 2010-11 to 25% in 2017-18, a reduction of £1.7bn. Spending on statutory activities rose from 57% to 75% of total spending on children’s services over the same period.

We looked to see whether the £816m reduction in Sure Start spending on children’s centres since 2010 has led to more child protection cases. Where children’s centres had been closed we found no increase in child protection activity.

The Department for Education runs national policy for the children’s social care system. We were surprised to find that until recently, the department did not see it as a central part of its responsibilities to understand drivers in demand for children’s social care.

The department told us it is now increasingly interested in costs, value for money, and the sustainability of services across the sector. But it has not yet completed the work needed to fully understand the reasons for the increase in demand for children’s social care, and the relationship between this and local authority spending.

So there you have it: complex demand, unexplained variations, rising costs, and limited understanding of what this means for the resources required. Not all of these are crises, but understanding and addressing them all is increasingly urgent. We hope we have added some key insights to the debate.

Ashley McDougall, director of local service delivery and value for money studies, National Audit Office. The full report can be found at NAO.org.uk.

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