Christmas is a time for children’s stories, usually a bit scary but with a happy ending.
For children’s services the scary bits are coming into focus and it is not clear where a happy ending may come from.
Almost 400,000 children across England are assessed as ‘in need’. Growing needs have caused overspends every year since 2010, exceeding £604m in 2015. The Local Government Association calculates there is now a funding shortfall of £2bn.
Until 2013 London appeared to be bucking this trend. Since then the costs of caring for children have accelerated and today a greater share of London boroughs are overspending by larger amounts than shire counties, or other first-tier authorities. London’s overspending hit £170m in 2015.
London Councils has conducted an analysis showing that in 2016, 27 London boroughs overspent by an average of £3.4m each; more than 10% above budget. The 23 boroughs with trend data since 2013 show overspending getting worse each year. The number with overspends has risen from 16 to 22 out of 23.
The problem is rapidly becoming critical as children’s costs drive up council spending and now account for 80% of all overspending in London. The costs pressures in looked-after children and safeguarding explain two thirds of the problem. These are not services where rationing is acceptable. The result is that vital early interventions have been cut back.
Drilling down into cost drivers, we found staffing and placing children in care were the biggest challenges. Recruiting is becoming ever-harder and agency staffing has increased 21% since 2013. In parallel, while the number of looked-after children placements remains around 9,000, the number needing the most expensive external placement has risen 13% and the cost of those placements has gone up by 23%.
It is not clear what is driving this growth in children’s needs. Many factors could be involved, from demographic change, through medical advances, to the impact of supply and demand on prices. Nor is it obvious why since 2013 London cost pressures have moved from below average to the highest level.
One thing is clear. As the cost pressures increase, so protecting the most vulnerable children has forced reductions in other budgets. Early intervention for children has been a casualty. Spending on children’s centres is down 58% since 2012 and services for young people, including youth work, is down 50%. Whatever started this cost spiral, cutting early intervention to fund urgent care may be turning a drama into a crisis.
The only credible happy ending this Christmas depends on the government acknowledging that its underfunding of children’s care has become as serious as its mistakes in underfunding adult care.
Dick Sorabji, corporate director for policy and public affairs, London Councils