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'Uncontrollable factors driving variation in children's spend'

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Evidence has emerged that debunks the government’s claim that financial pressures on children’s social care services are caused by council inefficiencies, according to the Local Government Association.

A report by Newton Europe, commissioned by the LGA and published today, found factors largely outside the control of councils are key drivers of significant variations in spending on children’s social care services.

The research found spending on children’s social care per child varies between £292 and 1,254 per year, based on revenue outturn reports for 2016-17.

The largest areas of spending on statutory services for looked after children and safeguarding are also the areas where spend varies the most.

Researchers analysed 28 national demographic, economic and geographic measures and identified five factors which they said explains the majority of spend variation.

The ‘income deprivation affecting children index’ (IDACI) measure was found to be the most significant factor as it explained 31% of the variation in spend.

When IDACI is combined with four other factors – 0-25 population size, disposable household income, unemployment, and crime – the model explained 50% of variation, the report said.

It concluded that variation is therefore “inevitable” and “it is not logical to expect councils to converge on a single ‘right’ value spend”.

The LGA said further analysis is needed to identify further causes of variation, with work ongoing to gather evidence, while researchers said variations in accuracy of how revenue outturn reports are compiled by councils makes it difficult to do a like-for-like comparison of spending between councils.

The report identified the treatment of grants, coding of spending and the allocation of central overheads as the key areas of inaccuracy.

watts richard

watts richard

Richard Watts

Chair of the LGA’s children and young people board Richard Watts (Lab) said it is “frustrating that inconsistent financial returns continue to hinder efforts to easily compare the cost of delivering services in different areas”.

He added councils’ claims that the children’s social care system needed further funding was not “cutting the mustard” during negotiations with the Treasury and other government departments.

Cllr Watts, who is also leader of Islington LBC, said: “This report is an effort to fundamentally debunk the argument that the variance in spend is due to local authorities’ inefficiency and wholly controllable by [them] and if we just sort that out then there is no pressure on the system.

“That is not true and now have a highly credible report that says that.”

The link between deprivation and funding for children’s services was acknowledged in the 2006-07 funding review, when a ‘top up’ was included in the relative needs formula based on deprivation measures.

But Cllr Watts said this mechanism had not kept pace with changes in population.

The report did not identify a correlation between investment in early intervention and spending on children’s social care relative to population of 0-25s, although researchers said the analysis was not designed to do this. The report added this does not mean spending on early intervention, which is being scaled back due to funding pressures, is ineffective but “analysis of national data is insufficient to draw conclusions”.

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Readers' comments (1)

  • Does anyone know where the report can be accessed? Oddly no mention on the LGA website.

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