Understanding £2bn funding gap

Derren Hayes
Tuesday, October 31, 2017

Council leaders plan to analyse social care spending to show the funding shortfall in children's services

Children told Ofsted that they feel they are receiving less help and support from their carers than in previous years. Picture: Brian Jackson/Adobe Stock
Children told Ofsted that they feel they are receiving less help and support from their carers than in previous years. Picture: Brian Jackson/Adobe Stock

Children's minister Robert Goodwill admitted at the National Children and Adult Services (NCAS) conference in October that "council budgets are under pressure" as a result of rising demand for children's social care.

However, speaking to CYP Now after his conference speech, Goodwill said no additional funding for children's social care has been sought from the Treasury in the lead up to the Budget on 22 November, and that additional resources are unlikely until councils make better use of what they already have.

"We're hearing around the country that more money is needed, but we need to ensure [existing] money is being deployed effectively," he said.

Delivering more efficiency in public services has been a regular refrain of ministers over the past seven years, one local government leaders say no longer holds. A Local Government Association report warned that without urgent funding, "crucial services many children and families desperately rely on will be put at risk".

Funding gap

The Association of Directors of Children's Services (ADCS) has also called on the government to "act quickly" to address the £2bn funding gap in children's services that it has been estimated will exist by 2020.

But Goodwill cited analysis showing there is little correlation between how much a children's services department spends and their Ofsted rating. "Some authorities delivering the best children's services are doing it in a very cost-effective way."

In particular, the DfE is concerned some councils are spending too much on agency staff, out-of-area care placements and last-minute foster care placements. Goodwill says the department is doing "forensic accountancy work" to assess the cost of some of these services (see box).

But Edwina Grant, children's improvement adviser at the LGA, warns that it is "really difficult" to get reliable data that can be used to compare council spending.

The association is working with consultants Newton to understand the factors that influence spending. It will undertake detailed analysis of spending in eight local authorities, across a variety of geographical and size types, over the next six months to understand the variations in spending.

Earlier analysis by the LGA found significant variations in spending among children's services rated "good" by Ofsted - the top 10 rated councils spent more than £1,042 per child, while the bottom 10 spent less than £585 per child.

"This poses some interesting questions," says Richard Lum, public sector business manager at Newton. "It's hard to get under the surface of why some authorities spend £1,000 and others £500.

"What we want to do with this analysis is understand the reasons behind the variation in spending and the more fundamental question of why on the surface spend does not appear to correlate with results."

National and local factors

Lum adds there are national and local factors that will influence this, in addition to data quality factors. He says the evidence needs to show there is no correlation, otherwise there won't be a "robust argument" for more funding.

The urgency of the spending analysis is encapsulated by ADCS vice-president Stuart Gallimore, who at a different NCAS conference session explained some of the stark choices he is facing in East Sussex where he is DCS.

"We feel the pressure to do the right thing, but we don't have the funding," he says. "If government does not provide the money we need by 2020, we'll only be able to respond to children who are being harmed. That's the reality."

He added that meeting the needs of looked-after children will continue to be prioritised, "but in so doing, there will be further reductions in universal support services". "We're now in a position where to maintain a good level of statutory service, I'll potentially have to stop doing things that it makes sense to do."

Some DCSs say the DfE believes the children's services funding gap to be substantially lower than that suggested by the LGA research. It wants the sector, led by the LGA's analysis, to come up with the evidence to prove otherwise.

Data must aid practice, not be used to shame councils

By Dez Holmes, chief executive, Research in Practice

Too often, data has been experienced not as a tool for improvement but rather as a stick with which the sector has been prodded.

For many years, under various governments, data has meant unachievable targets, divisive league tables, a preoccupation with process and managerialism. It has meant "heatmaps", "hotspots" and over-intervention; associated with shame and blame, inadequacy, and complex payment-by-results.

Added to this is the loss of data capacity within local authorities. We have too few data analysts, even fewer data scientists.

Before we can assert any correlation (or lack of) between children's services expenditure and their Ofsted rating - or between Ofsted rating and children's outcomes - we need to improve our use of data. This requires a climate of trust and confidence. These initiatives aiming to interrogate data must also ensure that capacity is developed within local areas; and efforts to generate new data should adopt a co-production approach enabling appreciative inquiry.

To grasp the "narrative behind the numbers", experts must engage those who understand the realities of practice.

Lastly, we must recognise practice wisdom, and the voice of children and families is also a vital source of data.

CYP Now Digital membership

  • Latest digital issues
  • Latest online articles
  • Archive of more than 60,000 articles
  • Unlimited access to our online Topic Hubs
  • Archive of digital editions
  • Themed supplements

From £15 / month


CYP Now Magazine

  • Latest print issues
  • Themed supplements

From £12 / month