The Local Government Association (LGA) recently warned that a fifth of 151 local authorities were in danger of going bankrupt after several were forced to issue section 114 bankruptcy notices in 2023, most notably England’s largest council Birmingham.
Local government leaders and struggling councils point to the spiralling cost of delivering children’s social care services as a key factor in the deteriorating picture.
The financial challenges are affecting all types of councils, a recent report by the County Councils Network (CCN) revealed the projected funding shortfall from 2023-26 is expected to be £4 billion.
The CCN report states that 45% of the budgetary pressures driving these overspends is being caused by spending on children’s services and that spending on statutory services is set to rise to 60% by 2025, compared to less than 40% less than a decade ago.
These trends have been building for several years, and in 2016 a group of directors of children’s services (DCS) from CCN authorities began collaborating with Impower Consulting to develop a new approach to help reduce their spending on statutory services for children in care, one that focused on their needs, strengths and aspirations.
The view from this group of DCSs was that an approach and tool which allowed holistic needs to be described, captured, tracked and connected to costs could help to identify opportunities to improve outcomes for children and reduce the costs of care – supporting a different approach to practice and commissioning.
The Valuing Care approach and tool was then developed through collaboration and engagement with local authorities, practitioners, partner organisations, and children and young people. Hertfordshire, Oxfordshire, Norfolk and Lincolnshire councils were the first to develop and apply Valuing Care, successfully rolling it out for all their children in care, while another two – North and West Northamptonshire councils via their local children’s trust – have applied it across a further large cohort. In total, Valuing Care is being used in some form across 15 English authorities.
Valuing Care captures and tracks changes in needs over time at a child, cohort and population level. It then uses the information gathered through this process to make changes to support planning, home finding, provider engagement, commissioning and practice at a child and cohort level.
The aim is to improve outcomes for children and reduce costs by embedding a needs and strengths-led approach across the children’s social care system. This approach has helped local areas to drive impact on outcomes and cost in two key ways:
Providing valuable insight into the needs of children and young people over time and the connection with costs of care at a child and cohort level – enabling a different approach to engaging and managing care providers.
Using intelligence and insight on needs to identify and deliver opportunities to improve outcomes and reduce cost (e.g. stepdown to family placements and reunification, improving foster carer matching, permanence opportunities).
Impower has worked with CCN and the four original local authorities to aggregate and analyse data on needs, cost and demography for more than 3,500 children. This insight was further tested and developed through a roundtable with DCSs in September 2023, and was supplemented by a wider review of nationally available data.
The analysis found that sufficiency challenges and market factors drive costs more than the needs of children and young people. “There is very limited correlation between the needs of children and young people, the costs of their care and the type of care they receive, highlighting the necessity for rebalancing of placement provision across the system,” a report on the findings published last December by CCN and Impower states.
Half of children in the analysis did not have “severe” or “complex” needs, which the report authors say indicates that children living in residential settings could be supported to live with foster carers or reunified with their families.
The study also identified that a third of children have high levels of need around emotional health, healthy attachments and managing emotions. More than 80% of children and young people in care need support with their emotional health and in understanding their life story. Needs related to emotional health, positive relationships, educational progress and self-care become more critical as length of time in care increases.
In addition, children with education, health and care plans had higher placements costs.
Understanding and quantification of the needs of children living in different forms of provision can help to improve approaches to sufficiency planning, commissioning and market shaping for the future.
Local authorities using and applying the Valuing Care approach have established a community of practice and shared learning. This group also sponsors and supports the development of research on care and sufficiency.
Impact
All four local authorities that participated in the study reported reductions in costs linked to children receiving more appropriate levels of care.
However, CCN and Impower came together to undertake the study – the first direct analysis of the efficacy of the Valuing Care approach – in recognition it could support the delivery of some of the government’s reform agenda.
In particular, the findings provide learning for Regional Care Cooperatives (RCCs) to plan, commission and deliver care places. CCN and Impower say there is the potential for Valuing Care to contribute to this by “allowing local authorities to collaborate and coalesce around shared data on needs and cost – and to use this data to manage and shape regional markets”.
Similarly, there is the potential for Valuing Care to provide a national framework for understanding and quantifying the needs of individuals and cohorts, and for this information to be used to manage and work with providers and the care market to better connect needs and the costs of care. The Children’s Social Care National Framework and Dashboard proposed in Stable Homes, Built On Love presents an opportunity to support this.
“I can see… RCCs working if we have that joint strategy, that joint approach, and we have a firm foundation. And that’s where Valuing Care comes in because it’s an evidence-based tool,” one DCS states in the report.
“It’s helping us to formulate what our children and young people need.”
- Valuing Care report, Impower and CCN, December 2023, www.impower.co.uk
