Children's residential care 'facing funding crisis'

The Independent Children's Homes Association (ICHA) has made the claim after its latest six-month survey of providers showed the sector is blighted by escalating costs, reduced fees and uncertainty for the future.

Of those surveyed, three out of 10 reported a fall in their reserves as councils stating that increasingly reluctant to pay for places.

The same proportion say occupancy levels have reduced and 15 per cent of providers say they have an occupancy rate of less than 60 per cent, with the ICHA saying in a statement that "there is intense effort by local authorities to contain or reduce fees, resulting in margins for some providers being severely challenged".

ICHA chief executive Jonathan Stanley said: "The survey shows there is a continuing financial crisis, every bit as large as the one affecting adult social care, being faced by children's homes.

"Incomes flat line, costs rise, meanwhile providers carry on caring. The continual attrition towards children's homes is neither just nor sustainable."

The ICHA said a national strategy is needed from government to help the sector better meet the needs of the most challenging children with complex needs.

Currently, many providers are cautious of taking such cases for fear that it will affect their Ofsted grades and prospect of future placements from councils.

This is leaving many local authorities struggling to find appropriate places for such children, the ICHA statement adds.

In July, a government-commissioned review into residential children's care by Sir Martin Narey made 34 recommendations to improve the sector, including greater collaboration by councils to bulk buy beds to address under occupancy and provide better value for money.

It emerged this week that the government is considering allowing councils to raise council tax bills to meet escalating costs in adult social care.