Costs of children in care hit £3.4bn

The spending watchdog’s briefing on councils’ expenditure on looked-after children revealed that a 12 per cent rise in the children in care population from 2010 to the end of March 2013 had pushed the total bill to £3.4bn during 2012/13.

The briefing highlights “significant variation” in the amount each council spends. The average spend on looked-after children across all councils came to £137 a day, or just over £50,000 for the whole year.

However 21 councils spent less than £40,000 a year per looked-after child, and 32 councils spent more than £60,000.

Local differences in foster care commissioning was identified as a key factor. The Audit Commission found that shortages of local carers pushed costs up as councils rely more on out-of-area placements and on fostering agencies, which were on average a third more expensive to use than in-house council fostering services.

Those councils that bulk purchased care and set up rosters with a wide variety of care suppliers also tended “to get a better price,” the Audit Commission said.

Audit Commission chair Jeremy Newman called on councils to work better together and focus on joint commissioning to push prices down.

He said: “'Councils should use their collective purchasing power to get maximum value for the £1.5bn they spend on foster care.