The inquiry, which is being conducted by the housing, communities and local government select committee, will hear evidence from people working in the sector about whether they are able to fulfil their statutory duties with current levels of investment.
The group also wants to hear about the financial challenges of providing non-statutory services, and how investment can become more sustainable in the long and short term.
It also wants to discover what innovations and approaches local authorities are using to stretch their finances.
The committee published figures suggesting spending on statutory children's services had increased by 3.2 per cent between 2010/11 and 2016/17. However, overall spending on children's services fell by seven per cent in the same period due to cuts for discretionary services such as Sure Start.
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Labour MP Clive Betts, chair of the committee, said: "Over the last decade, services such as Sure Start and youth services have been significantly cut back as local authorities have targeted urgent services over long-term prevention."
The announcement comes as research published by the Association of Directors of Children's Services published research warning that funding for early help - key provision within children's services - could end with the close of the government's Troubled Families programme in 2020.
The report estimates that local authorities face an average of shortfall of 10.4 per cent in their children's services budget for the current financial year, 2018/19. The deadline for evidence submissions to the committee is 18 December 2018.