MPs urge £3bn council funding injection in Spending Review

By Nina Jacobs

| 01 May 2019

A funding boost of at least £3.1bn is needed to stem a children's services crisis in England, a cross-party group of MPs has warned.

HCLG committee chair Clive Betts MP says the current funding gap is unsustainable

The urgent call for action follows consistent warnings from local government that children's services are at "breaking point" and the government should back local authorities with funding that meets demand.

Children's services leaders today welcomed the key recommendations of the housing, communities and local government (HCLG) committee, whose report concludes only increased central government funding in the next spending review, as well as systemic change, can help prevent the crisis from deepening further.

The report says the government should announce a successor programme to its Troubled Families initiative ahead of the 2019 Spending Review to provide local authorities with certainty over their long-term funding streams beyond 2020.

"In the current financial climate, many local authorities are reliant on the Troubled Families programme to provide non-statutory early help services. As the funding is due to expire in 2020, it is essential that the programme is continued," it states.

The report also recommends that the Home Office pays local authorities a day rate for children whose families have no recourse to public funds.

This should be equal to the rate paid for unaccompanied asylum-seeking children, which should also be increased, it states.

Labour MP Clive Betts, who chairs the HCLG committee, said supporting vulnerable children was one of the most important duties provided by local authorities.

"Over the last decade we have seen a steady increase in the number of children needing support, whilst at the same time funding has failed to keep up.

"It is clear that this approach cannot be sustained, and the government must make serious financial and systemic changes to support local authorities in helping vulnerable children," he said.

The committee is urging a settlement that will deliver non-ringfenced core grant funding up until 2025 to increase by £3.1bn to reflect the increased demand on children's services.

"It is clear that current funding levels are unsustainable; local authorities are responding to increasing demand and decreasing spending power by prioritising child protection work and reducing spending on non-statutory children's services.

"Despite these efforts, most local authorities are still overspending on their budgets on children's social care. Financial restraint combined with seemingly ever-increasing demands on the sector is leading to what has been described as a ‘perfect storm'," the committee concluded.

However, it said increased funding alone "will not lead to a sustainable children's services" and should be introduced together with systemic and strategic changes such as reviewing the key factors driving the demand for children's services.

The report says that between 2008 and 2018, the number of looked-after children increased from 59,400 to 75,420 and the government should consider whether there was scope to reduce demand nationally.

"Where there isn't scope to reduce demand, for example if increased need necessitates it, local government must be appropriately and flexibly resourced," it says.

Further key recommendations include supporting social workers and care staff to tackle high turnover and improve retention in the children's social care workforce.

Core funding should be increased by the government to enable local authorities to ease the pressure facing social workers and the reasons for staff leaving their roles, such as high caseloads, should be better understood.

The committee recommends better commissioning and procurement to improve the children's residential care market and provide better value for money.

It says barriers to creating more residential care placements should be considered to increase supply and calls on the Competition and Markets Authority to investigate if there was a case for greater regulation.

Anne Longfield, the children's commissioner for England, said that increasingly, funding was being spent on children at "crisis point" and less on preventing and tackling problems sooner - when it is "cheaper and when early help is most effective".

"Not only is this unsustainable financially, but is also lets down the many vulnerable children who are not receiving the help they need.

"This hard-hitting report highlights the risks of continuing to starve children's services of the vital funds they need to protect our most vulnerable children," she said.

The Children's Society said the government had been repeatedly warned by their organisation and other charities that children and young people were being failed by "devastating" funding cuts to children's services.

"Vulnerable children face complex challenges, including everything from drug and alcohol misuse and domestic abuse, to going missing, facing mental health problems, or living in poverty as they seek to secure their right to remain in this country. 

"Funding cuts mean that too often councils are left firefighting emergencies with costly and undesirable interventions like care placements," said Sam Royston, the charity's director of policy and research.

Children England said it welcomed the committee's call for a minimum of £3.1bn additional core funding from central government for councils to reinvest in children's services over the next five years, a move that it - together with a number of supporting organisations - had been calling for since 2017.

The charity said there were "fundamental problems" with the current marketplace approach to procuring placements and care providers and backed calls for a government-led review.

"Even with great complexity and diversity in local children's services, the breadth of different evidence and perspectives that the inquiry gathered, and the fact that the committee itself is a cross-party body, one very clear and urgent message emerges.

"There is simply no getting away from the fact that austerity policies are leaving thousands of children and families and many essential local services at absolute breaking point," said Children England chief executive Kathy Evans.

The Children's Services Development Group (CSDG), a coalition of independent providers of care and specialist education services for children and young people with complex needs, said: "The committee's call for local and central government to do more to understand the drivers of demand is of paramount importance, and more must be done to ensure there is the capacity to meet the services required."

The coalition said it supported the committee's recognition that outcomes-focused commissioning and procurement was essential to meet a young person's needs.

"CSDG is campaigning for the implementation of a commissioning approach that is based on needs not cost, via the development of a National Outcomes Framework.

"This would benchmark all providers on value, quality, cost and outcomes to support effective outcomes-based commissioning," it added.

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