National 'care bank', not market solutions, can avert cash crisis

Kathy Evans
Tuesday, November 8, 2016

Many sector voices have been speaking overtly about a serious crisis in council children's services.

There has been the National Audit Office (NAO) report citing "systemic rather than just local failure" and criticising a perceived lack of urgency or strong leadership from the Department for Education to address it. That report prompted the public accounts committee to call an urgent hearing to interrogate the department's plans. A Unison survey last week found that 88.5 per cent of social workers do not believe government plans for social care reform address the concerns the profession is facing.

Several commentators, including Sir Paul Ennals and Professor Ray Jones, have critiqued the NAO for failing to do justice to the complexity of the crisis; for not spotting the correlation between family poverty, local deprivation and spiralling demand; and for not "joining the dots" that connect huge increases in child protection registrations with the scale of service cuts beneath the threshold for statutory intervention. The sirens of a systemic crisis are also being sounded from other points of the care system.

Lord Justice Munby has issued a public warning that the Family Courts Division is being stretched beyond its capacity to deal with the sheer volume of new care order applications. He issued a separate warning about the numbers of children being sent by English councils to Scottish secure units, highlighting just one aspect of rapidly rising demand for urgent "high risk" placements that is overwhelming the existing capacity of residential care and child and adolescent mental health services (CAMHS). If we add these two warnings together, we get a picture of there being not enough places to care well for the children already in the care system, and of impending numbers of yet more children about to enter it. This is the true anatomy of our systemic crisis.

Many charitable and private organisations are approaching financial tipping points that are poised to trigger a wave of provider closures and insolvencies. A great deal of concern is often directed towards "profit-making" by private care providers; rarely does anyone publicly worry about the "iceberg" of debt at the heart of the business models on which many private providers are operating. But it is those business debts, and the bleak prospects of repaying them on the fees from such severely strained council budgets, that create the real risk of market collapse.

It is true to say that simply throwing money at the problem would not be enough to solve it. Systemic failure requires a systemic redesign. But it would be dishonest to pretend that Whitehall cuts to council grants are not the greatest single accelerant of the current crisis. It would be completely inadequate to the scale of the problem to pretend that we can locally innovate our way out of this crisis. And it would be downright irresponsible not to sound the loudest possible warning klaxon that today's crisis pales in comparison to the scale of the crisis that will ensue if the government persists in its Spending Review plans to end all Whitehall grants to councils by 2020. If implemented, this disastrous public spending plan will mean that nobody's income taxes (collected nationally by the Treasury) will pay a penny towards the costs that all councils will have to bear in meeting their essential duties for children's welfare and protection. This cannot be right or fair, nor can it stand a hope of being sustainable for local children's services stretched to breaking point by cuts already.

We cannot sleepwalk into an era when the life-saving services that vulnerable children rely on are left entirely to the whims of local council tax and business rate collection. Leaders must urgently grasp and avert this prospect. To redesign the national framework for resourcing and improving children's services requires serious public service spirit and imagination. The answer cannot be outsourced to Deloitte, KPMG or "the marketplace".

Children England is publishing my discussion paper suggesting a radical new idea for funding and commissioning care. It would create a national "care bank" to fund the costs of all placements (kinship, foster, residential and adoption) directly from the nation's income taxes. It would free social workers and councils to make care pathway decisions led by children's best interests rather than the need to ration a council's budget. It would free councils to devote their locally raised resources to services that can help strengthen families and keep children happy and safe at home. It would give children a greater say over where they want to live while in care, and place a focus on reducing the human and financial damage of multiple placement breakdowns.

This idea is just another starter for discussion. I hope there are other big ideas out there, and that in publishing ours, we may only unleash a great and timely debate about what it would take to rethink a system that is failing too many, and facing a dystopian future if unreformed. I hope you will share them. There has never been a more important time to do so.

Kathy Evans is chief executive of Children England

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