Smarter spending for children's services

1. Talk to families

Often the best ideas for saving money and improving services emerge from talking to children and families, says Sarah Gillinson, managing partner of the Innovation Unit, a social enterprise that supports councils to make service improvements.

This ethos of consultation drove the Transforming Early Years project, which launched in 2010 and involved six councils working with the Innovation Unit and Nesta (the National Endowment for Science, Technology and the Arts) to find ways of improving early years services while identifying savings.

"Instead of asking families how councils can improve services, we started from scratch and said: 'Tell us what your lives are like and what would help you and your children'," says Gillinson.

The main issues highlighted by families were social isolation, fear of authority and too many professionals involved in their lives. In Bradford - one of the council areas involved in the project - as many as 18 different professionals were working with one family. Families found explaining their stories over and over again demoralising and it was clearly not cost effective for the council, says Gillinson.

Changes included cutting the number of professionals working with families and appointing a lead professional to co-ordinate support. In addition, volunteers were recruited to encourage "hard to reach" families to seek support at an early stage. Such measures contributed to an average 25 per cent reduction in early years spending among the councils involved.

2. Avoid salami slicing

C4EO, the service improvement arm of the National Children's Bureau, is currently scouting for examples of good practice of service improvement on a tight budget. Among those councils to impress C4EO director of programmes Anne Marie Hassall is the London Borough of Lambeth, which has ditched its "salami slicing" approach to cost-cutting involving gradually chipping away at budgets. Instead, the authority has adopted a strategic approach, with three per cent of its children's services budget moved each year into early intervention work. "What Lambeth has done is very hard hitting," says Hassall, who says savings of between six and 10 per cent are anticipated through this focus on early support.

3. Keep families together

Three years ago, Essex County Council took the decision to close its children's homes and reinvest the money in frontline social work services to better support children at risk of coming into care.

The idea was this would help keep families together and reduce the number of children entering the care system, which would improve outcomes as well as slashing the county's looked-after children's bill.

Of the residential children's home money saved, £2m was used to set up Divisional Based Intervention Teams (DBITs) of social workers in May 2012 to support families with children on the edge of care.

Additional money was ploughed into the creation of Family Solution Teams. These emerged from the government's Troubled Families initiative and offer intensive support to families with complex problems.

Three years on, and the results in terms of keeping families together and cost savings have been dramatic.

Between April 2011 and December 2014, the number of looked-after children reduced from 1,604 to 1,100. This has contributed to a £11m overall reduction in Essex's looked-after children's accommodation bill, from £52.6m in 2010/11 to £41.1m at the end of 2013/14.

Overall, the total children's residential care bill, which still includes residential units for children with disabilities, fell from £7.8m to £1.7m between 2010/11 and 2013/14.

The latest evaluation of the DBITs shows £300,000 of savings in care accommodation since May 2012, which can be attributed directly to their work to keep families together.

Councillor Dick Madden, cabinet member for children's services, says without this focus on keeping families together, Essex would have faced an estimated extra cost of £55m based on the national rise in the number of looked-after children in recent years.

Other improvements include a reduction in the number of out-of-area placements from 27 per cent in 2009/10 to 23 per cent in 2013/14.

Children are also safer, according to Ofsted. Before the new emphasis on keeping families together, Essex's child protection services were the subject of a number of highly critical reports from the inspectorate. However, this year, Ofsted rated all services, including child protection, as "good" in its single inspection report.

4. Keep staff happy

A happy workforce that has manageable caseloads and is well supported saves money through reducing reliance on agency staff and recruitment costs, as well as ensuring frontline practitioners spend more time with each family. Madden says improving the wellbeing of social workers in the workplace was crucial to Essex's pursuit of long-term savings, even if it meant increased short-term costs such as hiring more social workers, IT support and management supervision.

"Three years ago, the highest caseload I came across was 100-odd. Now the average is between 15 and 20," says Madden.

Between October 2011 and October 2014, the use of agency staff in children's social care halved from 14 per cent to 7.1 per cent. Sickness rates among social workers also fell over this period, from 4.2 per cent to 3 per cent, and the number of staff vacancies fell from 26.5 per cent to 16.1 per cent.

5. Apply for lottery cash

Central government money to councils may be dwindling, but the Big Lottery Fund continues to offer sizeable sums to help councils improve outcomes for children. Early intervention has been a particular focus of recent grant programmes. In June 2014, five councils and their partners shared £215m in Big Lottery funding to improve support for children under three in areas such as nutrition, emotional development, and speech and language. Lambeth was awarded £36m as part of this funding package, which is being targeted at children in its most deprived wards.

The London Borough of Enfield is another council that successfully won Big Lottery money for early intervention work in children's services. Its £1m award in 2012 enabled it to launch its Family Turnaround service, which is run by 4Children and local voluntary organisation Enfield Parents and Children. This centres on six primary schools in the borough's most disadvantaged areas, supporting about 100 children in families with complex needs.

The council's assistant director of commissioning and community engagement Eve Stickler anticipates dramatic savings over the long term. "The spend on each child is roughly £10,000. But if you factor in the cost of that child going into care or custody, the savings are huge," she says.

6. Scrap age divisions

Prior to September 2013, Worcestershire's children's services were based around age, with separate commissioning focused on pre-school children, primary school age and teenagers, leading to a variety of disjointed support for members of the same family. But since then, the focus has been on the needs of the child rather than their age, with a 0-19 service commissioned along six district lines and provided by Action for Children, 4Children, Barnardo's and small local voluntary groups.

According to Worcestershire County Council's director of children's services, Gail Quinton, this approach has helped cut the council's children's services budget this year by £10.4m, with additional savings of £7m expected by 2016/17. Cutting staff numbers, particularly a reduction in management roles, was key, with 291 full-time-equivalent posts either made redundant or moved over to external providers between 2011 and 2014.

7. Get schools to do more

Many councils are looking to cut money from their school improvement budgets by asking schools to cover that cost through more self-evaluation and by commissioning support themselves.

Between 2011 and 2018, Worcestershire County Council expects to have cut its Learning and Achievement Services budget by £6m through this approach. Emerging evidence indicates this has improved school performance in the county. In 2011, the proportion of Worcestershire schools rated by Ofsted as "good" or "outstanding" was 70 per cent, but by 2014 this had risen to 89 per cent.

8. Sell your buildings

Increasingly, councils are looking to save money by reducing their property portfolio, including sites where children's professionals have traditionally worked. Worcestershire County Council has reduced its overall property portfolio by 20 locations by maximising its county hall campus and working with partners such as the police to share building space.

As a result, children's social workers operate in Worcestershire within a "hub and spoke" system. The hub is where all children's social workers are based, while the spokes are small teams of social workers working within schools, children's centres and other community venues. Gail Quinton estimates that even with extra funding for IT support for those based in the spokes, hundreds of thousands of pounds have been saved in property costs.

9. Use payment by results

There is increasing interest in payment by results as a way of achieving value for money in children's services.

Essex County Council uses a social impact bond payment-by-results model involving finance partner Social Finance and delivery partner Action for Children for the commissioning of its multi-systemic therapy, which provides intensive therapeutic support to teenagers at risk of coming into care. Launched in 2013, this system means Action for Children will be paid based on the number of care days saved through its work. Essex's director for local delivery, Jenny Boyd, anticipates total savings of £10m over an eight-year period from a reduction in young people entering care.

James Rook, managing director of Skylakes, the delivery arm of outsourcing firm Sanctuary, says payment by results also helps agency social workers provide value for money. If Skylakes' social workers carry out an initial assessment that is not of a high standard, it is either returned to them to be rewritten or they do not get paid for it.

10. Use agency staff wisely

Although agency social workers cost more per hour than staff, they can save money, particularly when used sparingly to support looked-after children living outside the council's boundaries.

Rook gives the example of one of Skylakes' council clients in the North East, which has 148 of its looked-after children living more than 50 miles from its borders. The furthest were in Kent and Sussex, which involved a two-day round trip for social workers just to attend an hour-and-a-half meeting. This also took them away from their other cases. Now, however, Skylakes provides a social worker who is "on the doorstep" and cheaper as they are only employed for a few hours work as opposed to two days.

11. Invest in volunteers

Volunteers should never be seen as a cheap way of replacing experienced children's professionals, says Anne Longfield, chief executive of 4Children.

Running an effective volunteer team involves substantial financial investment in support and training, she says. But their use can still save money, particularly by encouraging families with complex needs who are mistrustful of authority to engage with services at an early stage.

Evaluation of one such scheme in 2011 - Parents Supporting Parents - shows how using volunteers wisely can improve support and save money. An investment of £20,000 was made in recruiting and training 11 volunteers to deliver 380 hours of work over a six-month period at the Whitley Children's Centre.

The number of children reached by the centre increased from 31 per cent to 55 per cent over that time, despite the centre's budget being reduced by £34,000.

CASE STUDY: Derbyshire Reorganisation has helped save millions

Since 2010, Derbyshire County Council has slashed its annual children's services budget from £131m to £106m.

But rather than seeing a reduction in quality, a raft of recent evidence from the county suggests the move has improved outcomes for local children and their families.

The proportion of schools rated as good or outstanding has risen by 19 per cent since 2010 and there has been an 11 per cent reduction in children coming into care. In addition, the proportion of young people classified as Neet (not in education, employment or training) has reduced from 7.1 per cent to 4.8 per cent.

Ofsted is also pleased with the progress of services despite the budget cuts. In a single inspection report in February 2014, inspectors graded children's services as "good" across the board.

One of the most significant changes has been a reorganisation of children's professionals to form multi-agency teams, working across all age groups and based around school clusters. Crucially, these are cheaper to run as they involve fewer managers. The teams' focus on information sharing and partnerships with schools also saves money, as children at risk of coming into care can be targeted and supported at an earlier stage before problems escalate.

Ian Thomas, who was strategic director of children and younger adults at Derbyshire before taking up the role of director of children's services in Rotherham in January, says this reorganisation alone saved £1m on management costs and a further £3m through reducing the number of children coming into care.

"Schools are our eyes and ears, and working better with them improved early intervention work," he says.

Employing fewer staff enabled further savings by reducing the council's property portfolio. The reduction in property running costs shaved another £100,000 a year off the children's services budget. A more substantial sum was generated for the council's reserves through the sale of property.

Further savings were made by encouraging home and remote working, particularly among administrative and school advisory roles.

But Thomas is against encouraging home working among frontline children's social workers in high pressure jobs as they "need to be able to talk with others and reflect together each day".

Further reorganisation to save money and improve services is in the pipeline. The council is looking at developing integrated commissioning for children's health with neighbouring councils.

The authority is also considering plans to become a combined authority with its district counterparts in the county. "Turning the lights off at night can save some money, but the real savings are at a macro level combining resources and council structures," Thomas concludes.