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Social services departments are facing their toughest financial year in over a decade, the president of the Association of Directors of Social Services has warned.

Pressures generated by the reform of children’s services, the Gershon efficiency review and increasing numbers of looked-after children have created "grave uncertainties" over budgets, said Andrew Cozens.

He added: "All the signs from our members, and the mixed signals we are receiving from central government, suggest that the coming budget round, leading to decisions about the council tax next spring, is likely to be a tough one for social care."

Accurate figures on the predicted cost of various services is not available because the ADSS was forced to abandon plans to publish its annual budget survey after it ran into a number of problems that included some councils counting Supporting People funding while others did not.

But trends identified by its research show that local authorities across England are dealing with rising numbers of looked-after children, as a consequence of Lord Laming’s inquiry into the death of Victoria Climbié.

Leicester Council has seen its number of looked-after children increase from 460 to 530 since Laming’s report in January 2003.

Bradford Council is building five new children’s homes to accommodate growing numbers of children. In a single weekend it took 14 children into care and was spending £10m a year on placing children in foster care outside the authority.

Uncertainties over how local authorities will meet the costs of people who have preserved rights once changes in the way it is calculated are also causing worries. At the same time concerns over the savings recommended by the Gershon review are dogging councils because the Department of Health has committed to an efficiency drive of 2.5 per cent, which amounts to £650m on commissioning of adult services.

"These worries and the greater inflexibility being imposed by the separating out of children’s and adult services budgets are all contributing to grave uncertainties within social services," said Cozens.