Spending on children’s services has risen sharply in the last
year, mainly due to the rise in the number of children in care.
What are the alternatives to successive overspend crises, asks
Motorists will know that you can get more miles out a car than
you think after the fuel gauge has started flashing, before having
to fill up with petrol. The fuel gauge for children’s social
services hit empty months ago, but, much the same as cars, they’re
still chugging along on borrowed time – and money.
A budget survey by the Association of Directors of Social
Services, council treasurers and the Local Government Association
at the beginning of the year revealed that of the projected social
services overspend of £200 million for 2000-1, 64 per cent was
attributable to children’s services.
According to the Department of Health, gross expenditure by
local authorities in England on personal social services was just
over £12 billion in 1999-2000, an increase of 11 per cent on
the previous year. Services for children and older people accounted
for nearly three-quarters of the total
Why are children’s services in the fast spending lane? A
critical explanation is the rise in the number of children in care.
Government figures show that at the end of March 2000 this stood at
58,100 in England – 5 per cent higher than the previous year and 18
per cent higher than in 1994.2
There are several factors accounting for this rise:
professionals are more aware of signs of abuse; family breakdowns
are occurring more often; the birth rate has gone up; disabled
children live longer. This paints a picture of greater pressure on
When you then add to this the cost of residential care, highly
expensive specialist care for children with complex needs, secure
accommodation, children coming into care younger and staying
longer, the increase in court orders which are costly to
administer, and the increasing costs of foster care as more local
authorities are forced to use independent agencies because of a
lack of in-house carers, it’s not surprising that children’s
services have overtaken, and in some cases lapped, other social
That’s not forgetting the extra pressure of children in need and
child protection responsibilities, says Brian Parrott, chairperson
of the ADSS resources committee. The DoH children in need survey
last year showed this group had increased by 10 per cent from 1997
to 400,000 children.
Putting these factors to one side, there are also workforce
costs to contend with, mainly due to the number of vacancies in
children’s services. High cost agency staff and enhancements to
entice hard-to-recruit social workers add to the staffing costs of
children’s services budgets as well, says Parrott.
Meanwhile, independent fostering agencies have jumped into the
driving seat, and this is causing one of the greatest headaches for
local authorities. While they tempt foster carers away with
promises of better financial reward and support, local authorities
are left paying more for effectively the same service.
The fostering budget is the main pressure on Newcastle Council’s
children’s social services. In 1998-9, it spent £3.4 million
on fostering and adoption placements. For 2000-1, this jumped by
£1.9 million. Meanwhile, the number of fostered children rose
by less than 15. It all points to rising unit costs, says Paul
Woods, head of finance at Newcastle Council.
Like most, Newcastle Council is struggling to retain sufficient
in-house foster carers and is reviewing the foster care allowance
to try to keep them. But it is finding that a rising number of
children are being placed with the independent sector.
“We have to pay them two to three times what we pay our in-house
carers. Some of that care is specialist, but some of it is standard
made necessary by the lack of in-house foster carers,” says
Mike Leadbetter, senior vice president of the ADSS, first raised
the issue of foster carers going over to the independent sector
four years ago. Several foster carers in Essex, where he is the
social services director, had left the council in favour of a
private fostering company paying them four times as much and
promising 24-hour support.
“We had to choose to disrupt the placements or continue to pay.
It was three times as much to use the same foster carers. We
learned that if foster carers went across we couldn’t guarantee
that we wouldn’t move the child otherwise the budget would be
totally out of control,” says Leadbetter.
“Only last week managers were telling me about their concerns –
not so much about those foster carers we can pay enhancements to
because they have done training accreditation, but about those we
haven’t had the finance available to put through training. Managers
are worried that they might be tempted.”
In response to this fear, Essex has used the child and
adolescent mental health grant and part of the revenue released
from closing a children’s home to set up a clinical support team
with a 24-hour helpline for foster carers. Early indications are
that it has improved the situation.
“Local authorities are having to swallow hard and pay up because
they need a placement,” says Clive Sellick, senior lecturer in
social work at the University of East Anglia.
“I still think the independent sector is offering a
distinctively better service than many local authorities. For
example, every agency in our survey offered training, respite care
and round the clock support to foster carers.”
Sellick and a colleague were commissioned to conduct a survey of
independent fostering agencies in England, Wales and Scotland by
the Joint Forum of Independent Fostering Agencies, due to be
published in the autumn. The survey received replies from 55, about
half the estimated total.
Contrary to local authority opinion, results suggest that
independent agencies are not tempting away their foster carers.
According to the survey, only one third of independent foster
carers came directly from local authorities.
They “rear rather than poach” foster carers by paying realistic
fees and offering high quality support services which attract, and
then retain them, says Sellick.
So, can local authorities do anything to offset the costs of
children’s services? While they continue to spend significantly
more on children’s services than allowed for in the government’s
standard spending assessment (SSA), the temptation is to siphon
money from other areas where spending is more in line with the SSA.
This is typically from budgets for older people or disabled adults,
with the knock-on effect of insufficient money to support people
coming out of hospital.
John Ransford, head of social affairs, health and housing at the
Local Government Association, says: “The children’s SSA is
completely wrong and out of date and everyone spends massively over
“It’s the problem of quantity and quality. If you pay for
quality and the quantity rises, then by definition you pay
The LGA and ADSS are telling government it has to look at the
special features of social services generally and children’s
services in particular.
“It has pumped additional money into health services and
education services. It will argue that it has increased SSA, but
nothing like in other areas,” reasons Ransford. “Most of the
additional money we have got has been in specific grants for
particular purposes, like Quality Protects. We are talking about
general core issues that social services has to deal with.”
Children’s services have always been running to stand still,
says Leadbetter. “We have never had the money to seriously invest,
from the inception of the Children Act 1989,” he adds.
Last month’s news of a £7 billion underspend on public
finance, of which £700 million relates to the DoH, may add
grist to their mill. As the paymaster of social services
departments, the government could be using that money to relieve
pressure on social services departments, and ultimately on their
As it is, local authorities are facing more difficulties in
2001-2, says Parrott. A more substantial ADSS budget survey
currently being analysed is expected to confirm the particular
spending pressures in children’s services.
As Ransford rightly argues: “You can’t refuse to protect
children from abuse because of budgetary problems. There are
enormous cost pressures that have to be dealt with somehow.”
The government ignores the flashing warning light for children’s
services budgets at its peril. As they pull in for a four-star fill
up, it’s time the government got out its credit card – there will
be no other breakdown recovery organisation passing.
1 Department of Health, Personal Social
Services Current Expenditure in England: 1999-2000, DoH,
2 Department of Health, Statistics on
Children’s Social Services in England: Year Ending 31 March
2000, DoH, 2000