Research Realities: Placing children in care

Social worker John Randall examines the findings of a study of the costs involved in placing children in care

Title: Costs and Consequences of Placing Children in Care

Authors: Harriet Ward, Lisa Holmes & Jean Soper

Publisher: Jessica Kingsley, London, 2008, ISBN 9781843102731


The empirical base for this study is the data relating to 478 children looked after for 20 months in six local authorities. The different unit costs of their care were analysed to produce The Cost Calculator for Children’s Services (CCfCS). In the early 1990s there was a lot of research activity focused on the costing of services for vulnerable adults following implementation of the NHS and Community Care Act 1990. This study builds on previous work in child care and demonstrates a substantial advance in our understanding of the variable costs of social care based on placement type, complexity of need and the overheads of the care management process. Nevertheless, this is essentially a work in progress as the project team and its participating local authority partners seek to refine the cost calculator tool and include costs from other agencies that are vital to the welfare of children in need.


The initial study focused on:

● Seeking explanations for the variations in costs between different child care placements in different local authorities.

● Asking whether those differences led to different outcomes.

● The next stage was to use the findings to establish a practical mechanism for local authorities to use themselves to improve their decision-making.

● A key part was trying to make transparent costs that have frequently remained hidden so that agencies have a better understanding of what is being spent on which children and to what effect.


The researchers used a prospective longitudinal study to examine the background, needs and experiences of 478 children looked after in six local authorities – two London boroughs, two shire counties and two unitary authorities. This was not a random sample. The children were all over the age of 10 and the sample was deliberately weighted to include disproportionate numbers of children with disabilities and of those in residential care because a random sample would not have provided sufficient data for meaningful analysis.

There were three sources of data – the local authorities’ management information systems, the child care files and interviews with children, young people and their carers. The findings of the project became the evidence base from which the Cost Calculator was built.


The costs of providing social care for looked-after children have two main elements. The more visible element is what is paid to the care provider whether in a family or residential placement. But what is less visible are the hidden infrastructure costs of the case management processes. The authors have identified eight key processes: ● Deciding a child needs to be looked after and finding a first placement.

● Care planning.

● Maintaining the placement.

● Leaving care/accommodation.

● Finding a subsequent placement.

● Review.

● Legal intervention.

● Transition to leaving care services.

However, when local authorities are compared there is considerable variation in such costs because of different local policies and practices – for example, some authorities set higher thresholds for admission – different types of placement and different levels of need.

In addition to obvious factors such as the age of children being cared for and the duration of their care episodes, the authors identified indicators of additional support needs that are likely to impact on costs. These were: physical and learning disabilities; emotional and behavioural difficulties, offending behaviour and asylum-seeking status. A substantial number of children displayed none of these indicators but others showed more than one.

There were six complex need groups:

● Children with disabilities and emotional and behavioural difficulties.

● Children with emotional and behavioural difficulties who also offend.

● Unaccompanied asylum-seeking children with emotional and behavioural difficulties. ● Children with disabilities who also offend. ● Children with disabilities with emotional and behavioural difficulties who also offend. ● Unaccompanied asylum-seekers with disabilities and emotional and behavioural difficulties.

Complex need groups often meant higher placement costs.

As an illustration of the cost variations identified, the study includes a table (p154) that gives the costs of social care for the 20 months of the study. These range from just under £50,000 for the most straightforward child with no identified additional support needs to £450,000 for one with a disability, emotional and behavioural difficulties who was also a young offender.

Sadly the children who appeared least likely to benefit were those with the greatest needs. Many of these had extensive and deeply entrenched needs and would have been likely to require intensive specialist services wherever they were placed.

The average unit cost of a child in residential care was 4.5 times that of a child in an independent living arrangement; eight times that of a child in foster care; 9.5 times that of a placement with family of friends; and more than 12.5 times the cost of a placement with the child’s own parents.

There were some surprises. Independent living arrangements turned out to be relatively expensive when all accompanying support costs were included. Residential costs varied across local authorities. One local authority showed that some agency residential placements could cost three times as much per week as others. And agency foster placements tended to be more expensive both to obtain in the first place and to maintain thereafter. Placements outside the area of the local authority tended to incur higher costs too because of the distances between home and placement and the travel involved.

A separate chapter is devoted to the Cost Calculator for Children’s Services. This is the analytical tool used to examine the empirical data and the basis of current work that seeks both to refine the calculator and apply to other areas of child care need.

Links and Resources:

● Beecham, J (2000), Unit Costs – Not Exactly Child’s Play: A Guide to Estimating Unit Costs for Children’s Social Care, University of Kent and Dartington Social Research Unit.

● Beecham J, Sinclair I (2007), Costs and Outcomes in Children’s Social Care: Messages from Research, Jessica Kingsley.

● Holmes L, Westlake D, Ward H, (forthcoming 2009), Variations in the Costs of Adoption: A Study of Practice in Four Local Authorities, Centre for Child & Family Research, University of Loughborough

● Knapp M, (1984), Children in Care: Planning without Costs, Nuffield Provincial Hospital Trust

● Packman J, (1968) Child Care: Needs and Numbers, Allen & Unwin

● Scott S, Knapp M, Henderson J, Maughan B, (2001), “Financial Cost of Social Exclusion: Follow-up Study of Antisocial Children into Adulthood”, British Medical Journal, 32: 191.

A demonstration version of the Cost Calculator for Children’s Services  



Analysis of Needs

A thorough analysis of children’s needs at the point of entry to care is fundamental to the efficient planning of services at both the individual and strategic level. Sometimes practitioners and agencies seem nervous about taking need seriously because they fear that they will be overwhelmed but a sizeable group of children in this study showed no evidence of additional support needs. However, there are other young people with complex needs and we need to know about those needs if we are to try and match them with appropriate resources.

Regular Review of Placement Costs

Disruptions are bad news for children and bad news for placing authorities because they lead to extra costs. The Cost Calculator provides a facility for ‘What If?’ analysis both for contingency planning and for looking at costing potential placement alternatives.

Potential for False Economies

There is a constant temptation for any public agency to cut costs to achieve short-term savings but that are likely to stack up longer term problems. The authors single out kinship placements as a case in point. There is a tendency to regard such placements as potentially cost free. Despite a legal judgement (R. v. Manchester City Council 2001) requiring local authorities to pay family and friends the same rate as non-related carers, financial discrimination remains a concern and there is evidence that kin carers sometimes miss out on additional allowances and access to training. They also suggest that the reluctance to look after young people with extensive emotional and behavioural difficulties who commit offences may lead to delays that subsequently lead to greater costs for both the individuals themselves and the placing authorities. When they come into care, the young people are more damaged, harder to place and more likely to move from one failed placement to another.

Towards a Systems Approach

When the Children Act 1989 was implemented a key feature was section 27 that pressed public agencies to collaborate for the sake of children in need. This study offers another reminder that social care costs are part of a wider picture. The costs of offering additional support in schools, treatment through child and adolescent mental health services, police, youth offending and children with disability teams all need to be included if we are to have an accurate picture of the true costs of care.

The Cost Calculator Model

The cost calculator has achieved a lot but is still in a development phase. Its use in time will presumably be extended to all placing authorities. Current work focuses on an attempt to reconcile the differences between ‘bottom-up’ costs – and this is how the cost calculator has been built – and the ‘top-down’ calculations of agency budgets. Essentially the cost calculator seeks to make transparent what were previously pretty opaque overheads. There is work to refine the model to make it more accurate and there are plans to extend the application of the model to education and health. Too often in the past agencies have been happy to displace costs on to each other. There is potential here not only to see children in the round but also the role of the corporate parent. “Holistic” then might just mean more than a fragile aspiration. One of the pieces of development work being undertaken is in relation to the costs of adoption and a report is due out later this year. This will be interesting because it is an area where costs continue to be pushed on to those providing adoption placements – one of the “false economies” referred to above.

John Randall is a post-adoption social worker with Families for Children, a voluntary adoption agency. He writes monthly reviews of recently published research articles for the Research in Practice Research and Policy Update


This  article is published in the 18 June issue of Community Care under the heading Placing children in  care





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