Ofsted ratings do reflect local authority deprivation and spending

by Paul Bywaters, Calum Webb and Tim Sparks

One of the key children’s services policy fault lines in England in recent years has been whether deprivation or poverty have any influence over either the quality of family life or local authority children’s services.

Both families and councils have been on the receiving end of austerity policies since 2010. Cuts to in-work and out-of-work income and disability benefits, housing and support services such as children’s centres and youth work, coupled with flat lining in-work incomes and increasing income insecurity have pushed many families over the edge from just managing to not managing.

Meanwhile, expenditure on local authority children’s services has been radically reduced, with an average decrease in total spend of 14% between 2010 and 2015 despite rising demand and growing numbers of children. Moreover, the cuts have been much more severe in areas with high overall deprivation (21%) than low deprivation (7%).

Government narrative

Against this background you would expect it to be increasingly difficult for services to meet demand effectively, especially in high deprivation areas. However, the strong narrative from central government and its associated agencies has been the assertion that the performance of councils has nothing to do with either the influence of the level of deprivation on demand or the level of expenditure on services.

Take for example, comments made by Ofsted’s (now former) chief inspector Michael Wilshaw in his most recent annual report on children’s services.

Referring to the 25% of local authorities rated inadequate, Wilshaw wrote: “These weaknesses can be overcome through grit and determination and with good leaders, who make the work easier to do well. Our inspectors have seen this across the country and we now know that: Inadequacy is not a function of size, deprivation or funding, but of the quality of leadership and management.”

Similarly the report of the National Audit Office on children in need stated: “Our own analysis found no relationship between local authorities’ reported spending on each child in need and the quality of service as measured by Ofsted judgements.”

But is this true?

The research

We analysed Ofsted judgements of all 107 local authorities (LAs) inspected in the current round from 2013 to September 2016, out of the total of 150 (the City of London and the Isles of Scilly were excluded as too small to be meaningful for this purpose).

This is part of a much larger project on inequalities in children’s services intervention rates across the UK, funded by the Nuffield Foundation. We linked these data to measures of deprivation and spending and found that statistically significant relationships do exist.

Getting an accurate measure of children’s services expenditure is notoriously difficult. The Section 251 returns published by the Department for Education give an overall spend and then break down the spending into different categories such as looked after children or child protection services. But, when examined, there is limited comparability in what is included under each heading.

Therefore we have chosen as a measure of expenditure the total Children’s Services spend, including early years and youth services, per child in 2012/13, the year before the inspection round started.

We recognise that expenditure can vary quite widely from year to year, including as a response to Ofsted judgements. However, very similar results are found if expenditure is averaged over the five years from 2010 to 2015.

Factoring in deprivation

Deprivation is measured by the 2015 national Index of Multiple Deprivation (IMD) which rates and ranks LAs and smaller geographical areas. The Index covers seven different domains including measures of income, employment, housing and the environment. Using these ranks we divided all English LAs into high, mid and low deprivation groups, with a third of LAs in each group.

Over two in five (41%) of all low deprivation local authorities received a ‘good’ or ‘outstanding’ judgement, compared to one in three mid deprivation local authorities (30%) but only one in nine high deprivation councils (11%). By contrast, while one in five (21%) low deprivation local authorities were judged as ‘inadequate’, the proportion rose to almost one in three (29%) in the high deprivation authorities.

The difference in the likelihood of low and high deprivation local authorities getting a good or outstanding judgement is statistically significant. Because the population size of LAs vary, children’s chances of being in a good or outstanding LA was even more skewed. 55% of children in low deprivation LAs were in LAs judged good or outstanding compared to only 7% of children in high deprivation LAs.

Moreover, high deprivation LAs that did get a good or outstanding judgement spent more money than those judged inadequate. The population weighted average spend in those judged good was £1293 per child; when judged inadequate it was £993, a difference of 23%. Once again this is a significant difference.

Some high deprivation LAs may not have enough money to secure a good outcome. By contrast spend did not make an obvious difference to Ofsted outcomes in the low deprivation LAs.

Significant questions

This evidence raises two significant questions:

• How can the multiple effects of deprivation on families and therefore on demand for children’s services become central to debates about child protection and children’s services?
• Is the current level of expenditure on children’s services and its distribution between LAs fit for purpose, especially in more deprived LAs?

Continuing austerity policies and forthcoming fundamental changes to local government financing will make these questions even more urgent in the future.

So, of course, neither low deprivation nor high spend guarantees a good Ofsted outcome any more than high deprivation or low spend ensures a bad one. Other factors are at work as well as deprivation and expenditure. And, of course, Ofsted judgements are only one measure of quality. And, of course, we need better measures of expenditure than Section 251 returns.

But can we at least stop making simplistic assertions that deprivation and expenditure make no difference to quality?

Paul Bywaters is professor of social work at Coventry University. Tim Sparks is a professor in statistics at Coventry University. Calum Webb is a postgraduate research student at Sheffield University.