Four in five councils overspent on children’s services budgets last year

Council leaders are warning of ‘unsustainable’ pressures on children’s services budgets after new research finds more than four in five were overspent in the last year.

The analysis, carried out by the County Councils Network (CCN), finds that 30 out of 36 (83%) county local authorities overspent on their budgets by a total of £317m. Nationally, all 151 councils with children’s services responsibility overspent by £946.5m.

They say this is due to a surge in young people coming into care in the wake of the pandemic. With numbers of children in care at a record high, council leaders warn the funding committed is inadequate to effectively tackle the scale of the challenge.

The analysis is outlined in a report, released as part of the CCN’s County Spotlight series, containing 18 case studies from across the country showing how local authorities are managing demand.

The analysis showed children in need referrals increasing in county areas by 8.8% post pandemic, rising by 16,030 between 2020-21 and 2021-22 – sixteen times higher than the rise of 1,044 between 2018-19 and 2019-20, the year immediately before the pandemic.

The number of children in local authority care in county areas increased by 1,079 young people over the same post-pandemic period: a 10.1% year-on-year rise. This is in contrast the months directly before the pandemic, when there was a decrease of 140 children requiring local authority care in 2019-20. Nationally, the number of children in council care is at a record high of 82,167 in 2021-22 – up from 66,180 in 2011-12.

Echoing warnings from the Care Review, the report warns the number of foster carers has fallen dramatically year-on-year. The number of applications received by councils across England totalled 3,665 in 2021-22, down from 5,095 in 2020-21 – a 28% decrease. In county areas, the number of applications to councils fell from 2,750 to 1,885 over the same time – a 31% decrease.

Council leaders say this creates a ‘vicious circle’ as they prioritise young people and families in crisis, rather than focusing on preventive and early help services. They say this stores up problems for the future, but they have had little choice owing to budget pressures.

“These concerning figures illustrate once again the impact of the pandemic and the cost-of-living crisis on vulnerable families. The latest figures show a surge in referrals, as well as higher numbers of children being taken into care,” Cllr Keith Glazier, Children’s Services Spokesperson for the County Councils Network, said.

“Faced with this spike in demand, most councils in county areas have had little choice but to overspend on their children’s services budgets to protect young people. Councils are being creative within the limits of their options: today’s report illustrates many great examples of how councils have invested in services, transformed ways of working, and undertaken social worker and foster carer recruitment drives over the past few years.

“But four in five county authorities overspending is unsustainable. Council leaders know we are in a vicious circle where scarce funds are prioritised towards young people in crisis, which is why we welcomed the government’s emphasis on prevention. But £200m committed to reforming services does not go far enough, and we are calling on the next government to prioritise greater investment into early help and family services.”