Funding Pressures

Under Pressure: Children’s Services Finances

  • By SamiraIslam




With the aim of improving our understanding of the financial pressures facing children’s services, London Councils commissioned a study by the independent research consultancy Isos Partnership. The researchers analysed detailed financial data from the London boroughs and undertook extensive qualitative fieldwork among London children’s services departments, focussing on Children’s Social Care and Special Educational Needs, where funding is particularly stretched. The research explored how local areas might mitigate or reduce pressures on budgets and developed a series of recommendations for national and local government.

Research Findings

The research shows that children’s services across London are facing an unsustainable level of financial risk. In 2017/18 all but one council in London were in deficit on their high-needs expenditure and all but six were in deficit on their children’s social care expenditure. Given the significant budgetary pressures facing Children’s Services, London Councils is concerned that future performance in this vitally important service area will be put at risk. This isn’t a London-specific issue, but the numbers are stark: across all 33 London local authorities the total in-year shortfall in funding across both Special Educational Needs and Disabilities (SEND) and children’s social care came to £185 million in 2017/18. This shortfall is driven both by flatlining budgets and increased demand.

In SEND there has been a dramatic and sustained rise in demand for support, brought about by the very rapid increase in children and young people with Education Health and Care Plans (31 per cent over four years). In children’s social care, the overspend stands at 9 per cent in 2017/18, or £108 million. Increased complexity of need, workforce dynamics and competition within the market for places are leading to rapidly rising individual costs of care.

It found a number of factors explaining rising expenditure, including system level changes, the funding and policy landscape, demographic changes and the marketplace for providers and professionals.


The research makes it crystal clear that urgent action is needed to address the sustainability of funding for children’s social care and SEND – and that must include early intervention.

The research puts forward recommendations for local authorities and central government aimed at addressing the system level changes and broader funding and policy landscape that have led to an increased spend.


Read the full report here.