Children’s Services

Overspending on children’s social care is potentially the biggest financial issue facing local government. Since 2013/14 there has been a worrying growth in the overall level and proportion of authorities overspending.

In 2017/18, London boroughs overspent by more than £100 million. This is not a London-only issue: all local authorities are facing growing pressure on their children’s budgets. Around 90 per cent of councils in England overspent in 2017/18 (up from 50 per cent in 2010/11).

Population growth is a contributory factor, as is the growing complexity of looked after children (LAC) placements. London Councils’ 2018 survey found that the number of children requiring more costly external residential placements increased by 16 per cent between 2014/15 and 2017/18, while spending on these placements increased by 46 per cent.

The shortfall of funding within the High Needs block of the Dedicated Schools Grant for pupils with Special Educational Needs and Disabilities (SEND) is another huge pressure facing councils. London has 54,000 children and young people on a statement or education, health and care plan (EHCP): an increase of 48 per cent since 2010. The growth in recent years is partly a result of the impact of the Children’s and Families Act 2014, for which there was insifficient new burdens funding.

Last year (2017/18) there was a shortfall of £75 million across London despite funding increasing by 8.5 per cent that year. This year (2018/19) funding has only increased by 2.3 per cent and a shortfall of £100 million is expected.


Case study

Jim* is a 17 year-old male in local authority care with a long history of violence and other criminal behaviour. He is subject to the most rigorous, non-custodial intervention available for young offenders, and has had to be placed in a specialist facility because of the threat that he poses to other people. These placements - staffed 24 hours a day in a 2:1 ratio – cost more than £195,000 per person per year.

Other children suffer from severe disabilities that require complex care. A recent London Councils’ survey suggests that London boroughs have an average of 10 children on an EHCP who cost more than £100,000 each to support. Expenditure on high cost individuals reduces the funds available to invest in prevention and early intervention activities that can produce better outcomes for families, as well as save tax payers money by reducing pressure on other public services.