Funding for children’s services has been subject to considerable change over the past 12 years. During that period, spending on children’s services by local authorities in England can be roughly divided into three distinct phases. The first phase occurred between 2010-11 and 2016-17. In response to significant funding cuts from central government, councils reduced spending on children’s services by almost £1 billion, a fall of 9% in real terms. Small increases in local authority revenues led to a second phase. Average annual growth rates of around 2% meant that, between 2016-17 and 2020-21, expenditure grew by almost £660 million.
The latest phase in 2021-22 has seen spending increase by more than an £800 million, an 8% rise on the previous year. However, this finding hides that £4 out of every £5 of the increased spending is going on late intervention spending. This has particularly been driven by a growing number of children in residential care homes – in the last decade the number of children in residential care has increased by 79% while spending has increased by 61%.
These new findings should be a wake-up call to the Government. They highlight the urgent need to break this vicious cycle, which creates huge costs for the Treasury and for children’s futures. We need significant investment in services that stop families reaching crisis point, which would not only reduce the financial cost to the state, but would allow more children to continue living with their birth families safely and improve their long-term life chances.