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Councils bid for extra care money

By Vivienne Russell | 26 April 2012

A campaign is mounting to secure councils a grant funding top-up to meet the costs of children in care, Public Finance has learnt.

Throughout May, parliamentary questions will be tabled and ministers lobbied to highlight cuts in funding for looked-after children at a time when many councils are struggling to meet demand.

Figures from the Children and Family Court Advisory and Support Service show that local authority care applications have reached a record high. According to Cafcass, councils made 10,199 applications in 2011/12, 10.8% more than in the previous financial year.

David Simmonds, chair of the Local Government Association’s children and young people’s board, said English councils were reporting significant increases in pressure on child protection.

‘There’s been a relentless rise in the number of referrals coming through, particularly from the police and the NHS over the past few years since the Victoria Climbié and Baby P cases. It’s as high as an 80% rise in Hillingdon where I’m a councillor,’ he told PF.

Simmonds added that, while councils were ‘by no means at breaking point, we are under a lot of pressure’.

Paul Woods, city treasurer at Newcastle City Council, said his authority experienced extra children’s care costs of £3.3m in 2011/12, while an extra £2.6m has been added to the children’s care budget for 2012/13.

Tony Kirkham, director of strategic finance at Nottingham City Council, said that his authority was also struggling. He said there were currently 540 children in care in Nottingham, compared with just under 460 in October 2008.

‘In terms of our medium-term financial plan, which we approved back in March, I had to put another £2.5m into the budget permanently to deal with the pressures in this area,’ he told PF. ‘At a time when we’re getting real, significant reductions in grant, it’s an area we’ve had to significantly put more money into.’

At Newcastle, Woods has analysed changes to formula grant over the past two years and is highlighting a 32.5% cut in the Relative Needs Formula for children’s social care. This is roughly equivalent to £1.3bn, he told PF and compares with a cut of just 0.5% in the adult social care RNF.

He added that the changes to the children’s social care RNF were one explanation for why poorer parts of the country were being hit harder by spending cuts than more affluent areas.

‘Social services for children are more acutely linked to looked-after children so the money is skewed towards deprived areas [where numbers of looked-after children are higher],’ he said.

‘Pressures are rising on children’s services, but government has cut funding in a very invisible, non-transparent way.’

Efforts to bring the matter to ministerial attention began at the start of the year and have included a request for a meeting with local government minister Bob Neill and a letter to children’s minister Tim Loughton. The Association of North East Councils is spearheading the lobbying effort and has recruited Newcastle North MP and shadow children’s minister Catherine McKinnell as a parliamentary ally.

A letter sent to Neill on March 26 from Anec chair Paul Watson, suggested money could be found from the extra £600m being collected in business rates.

Woods said that if the government allocated just half of this surplus business rate income to councils, Newcastle would benefit by about £1.8m.
‘Pressure [on ministers] will be mounting in May so that the government provides us with the funding,’ he said.

But at the LGA, Simmonds told PF: ‘It’s probably a vain hope in the current climate that anybody is going to see a big pile of money coming forward.’ He added that allowing councils more freedom over how to spend the various grants they receive had been a ‘big help’.

A Department for Education spokeswoman said: ‘We’re investing £4bn nationally over two years in children services. We’ve given local authorities complete freedom over their budgets so they can target children most at risk and protect them from harm.

‘It is a false economy for councils not to make this a priority – because society will pay much more further down the line if children don’t get the support they need as early as possible.’


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