Children’s services ‘could suffer’ as councils cut back

7 Aug 18

Children’s services could suffer as more councils are revealed to be struggling financially, local government experts have warned.

In the past few days East Sussex, Lancashire and Birmingham councils have emerged as the latest councils to be in financial trouble.

Auditors for Birmingham and Lancashire expressed concern the councils had been dipping into their reserves substantially. East Sussex County Council has been forced to produce a ‘core offer’ similar to that issued by bankrupt Northamptonshire County Council, stripping services back to the ‘legal minimum’.

Although East Sussex’s finances are believed to be well-run, its ‘core offer’ stopped or reduced spending on a raft of services. 

Birmingham City Council’s auditors Grant Thornton found that the council had spent £117m of its reserves in two years and has now issued a rare set of recommendations under section 24 of the Local Audit and Accountability Act – understood to be an early warning of financial mismanagement.

This is the second time since 2016 that the council has been told by auditors to improve its financial management.

Meanwhile, Grant Thornton’s audit report for Lancashire County Council, submitted to the local authority’s audit, risk and governance committee at the end of last month, said: “The council’s financial position is at a tipping point and continuing reliance on reserves is seen as unsustainable.

“The need for a more transformational and rigorous savings programme needs to be delivered during 2018-19 and beyond.”

Tony Travers, director of LSE London, told PF that he expected children’s services to be hit financially in the same way that adult social care has been previously. 

He said: “With rising demand for children’s social care, either councils have to stop cleaning the streets and mending potholes, or children’s care will start to suffer the cuts that adult social care suffered between 2010-15.

“Adult social care is now getting more money [from the Better Care Fund] but children’s care will be squeezed along with everything else within the contracting total of local government spending.”

Barry Kushner, Liverpool City councillor and cabinet member for children’s services, told PF that Northamptonshire and East Sussex’s core offers were just “a short-term fix but it only has short-term financial consequences.”

He said: “When there has been a crisis for local government, it has always tended to focus on adults and adult social care.

“There was some provision made in the Better Care Fund around adult social care, but the government has never responded to calls for additional money for children.”

Anne Longfield, the children’s commissioner for England, told BBC Radio 4’s Today programme on Saturday: “I’m extremely worried that the financial difficulties that Northamptonshire County Council are facing will mean that they are not going to be protecting the services for the most vulnerable children, which could have catastrophic consequences for those children.”

Rob Whiteman, chief executive at CIPFA, said that East Sussex’s cost-cutting is “to be expected given the pressures faced by local authorities.”

He said: “The difference here with Northamptonshire is that East Sussex has spotted the dangers, been open about their financial difficulties and are now doing what they can to meet legal requirements to balance their books.”

Becky Shaw, chief executive of East Sussex, said: “Our core offer paints an honest picture of the minimum that we realistically need to provide in the future and we want to use this as the basis for discussion with the government, partner organisations and residents in East Sussex.”

Lancashire and Birmingham councils have been contacted for comment.

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