LGA Chairman’s briefing

Written Evidence Submitted by Local Government Association

About the Local Government Association

The LGA is the national voice of local government. We work with councils to support, promote and improve local government.

We are a politically led, cross-party organisation that works on behalf of councils to ensure local government has a strong, credible voice with national government.  We aim to influence and set the political agenda on the issues that matter to councils so they are able to deliver local solutions to national problems.

1. Executive Summary

Placements

1.1              There are currently insufficient placements to meet the needs of children in care, with increasing numbers of children in care and increasing complexity of needs amongst those children. Wider policy and case law issues have also increased the need for children’s social care, including placements.

1.2              Councils report acute challenges around placements for children with particularly complex and/or challenging needs, with this pressure one driver of very high placement costs. A chronic shortfall in secure welfare accommodation and inpatient children’s mental health facilities is placing significant pressure on specialist fostering or children’s homes placements. In 2022, 50 children were waiting for a secure children’s home place at any one time.

1.3              Developing provision that effectively meets the needs of these children and young people is complex and requires input from a range of stakeholders, in particular health services. Councils report frustration in engaging with health services in some cases to ensure appropriate provision, with differing priorities and significant pressures on budgets leading to siloed working. Councils report that they often find themselves paying for health services in the absence of investment by the NHS.

1.4              The cost of children’s social care placements has risen significantly, and as council budgets have come under increasing pressure, funding has increasingly been diverted away from earlier help services and into services for children in care. This is despite councils protecting children’s social care spending at the expense of most other services. An LGA survey in 2023 found that in 2018/19, English councils paid for approximately 120 placements costing at least £10,000 per week; by 2022/23, this had increased to over 1,500. Over the same period, the proportion of respondent councils paying for at least once placement costing at least £10,000 a week had increased from 23 per cent to 91 per cent.

1.5              A mixed market of provision, incorporating local authority and independent provision, can help to make sure children are quickly found homes that best suits their needs. However, our members are increasingly concerned about the balance of provision, in particular the growth and market share of the very largest providers which limits councils’ ability to manage the market and ensure the availability of placements to meet the needs of the children they care for.

1.6              The ownership of children’s social care placement providers has changed significantly over time. In residential care, 85 per cent of children’s homes are now run by private companies (up from 73 per cent in 2018), and almost half of fostered children are placed through independent fostering agencies (IFAs). We are also seeing changes in the providers themselves. For example, between 2015 and 2019, 29 different legal entities consolidated into just 16 different groups providing large numbers of placements.

1.7              Research for the LGA published in September 2023 found that eight of the largest ten independent providers of placements in England had private equity (PE) involvement, and identified that PE-owned provision carries a higher financial risk profile than other types of providers. Eight of the ten largest groups of independent providers carry more debts and liabilities than tangible assets, with all of these being PE-owned. In addition to financial oversight of the largest providers, we would like to see consideration of how mergers and acquisitions impact on quality of care and the experiences and outcomes of children, including Ofsted powers to oversee groups of providers rather than just individual settings.

Finance

1.8              Spend on early intervention services has fallen by 46 per cent since 2010-11 as it has been diverted into child protection and child in care services. Government funding for councils fell by 60p in the pound from 2010/11 to 2019/20, and we estimate that councils’ core spending power fell by 27.0 per cent in real terms from 2010/11 to 2023/24. One in five council leaders and chief executives in England think it is very or fairly likely that their council will need to issue a Section 114 notice this year or next, while half are not confident they will have enough funding to fulfil their legal duties in 2024/25. Councils in England continue to face a funding gap of £4 billion over the next two years.

1.9              Councils’ ability to mitigate the funding and demand pressures they face has been hampered by a financial framework characterised by one-year funding settlements and repeated delays to funding reforms. A further challenge is around the use of funding pots to support services. These frequently require councils to bid for funding, are time-limited and with specific conditions attached.

1.10              The Household Support Fund (HSF) provides a vital safety net and is often accessed by residents as a last resort. Councils and their partners report that demand for local welfare support remains at record levels with the cost of energy, housing and other essentials remaining exceptionally high relative to household income and continuing to rise. The LGA is therefore deeply concerned that ending HSF in March 2024 will create a cliff-edge in provision that councils will not be able to fill.  Ultimately, councils want to shift the focus from providing crisis support to investment in prevention to enable councils to improve long-term financial well-being and resilience in their places. However, in the short-term, the demand for an enhanced local welfare offer and crisis support provision is not reducing. Councils are united in their view that the HSF will continue to be needed beyond March 2024 to keep residents well, support them to stay in and enter work, prevent escalating crises and reduce pressure on public services. 

Workforce

1.11              We have significant concerns around the children’s social care workforce. 83 per cent of councils running children’s services report difficulties in recruiting children’s social workers; there has been a 40 per cent fall in the number of health visitors since 2015; and 77 per cent of Principal Educational Psychologists in local authorities report consistent difficulty in recruiting educational psychologists. DfE statistics show that the current vacancy rate, the level of children and families social workers leaving during the year and the sickness absence rate are all the highest in their data series. Children and family social workers report significant increases in their stress levels and workloads over time.

1.12              We are seeing increasing numbers of children’s social workers leaving local authorities to join agencies for a range of reasons, including increased pay, more flexibility and a different working culture. However, the Care Review highlighted that the additional cost of employing agency staff is approximately £26,000 per worker per year, meaning a loss of over £100 million per year from children’s social care services.

Outcomes for children and young people

1.13              Work by the Rees Centre provides valuable insight into the relationship between children’s social care and a child’s educational outcomes. This includes an emphasis on stability and support for children’s social, emotional and mental health difficulties.

1.14              Councils share the Government’s ambition of making sure every child with SEND gets high-quality support that meets their needs. Improving levels of mainstream inclusion will be crucial to the success of any reforms to the SEND system and we therefore welcome the proposal in the SEND and Alternative Provision improvement plan to “underpin the (national) standards with legislation for education at the earliest opportunity to facilitate intervention in education settings if standards are not met.” The introduction of these intervention powers will be crucial in impressing on all mainstream settings the need to take an inclusive approach. To ensure action is taken quickly where poor practice is identified, these powers should however sit with councils and not the DfE. It is also vital that the legislation needed to introduce these powers is brought forward at the earliest opportunity. 

1.15              It is important to consider feedback from care leavers themselves in relation to what is important to them. Organisations who have worked with care leavers have identified a series of key themes in support care leavers would like to see, including finance, housing, travel, health, leisure and practical support.

1.16              Research has identified a range of areas where improvements could be made to ensure that disabled children and young people can access the right types of help and support, including integrating services, ensuring choice and autonomy, and supporting the whole family.

Partnership working and inspection

1.17              The safeguarding partners for a local authority area in England – that is, the local authority, the Integrated Care Board and the police – are under a duty to work together and with other local partners to safeguard and promote the welfare of all children in their area. This duty is helpful, with all partners playing a vital role in keeping children safe, and in many areas partners work positively together to improve children’s lives. However, partnership working is not without challenges. This includes where all of the safeguarding partners are operating in a context of financial and workforce challenges; for example, the Child Safeguarding Practice Review Panel, in its 2021 Annual Report, noted that “Local Child Safeguarding Practice Reviews indicate that many of the issues that undermine the effectiveness of safeguarding practice are to do with serious resource shortages.”

1.18              With regard to how effectively Ofsted works as a regulator and inspector for children’s social care, we believe that the current Inspection of Local Authority Children’s Services (ILACS) regime is broadly working well and in many cases helps to drive an ongoing positive conversation between councils and Ofsted that ultimately helps to deliver improvements to services.

1.19              Many of our member councils have raised concerns around the overall burden of inspection and the resources required to manage this. Councils delivering children’s services will all need to manage ILACS inspections (including standard inspections and focussed visits), Area SEND Inspections, Joint Targeted Area Inspections and inspections of youth offending services (the latter undertaken by HMI Probation). Councils which run their own children’s homes will also have those inspected, usually at least once annually. While we recognise the important role of inspection in services supporting vulnerable children, this needs to be carefully balanced with ensuring that councils and their staff have the space and time to deliver and improve. Furthermore, Area SEND Inspections are joint between Ofsted and the Care Quality Commission, however the major burden falls on councils rather than health services, particularly with regard to post-inspection intervention and accountability.

1.20              We also believe that a review is required to ensure that Ofsted has the appropriate powers and levers for the current children’s social care landscape. This includes the power to look at large provider groups rather than only individual settings, to identify patterns and to spot both good practice and risks across groups of settings.

2. Is the current provision of children’s social care sufficient to meet demand?

2.1   Increasing need for children’s social care relates to two issues – increasing numbers of children needing support and protection, and the increasing complexity of needs of those children as recognised by both Ofsted and social workers. We address below provision of children’s social care placements, and children’s social care services, separately.

Placements

2.2   There are currently insufficient placements to meet the needs of children in care, as identified by the Competition and Markets Authority, the Independent Review of Children’s Social Care and Ofsted.

2.3              The increase in the number of children needing placements has, for the last few years, largely been driven by increasing numbers of unaccompanied asylum-seeking (UAS) children arriving in the country. Between 2021 and 2023, the total number of children in care increased by 3,070 (80,770 to 83,840), while the number of UAS children increased by 3,140 (4,150 to 7,290). This rise in UAS children is also one driver for out-of-area placements, as councils seek to place children in appropriate accommodation for their needs and wishes.

2.4              The nature of placements needed for children in care has also shifted in recent years as the profile of children coming into the care of their council has changed. A Department for Education (DfE) report published in May 2022 found that the age profile of children entering care has changed since 2013, with over 16s accounting for 20 per cent of entrants in 2021, compared to 13 per cent in 2013 (some of this can be explained by increasing numbers of UAS children coming into care). Under 1s, children aged 1-4 and children aged 10-15 have all experienced falls (2-3 percentage points) in proportions of entrants. The report also found that, after the age of 12, there was a sharp growth in the percentage of children’s social care assessments that included child alcohol or drug misuse, child sexual exploitation, trafficking, gangs, socially unacceptable behaviour and self-harm.

2.5              Wider policy and case law issues (though in some cases welcome) have also increased demand for children’s social care, including placements. This includes:

a)      Southwark judgement – this was a judgement made in May 2009 which obliges children’s services to provide accommodation and support to homeless 16- and 17- year olds.

b)      Decline in inpatient Child and Adolescent Mental Health Services (CAMHS) beds – the number of inpatient mental healthcare beds for teenagers fell by 20 per cent between 2017 and 2022, a reduction of 325 beds, despite increasing need for treatment.

c)       Decline in youth custody population – the number of children in youth custody has declined by nearly three quarters in the last ten years, from an average of 2,040 children at any one time to 560 in March 2021.

Services

2.6              As the cost of children’s social care placements has risen (more on this is outlined elsewhere in this submission), and as council budgets have come under increasing pressure, funding has increasingly been diverted away from earlier help services and into services for children in care. Research for the Children’s Services Funding Alliance found that since 2010-11, spend on early intervention services, including Sure Start children’s centres, family support and services for young people, has fallen by 46 per cent, while expenditure on ‘late interventions’ such as youth justice and child protection, along with child in care services, has risen by almost half (47 per cent). This is despite councils protecting children’s social care spending at the expense of most other services, increasing budgets by 13.6 per cent (£1.5 billion) in the last year alone.

2.7              We also have significant concerns around the children’s social care workforce, including but not limited to children’s social workers. DfE statistics show that the current vacancy rate, the level of children and family social workers leaving during the year and the sickness absence rate are all the highest in their data series. The number of full time equivalent agency social workers in 2022 was 6,800, up 13 per cent on the previous year and the highest in the data series; this does not include the number of agency workers in project teams in councils which has increased significantly in recent years. Ofsted has raised concerns about the number of social workers leaving to join agencies or leaving the sector altogether, noting in particular the challenge of the loss of highly qualified and experienced staff, but emphasises that “the persistent issue is that the pool of suitable staff is too small.”

3      The current social care market, including private sector care homes and care homes run by local authorities

Placements - Sufficiency

3.1   Councils consistently highlight challenges around the availability of suitable residential and fostering placements. This is in part due to a significant increase in the number of children in care; there were 64,470 children in care in 2010, compared to 83,840 in 2023, a rise of 30 per cent.

3.2   Sufficiency of placements varies around the country, with just over a quarter of all children’s homes, and almost a quarter of all places, in the North West region at 31 March 2023 (source). Only 7 per cent of children’s home places were in London. Increasing privatisation and consolidation of children’s homes providers may be one factor in the unequal geographical distribution of children’s homes, with locations reflecting where property has historically been cheaper. While individual local authorities and small providers have incentives to develop local provision, this is less of a driver for some larger groups who operate nationally or across multiple regions.

3.3   Sufficiency must be seen in terms of suitability, rather than the number, of placements. In 2021 Ofsted reported that “over the last 7 years, the general trend has been of a slow increase in numbers of [fostering] places…However, this increase has not kept up with the demand for places, with the number of children in foster care having increased by around 11 cent over the period to March 2020. [Ofsted’s] own research, along with that carried out by The Competition and Markets Authority (CMA), indicates that although there are more approved places than children in foster care, this does not mean that there are sufficient appropriate placements for children.”

3.4   One in every five (19 per cent) active fostering households in England offers family and friends provision, providing care for about one in five (21 per cent) fostered children. These placements have a separate approval process to other types of foster care and approvals are usually for the care of a specific child or children. Friends and family placements make up an increasing proportion of local authority fostering households, in line with the expectation that councils place children with family and friends wherever possible.

3.5   Councils report acute challenges around placements for young people with particularly complex and/or challenging needs. There are 13 secure children’s homes in England, 12 run by councils and one by a voluntary organisation. Ofsted data shows they are registered to offer 113 welfare places and 101 youth custody places. There are no SCHs in London or the West Midlands, though the Department for Education is funding work in both regions to address this. In 2022, Ofsted reported that at any one time, 50 children were waiting for a secure children’s homes place, and 30 were placed by English councils in Scottish secure units due to the lack of available places. The Scottish Care Review recommended that Scotland no longer takes placements from English local authorities, and work is currently underway to look at how this might be implemented.

3.6   A chronic shortfall in secure welfare accommodation and inpatient children’s mental health facilities is placing significant pressure on specialist fostering or children’s homes placements. Councils also report some children’s homes providers being unwilling to offer placements to these children in case the challenges of supporting them lead to a falling Ofsted rating. Providers express concern that this could in turn lead to fewer referrals, as many councils prefer to place only in ‘good’ or ‘outstanding’ homes, which would clearly impact on the financial viability of the home. 

Placements – Shape of the market

3.7          A mixed market of provision, incorporating local authority and independent provision, can help to make sure children are quickly found homes that best suits their needs. For example, a private or voluntary sector provider may have specialist expertise or may be able to focus on delivery of particular placement types, ensuring a breadth of placements available. However, our members are increasingly concerned about the balance of provision, in particular the growth and market share of the very largest providers which limits councils’ ability to manage the market and ensure the availability of placements to meet the needs of the children they care for.

3.8          The ownership of provision has changed over time. In residential care, 85 per cent of children’s homes (2,450) are now run by private companies (up from 73 per cent in 2018), accounting for 81 per cent of places. Almost half of fostered children (47 per cent) are placed through independent fostering agencies (IFAs). We are also seeing changes in the providers themselves. For example, between 2015 and 2019, 29 different legal entities consolidated into just 16 different groups providing large numbers of placements.

3.9          This changing ownership has several drivers. One of these is around funding, with local authority funding under increasing pressure as central government grants have fallen and demand for services has increased. Outsourcing the provision of children’s homes in particular was initially seen as one way of managing these pressures, with privately run homes often cheaper at the time (for reasons including higher rates of pay in local authority run homes and cost efficiencies in private sector provision) and a reduction in financial risk for the council.

3.10      These financial challenges have also led to the reduced ability of councils to invest in new provision, though as councils have faced challenges to find appropriate children’s homes placements, we are increasingly seeing councils re-invest in their own children’s homes. Conversely, children’s social care services have increasingly been seen as a low-risk investment opportunity for private equity (PE) groups given the increasing need for these services. Research for the LGA published in September 2023 found that eight of the largest ten independent providers of placements in England had private equity involvement.

3.11              Research for the LGA identifies that PE-owned provision carries a higher financial risk profile than other types of providers. Eight of the ten largest groups of independent providers carry more debts and liabilities than tangible assets, with all of these being PE-owned. In total, eleven of the twenty groups of providers (the largest in the market) in the study reported negative net tangible assets, with all but one of these having PE ownership.

3.12              We have called for national oversight of the largest providers, similar to the role the Care Quality Commission (CQC) holds for adult social care provision. The collapse of adult care home provider Southern Cross in 2011 led to a legal duty for the CQC to monitor the financial health of the “most difficult to replace” adult social care service providers. However, no such duty exists for children’s social care providers. In the Stable Homes, Built on Love strategy, the Department for Education committed to developing a financial oversight regime which will be voluntary until parliamentary time allows for legislation to be brought forward. In addition to financial oversight, we would like to see consideration of how mergers and acquisitions impact on quality of care and the experiences and outcomes of children, including Ofsted powers to oversee groups of providers rather than just individual settings.

Placements - Quality

3.13              Ofsted ratings do not reveal significant differences in quality between provision under different ownership. However we believe it would be helpful to consider a wider range of measures when considering the quality of provision, for example the educational progress and health outcomes of children cared for by providers, and feedback from children themselves.

3.14              A longitudinal analysis of inspection outcomes for children’s homes by Oxford University found that for-profit providers are statistically significantly more likely to be rated of lower quality than both public and third sector services, and for-profit children's homes violate a greater number of requirements and receive more recommendations compared to other ownership types.

Placements - Cost and profit

3.15              The Competition and Markets Authority review into the placements “market” found that average operating profit for the largest providers of children’s homes had increased from £702 to £910 per place per week between 2016 and 2020 in line with increasing prices and flat operating margins, while profits for the largest fostering agencies had remained broadly flat over the same time. Even allowing for profits the average amount paid by a council for a place in a private children’s homes is not higher than paying for an in-house place; the primary cause of this was higher staffing ratios and costs in local authority provision. In-house foster carers were found to be cheaper than independent fostering agency placements.

3.16              The CMA concluded that “the largest private providers of placements are making materially higher profits, and charging materially higher prices, than we would expect if this market were functioning effectively.”

3.17              Research for the LGA published in September 2023 found that for 19 of the 20 largest providers of children’s social care placements (Caretech, the second largest provider, is excluded as they no longer provide this information):

1. There was a total profit of £310 million over one year, representing a profit margin of 19 per cent.
2. The highest profit margins tended to be in the largest provider groups. Those providers with a profit margin of at least 20 per cent of income were all in the top 6 providers by size and were all private equity owned.

3.18              The LGA surveyed all councils providing children’s social care in England in October and November 2023 to understand the changing need for particularly high-cost placements for children in care – that is, any placement costing at least £10,000 per week. The research found that:

1. It is estimated that English councils paid for approximately 120 placements costing £10,000 per week or more in the 2018/19 financial year, compared to over 1,500 in 2022/23.
2. In 2018/19, 23 per cent of respondent councils paid for at least one placement costing £10,000 per week, compared to 91 per cent in 2022/23.
3. The highest cost that a council was paying for a placement at the time of the survey was £63,000 per week. Most councils tended to fall between costs of £9,600 and £32,500 per week for their costliest placements.

Workforce – children’s social work agencies

3.19              Pressure in children’s social care is leading to children’s social workers leaving council social work or leaving the profession altogether. DfE statistics show that the current vacancy rate, children and family social workers leaving during the year and sickness absence rate are all the highest in the data series. Children and family social workers report significant increases in their stress levels and workloads over time.

3.20              We are seeing increasing numbers of children’s social workers leaving local authorities to join agencies for a range of reasons, including increased pay, more flexibility and a different working culture. However, the Care Review highlighted that the additional cost of employing agency staff is approximately £26,000 per worker per year, meaning a loss of over £100 million per year from children’s social care services.

3.21              We are also hearing reports of some agencies refusing to provide individual social workers to meet needs in councils, but rather insisting on providing full project teams at a significant cost.

3.22              We welcome recent Government announcements that will help to address challenges around children’s social work agencies, however we want to continue to work with the Government to ensure that these new rules provide sufficient levers for councils to effectively manage local markets, as well as to increase the overall number of children’s social workers so that we can continue to meet children’s needs.

NHS

3.23              Councils report increasing complexity and severity of need amongst children and young people in care, for example in relation to mental health issues, self-harm and violent behaviours, and the impacts of sexual and criminal exploitation.

3.24              Developing provision that effectively meets the needs of these children and young people is complex and requires input from a range of stakeholders, in particular health services. Councils report frustration in engaging with health services in some cases to ensure appropriate provision, with differing priorities and significant pressures on budgets leading to siloed working. Councils report that they often find themselves paying for health services in the absence of investment by the NHS.

Wales

3.25              The Welsh Government has set out its intention to remove profit from the care of looked after children. Anecdotally, we understand that this has led to some providers choosing to either leave the market in Wales or scale back expansion plans, while new providers are waiting to better understand future regulations before establishing provision. We are concerned that this will, in at least the short to medium term, put more pressure on placement sufficiency in Wales and lead to more Welsh children being placed across the border in England, exacerbating sufficiency challenges here. We are working with the Welsh Local Government Association and our member councils on the Welsh border in particular to monitor any impacts of the ongoing work in Wales.

4. The reasons behind the rising cost of children’s social care for local authorities and the ways to mitigate this

4.1              Children’s social care is increasingly cited by councils with this responsibility as their key source of financial pressure and overspend. Our recent survey of councils on high cost placements suggests that a central issue is the lack of supply of certain placement types for children in care. Budgeted spend on children’s social care increased by £1.5 billion (13.6 per cent) in 2023/24. This is a continuation of a trend of spiralling costs in this service area driven partly by continuous growth in the number of children in care since 2009. The increasing complexity of cases and growing competition for a limited supply of placements means the cost of supporting children has also increased. While the number of children in care increased by 13 per cent from 2016/17 to 2021/22, spend on fostering and residential placements increased by 39.6 per cent over the same period. This was largely driven by increasing need to use residential placements for children, with an increase of 22 per cent (1,370) places between 2017 and 2022 (2017 statistics; 2022 statistics).

4.2              The Competition and Markets Authority, the Independent Review of Children’s Social Care and Ofsted have all highlighted that councils on their own cannot address the challenges in the children’s social care placements market. Without additional support, we will see more children living in placements that do not meet their needs, and we do not believe that the trend for sharply increasing placement costs will end without urgent action. This will mean children’s social care funds are increasingly directed at placement costs rather than broader support and earlier help.

4.3              Increasing use of agency social workers and challenges in providing suitable placements for children with complex mental health needs, as outlined earlier in this submission, are also increasingly significant factors.

Commissioning

4.4              Commissioners of children’s services highlight the challenges of this being a “demand-led” service, with the level and type of future demand unclear. Issues include:

a)           Variation in rates of demand in different areas, driven by a range of factors including levels of deprivation and geography

b)           Increasing numbers of unaccompanied asylum-seeking children

c)            Rising referrals and numbers of children on protection plans and in care

d)           Changes in how we support children and young people, for example increased recognition that children affected by child criminal and sexual exploitation are victims first rather than offenders

e)           Changing needs of young people, including as a result of changing threats such county lines and online grooming

f)             Lack of data or projections around the needs of children to inform future planning.

4.5              Uncertainty of future funding is also a challenge. Annual funding rounds alongside falling funding for councils and overspends on children’s services make medium- to long-term commissioning strategies challenging to develop.

4.6              Frameworks are widely used across children’s services to secure placements and are often set up across local authority consortia. However, many placements are still made via spot purchasing, which is driven in part by the need to find suitable placements for growing numbers of children with complex needs. Moving away from a reliance on spot purchasing and moving towards greater levels of needs assessment and better demand forecasting, will require investment and the opportunity to plan over a longer-term.

4.7              The Local Government Finance Policy Statement published on 5 December 2023 noted that “Government will work closely with councils to increase transparency around the costs of residential placements for children, as a precursor to wider commissioning and market shaping reforms being rolled out through Regional Care Co-Operatives.” We welcome this announcement and look forward to hearing more about Government’s plans.

Children with the most complex or challenging needs

4.8              The LGA’s research into high cost placements for children in care asked councils to identify those factors they felt were instrumental in driving the high weekly costs of certain placements. Almost all (98 per cent) cited a lack of choice, with 92-93 per cent of councils also highlighting the need to support children with complex or significant mental health needs, or exhibiting challenging behaviours.

4.9              We are keen to discuss with Government the potential for a national approach to investment and coordination of provision for children and young people with the most complex and challenging needs. This would include all children in welfare secure settings and those who are just below this threshold. This is a relatively small number of children, but they require intensive, specialist support in placements that are very expensive.

4.10              All but one of England’s 14 SCHs are run by individual local authorities. These authorities are holding the financial risk of running this provision, along with ensuring the safety and wellbeing of the children in their care, on behalf of all councils. The current approach of relying on a very small number of individual councils to run a national service does not support the necessary expansion of services, and means children placed in these settings are often very far from home.

4.11              We are also interested in the longer term in opportunities to consider how all secure placements are provided. Around 1,340 children were living in secure accommodation in 2019, of which 715 had been sentenced or remanded by a court, 544 were on mental health wards and 81 in secure children’s homes for welfare reasons. A further group of children are deprived of their liberty either under the ‘inherent jurisdiction’ of the high court, where no existing piece of legislation allows for the child to be deprived of liberty, but where this is deemed necessary to keep them safe. This is often used where a place in an SCH is not available, and its use has increased sharply in recent years.

4.12              These young people all need specialist support, and often have similar needs. A child may end up in a particular type of provision purely as a result of where their needs were first recognised – whether that is through contact with the youth justice system, via mental health services or a referral to children’s social care – rather than being strictly driven by their needs. This provision is overseen by three different government departments and commissioned by different agencies locally. Improved join up could help to ensure children get the right support for their needs, leading to better outcomes overall.

5. What measures can be undertaken to improve early intervention

5.1              Early intervention can take place through both dedicated work with children and families, and targeted interventions. For the former, a strong, well-trained workforce is vital, yet we know that in many areas of children’s social care and child protection there are challenges here. For example, 83 per cent of councils running children’s services report difficulties in recruiting children’s social workers; there has been a 40 per cent fall in the number of health visitors since 2015; and 77 per cent of Principal Educational Psychologists in local authorities report consistent difficulty in recruiting educational psychologists.

5.2              There is good evidence around many interventions with children and families, much of which has been collated by the Early Intervention Foundation (now the Foundations What Works Centre for Children and Families) in the EIF Guidebook, and the Youth Endowment Fund in the YEF Toolkit. We understand that Foundations is currently developing a series of practice guides collating evidence under key themes to support delivery of the National Children’s Social Care Framework; these will be a valuable resource and we welcome investment in this work.

5.3              Effective early intervention requires time for frontline practitioners to work with children and families and funding for services to refer into where required. A well-functioning ‘back office’ is also vital to ensure that support is appropriately commissioned and targeted, and consistent improvement sought. However, as outlined elsewhere in this submission and below, rising demand for support and pressure on finances means that all of these factors are experiencing significant challenge.

5.4     Appropriate funding for children’s social care, children’s services and wider council and public services is vital to ensure that early intervention is available to meet the needs of children and families. As outlined elsewhere in this submission, spend on early intervention services has fallen by 46 per cent since 2010-11 as it has been diverted into child protection and child in care services. Government funding for councils fell by 60p in the pound from 2010/11 to 2019/20, and we estimate that councils’ core spending power fell by 27.0 per cent in real terms from 2010/11 to 2023/24. The bulk of cuts happened in the first half of the last decade and core spending power was at its lowest in real terms in 2016/17. However, since then there has been no marked recovery, and core spending power has stayed relatively flat in real terms since 2016/17 at roughly 25 to 30 per cent less than 2010/11 in any given year. But in this period councils have not only had to deal with the implications of the cuts in the first half of the decade but also meet growing service demand and deliver new responsibilities.

5.5     Councils’ ability to mitigate the funding and demand pressures they face has been hampered by a financial framework characterised by one-year funding settlements and repeated delays to funding reforms. Councils need greater certainty on funding through multi-year settlements and more clarity on financial reform so they can plan effectively and maximise the impact of their spending over the medium-term.

5.6     The provisional Local Government Finance Settlement published on 18 December 2023 failed to provide enough funding to meet the severe cost and demand pressures which have left councils of all political colours and types warning of the serious challenges they face to set balanced budgets next year. One in five council leaders and chief executives in England think it is very or fairly likely that their council will need to issue a Section 114 notice this year or next, while half are not confident they will have enough funding to fulfil their legal duties in 2024/25. Councils in England continue to face a funding gap of £4 billion over the next two years.

5.7     A further challenge is around the use of funding pots to support services. These frequently require councils to bid for funding, are time-limited and with specific conditions attached. This means that funding is often likely to go to those areas most able to invest in developing strong bids, or that the roll-out of programmes is patchy. For example, the Government’s £300m investment in the Family Hubs and Start for Life programme is only supporting 75 – or half of - upper tier councils. Short-term funding pots can make it very difficult to establish services and recruit and retain appropriately qualified staff. This includes providing vital voluntary and community sector services with the longer-term certainty that they need to invest in their services and respond to community need.

5.8     It is important to consider the wider factors impacting upon children and families as part of a drive to improve earlier support. The DfE’s longitudinal study of local authority child and family social workers (wave 5) found that social workers were increasingly citing the challenges of the increasing cost of living on families, with reference to both mental and physical health and unaffordable housing. While inflation is now falling, prices continue to rise, while the Office for Budget Responsibility has predicted that real household disposable income per head will fall by 0.9 per cent in 2024 and living standards will remain lower than their pre-pandemic levels until 2027-28, therefore we can expect to see ongoing pressure on families.

5.9     The Household Support Fund (HSF) provides a vital safety net and is often accessed by residents as a last resort. Councils and their partners report that demand for local welfare support remains at record levels with the cost of energy, housing and other essentials remaining exceptionally high relative to household income and continuing to rise. The LGA is therefore deeply concerned that ending HSF in March 2024 will create a cliff-edge in provision that councils will not be able to fill.  Ultimately, councils want to shift the focus from providing crisis support to investment in prevention to enable councils to improve long-term financial well-being and resilience in their places. However, in the short-term, the demand for an enhanced local welfare offer and crisis support provision is not reducing. Councils are united in their view that the HSF will continue to be needed beyond March 2024 to keep residents well, support them to stay in and enter work, prevent escalating crises and reduce pressure on public services. 

5.10 Health services are a vital factor in ensuring positive outcomes for children and families, however we know that there are challenges for some families in accessing these, especially mental health services. 2023 was the first year in which the most common factor identified at the end of a children’s social care assessment was concern for a parent’s mental health, while assessments identifying concerns for a child’s mental health have increased by 52 per cent since 2018 (from 57,410 to 87,370). In 2022, one in six children aged 7 to 16 had a mental health problem, an increase from one in nine in 2017 and one in ten in 2004. We also know that some groups of children are disproportionately impacted by mental health problems, including those who identify as LGBT+, refugee and asylum seekers and those with learning disabilities. Children from a White ethnic background are more likely to have a probable mental health disorder than those from Black and Minority Ethnic backgrounds, and increased financial strain is strongly associated with child mental health. While many national policies have referenced the importance of early intervention, little action at a national level has followed to ensure that services of this kind are in place within local areas. Efforts have also been hampered by wider funding constraints, such as real term reductions in the Public Health Grant, which has significantly limited the work of local authorities in this area. Key risk factors that contribute to poor mental health, and that are therefore worthy of consideration to address rising cases, include poverty, caring responsibilities, parental mental health, experience of adversity and trauma, and bullying. Emerging evidence in other countries also points to racism, discrimination, poor housing and the climate crisis.

6. How combinations of kinship care, residential education, foster care and adoption could provide alternatives to residential care

6.1              It is important that we consider alternatives to residential care only where this is best for the individual child, rather than assuming that alternatives are always preferable. While family settings will be the best option for many children, our members have repeatedly highlighted that for some children in their care, residential children’s homes are the best choice, for example for some older children who express that they do not want to live in another family environment to the one they have grown up in. Research for the LGA highlighted that one of the barriers to developing new children’s homes is their perceived role as an “option of last resort”. If we are to ensure that we have the right homes for all children who need to come into care, we must ensure that a range of options is available and not introduce additional barriers as an unintended consequence of policy.

6.2              We strongly welcome the DfE’s recent focus on support for kinship carers, and work to enable more children to live within their family or close networks where they cannot live with their birth parents. Recent increases in the number of friends and family foster carers indicates an increased focus on supporting children to stay with those close to them, and enabling this to happen without bringing children into care where it is not necessary for the child’s safety and wellbeing will be a positive step.

6.3              We welcome also investment in training and support for all kinship carers, and hope that the lessons learnt from piloting Family Network Support Packages will be swiftly shared, along with necessary funding to implement changes, so that children and carers across the country can benefit as soon as possible.

6.4              It would be helpful to consider how flexible models of care could be provided. Current models offer limited opportunities to support families through significant crises, with binary options around being “in” or “out of” care. More flexible models could offer particular support for teenagers, providing important breathing space for young people and their families through times of conflict, including to break cycles of behaviour and implement new approaches by both parent(s) and child.

7.              How children’s social care can impact a child’s educational or long-term outcomes and ways to improve outcomes for care leavers

7.1              Work by the Rees Centre at the University of Oxford provides valuable insight into the relationship between children’s social care and a child’s educational outcomes. For example, the Centre’s April 2020 report, “Children in Need and Children in Care: Educational Attainment and Progress”, found that:

• At each Key Stage, attainment and progress were lower for children who had any social work intervention during their school years compared with those who had no intervention;
• After taking all other variables into account, the size of the relationship between all types of social work interventions and Key Stage 4 attainment shrank. Compared to the size of the gender effect (a well-established difference relevant for all children), the only substantial attainment gaps that remained were for those who had spent time in care and those who were receiving social work interventions in Year 11.
• Where children experienced severe adversity requiring social work intervention by the end of Key Stage 1: higher GCSE scores were achieved by children who were not receiving social work services in Year 11, had fewer than 4 separate period of social work intervention, and who had experienced a longer-term stay in care (though their educational experiences in secondary school were also important).
• Stability was important, as was the way in which children’s social, emotional and mental health difficulties were being addressed.
• Families of children in need found it difficult to afford what was needed for schooling, including computers and school uniforms, compared to most foster carers who felt they were able to provide adequately.

7.2              The Centre has also published a report, “Improving the effectiveness of virtual schools”, which considers how virtual schools can best support children in care. This report highlights a range of factors that impact on children’s attendance at, and attainment in school, including:

• Areas where high proportion of schools resist admission of children in care
• Concentrations of schools that exclude quickly due to inflexible behaviour policies
• Distribution of special school and alternative provision places
• Access to SEND support
• Sufficiency of local care placements
• Stability of funding for the virtual school
• Influence of the virtual school head within and beyond the local authority.

7.3              Councils share the Government’s ambition of making sure every child with SEND gets high-quality support that meets their needs. The SEND Green Paper acknowledged that councils are ideally placed to act as convenors of local SEND systems, bringing together health and education partners to develop local inclusion plans. The Green Paper rightly recognised that getting the accountabilities, accompanied by the right levers will be crucial; with the right powers and levers, councils can effectively hold partners to account for their contributions to meet the needs of children and young people with special needs and disabilities. It was therefore disappointing that the SEND and Alternative Provision improvement plan did not build on that acknowledgement and instead proposed additional powers for the Departments for Education (DfE) and Health and Social Care (DHSC). We do not believe it would be possible or desirable for the DfE or DHSC to build the capacity and expertise to hold partners to account in the detail needed for co-operation on both developing and delivering the local plans. Councils, education settings and Integrated Care Boards (ICBs) must instead be accountable to each other, not Whitehall.

7.4 Improving levels of mainstream inclusion will be crucial to the success of any reforms to the SEND system and we therefore welcome the proposal to “underpin the (national) standards with legislation for education at the earliest opportunity to facilitate intervention in education settings if standards are not met.” (paragraph 13, page 27). The introduction of these intervention powers will be crucial in impressing on all mainstream settings the need to take an inclusive approach, which will in turn reduce the use of special schools and independent, non-maintained special schools and relieve pressure on council high needs budgets, as well as improve outcomes for children and young people with SEND.  To ensure action is taken quickly where poor practice is identified, these powers should however sit with councils and not the DfE. It is also vital that the legislation needed to introduce these powers is brought forward at the earliest opportunity. 

7.5              With the abandonment of the Schools Bill the existing fragmented education system, within which councils do not have the powers to fulfil their remaining statutory duties, will continue for the foreseeable future. In this fragmented system it is vital that councils have powers to direct all schools to admit pupils without a place and that a register for home-educated children is introduced and accompanied by powers for councils to check that those children are receiving a suitable education. The Department for Education should also clarify school accountabilities, specifically the role of councils and how they interact and work effectively with Ofsted and the Department’s Regional Directors. 

7.6              Many people with care experience leave care and go on to happy, fulfilling lives. Care experienced people told the Independent Review of Children’s Social Care that it was important to recognise that, while a lot of policy and media attention is given to the disproportionate numbers of care experienced people who experience negative outcomes, such outcomes are not inevitable and care can be a “positive, transformational and lifesaving experience”. For example, as highlighted above there is evidence that longer-term care can be a protective factor in children’s educational outcomes.

7.7              However, by understanding where those with care experience are more likely to experience negative outcomes than their peers, it is possible to identify opportunities to address these issues. The Care Review highlights several key areas where government, business and society can play a role in supporting care experienced people:

• An estimated 26 per cent of the homeless population have care experience.
• Almost a quarter (24 per cent) of the prison population in England have spent time in care.
• Four in ten (41 per cent) of care leavers aged 19-21 are not in education, employment or training (NEET) compared to 12 per cent of all other young people of the same age.
• Adults who spent time in care between 1971-2001 were 70 per cent more likely to die prematurely than those who did not.
• Six per cent of care leavers report having no-one at all to provide emotional support, and nearly one in ten only had support from their leaving care worker.

7.8              We can consider these issues alongside feedback from care leavers themselves in relation to what is important to them. The following list has been compiled from a variety of organisations (including the National Leaving Care Benchmarking Forum, the Care Leavers National Movement, Barnardo’s and the Children’s Commissioner) that have worked with care leavers to identify key support that they would like to see, and we have provided some examples of good practice around the country in delivering this support.

8.The specific experiences of disabled children or children with additional needs within children’s social care, how they differ from their peers, and ways to improve their experiences

8.1              The LGA recently commissioned Alma Economics to carry out a review of existing literature, along with a short series of interviews, identifying challenges around access to social care services for people with lifelong disabilities. This research identified a range of areas where improvements could be made to ensure that disabled children and young people can access the right types of help and support including:

• Access to services – the report notes a range of challenges with regard to access to services which have been exacerbated by insufficient funding, including a lack of choice of services in rural areas or for particular types of need and a lack of short break beds.
• Ensuring access to services that meet both practical and emotional needs, and support people’s individual identities including cultural needs, sexual orientation and gender identity.
• Workforce – a lack of staff can lead to a lack of choice in services, as well as inconsistency of support workers for service users which impacts upon the ability to build trusting relationships. Workers including social workers can find themselves with less time to spend with children, young people and their families, while support to transition between children’s and adult social care can be more difficult to manage where staff have limited time and resources. Training of all staff working with children and young people is also key to ensuring they receive the right support.
• Integrated services – a lack of join up across services and poor data sharing can cause challenges in ensuring children and young people receive the services they need, as well as requiring them and their families to repeatedly tell their story.
• Choice and autonomy – service users described wishing to have their voices heard in the design of care packages.
• Communication – inconsistent communications, along with difficulty in finding out about available support, were both highlighted as areas that caused challenges for service users.
• Support for families – in the majority of cases, families are the primary carers for disabled children and young people, and it is important to ensure that they receive the support they need to provide that care to the best of their abilities. This can include flexibility in financial support, such as enabling a family to pay a cleaner or pay for a nursery space for a sibling.

8.2              Many of these issues can in part be tackled through work across children’s social care, such as expanding the workforce, re-investing in family help that is led by local needs-assessments and improving data-sharing; however, these all need to be adequately funded to be successful. For children with SEND, the DfE’s SEND and AP improvement plan acknowledges that implementing reforms will take several years and while the additional high needs funding that has been made available via the ‘safety valve’ and ‘Delivering Better Value in SEND’ programmes is welcome, these programmes do not address the fundamental cost and demand issues that are driving more councils into deficit and threaten the future financial viability of local government. Without sufficient investment in SEND and children’s social care services, local authorities will struggle to meet the needs of disabled children and young people.

8.3              We encourage the DfE and the Department for Health and Social Care (DHSC) to work together to consider how health and social care services locally, driven by a shared national ambition, can ensure access to the right services for children and young people. This may include access to shared funding across health and social care to deliver integrated services. We are concerned that the SEND and AP improvement plan does not include proposals to give councils additional powers to be able to lead SEND systems effectively. We do not believe it would be possible or desirable for the DfE or DHSC to build the capacity and expertise to hold partners to account in the detail needed for co-operation on both developing and delivering the local SEND plans. Councils, education settings and Integrated Care Boards (ICBs) must instead be accountable to each other, not Whitehall.

8.4              We welcome the Law Commission review of legislation for disabled children as this is currently very complex. It is vital that this considers the interaction of legislation for disabled children with that for disabled adults, recognising that this can either enhance or add complexity where people transition from children to adult services.

8.5              Children with disabilities should be able to attend the best education settings for their needs, therefore improving levels of mainstream inclusion will be crucial. We therefore welcome the proposal to “underpin the (national) standards with legislation for education at the earliest opportunity to facilitate intervention in education settings if standards are not met” set out in the SEND and AP improvement plan. The introduction of these intervention powers will be crucial in impressing on all mainstream settings, including in the early years, the need to take an inclusive approach, which will in turn reduce the use of special schools and independent, non-maintained special schools and relieve pressure on council high needs budgets, as well as improve outcomes for children and young people with SEND.  To ensure action is taken quickly where poor practice is identified, these powers should however sit with councils and not the DfE. It is also vital that the legislation needed to introduce these powers is brought forward at the earliest opportunity. With the recently announced extension of funded early entitlements for children in working families, it will be vital to ensure that these entitlements are fully funded so that disabled children and their families can access early years places that meet their needs.

8.6              The needs of disabled children and their families must be explicitly considered in the Families First for Children pilots, including ensuring that families do not have to access support via safeguarding routes.

9. The current system of safeguarding in children’s social care and how effectively Ofsted works as a regulator and inspector for children’s social care.

9.1              The safeguarding partners for a local authority area in England – that is, the local authority, the Integrated Care Board and the police – are under a duty to work together and with other local partners to safeguard and promote the welfare of all children in their area. This duty is helpful, with all partners playing a vital role in keeping children safe, and in many areas partners work positively together to improve children’s lives. We also support work by the DfE to identify how education can be effectively made the fourth statutory safeguarding partner.

9.2              However, partnership working is not without challenges. This includes where all of the safeguarding partners are operating in a context of financial and workforce challenges; for example, the Child Safeguarding Practice Review Panel, in its 2021 Annual Report, noted that “Local Child Safeguarding Practice Reviews indicate that many of the issues that undermine the effectiveness of safeguarding practice are to do with serious resource shortages.” This is further exacerbated when partners are working to different national priorities – for example, some of our members report concerns around adult health services appearing to be prioritised over children’s health and particularly children’s mental health services – or implementing practice models to address individual agency challenges without due consideration of the potential impact on children, for example the roll-out of the “Right Care, Right Person” model by many police forces across the country.

9.3              While councils, the police and health are all statutory safeguarding partners, we continue to find that councils are more often held accountable for safeguarding failures. It would be useful to consider how the accountability of partnerships can be improved, including the extent to which multi-agency safeguarding is a key issue in single agency inspection reports.

9.4              With regard to how effectively Ofsted works as a regulator and inspector for children’s social care, we believe that the current Inspection of Local Authority Children’s Services (ILACS) regime is broadly working well and in many cases helps to drive an ongoing positive conversation between councils and Ofsted that ultimately helps to deliver improvements to services.

9.5              However, many of our member councils have raised concerns around the overall burden of inspection and the resources required to manage this. Councils delivering children’s services will all need to manage ILACS inspections (including standard inspections and focussed visits), Area SEND Inspections, Joint Targeted Area Inspections and inspections of youth offending services (the latter undertaken by HMI Probation). Councils which run their own children’s homes will also have those inspected, usually at least once annually. While we recognise the important role of inspection in services supporting vulnerable children, this needs to be carefully balanced with ensuring that councils and their staff have the space and time to deliver and improve. Furthermore, Area SEND Inspections are joint between Ofsted and the Care Quality Commission, however the major burden falls on councils rather than health services, particularly with regard to post-inspection intervention and accountability.

9.6              We also believe that a review is required to ensure that Ofsted has the appropriate powers and levers for the current children’s social care landscape. This includes the power to look at large provider groups rather than only individual settings, to identify patterns and to spot both good practice and risks across groups of settings.

9.7              We have also heard concerns from some providers of residential children’s homes that, despite assurances at a national level, local Ofsted inspectors can appear to penalise children’s homes where they are supporting children with particularly complex needs. It is important to understand how national policy is shared with and understood by the wider organisation to ensure consistency.

9. The government ’s children’s social care implementation strategy, Stable Homes, Built on Love, released in February 2023, including how effective the strategy has been so far and how effective it is projected to be in the long-term.

9.1              There is much to welcome in the Government’s children’s social care reform strategy. A focus on earlier help, support that builds on the strengths within a child’s wider family network, and greater ambition for our children in care and care leavers are all areas where we can make an enormous difference.

9.2              We believe that some of the proposed reforms, such as Regional Care Cooperatives, need a far stronger evidence base and are pleased that the Department is taking a cautious approach to these. Untested reforms could have unintended consequences for children and their families, so a test and learn approach is appropriate. We also welcome the Government’s commitment to co-designing these reforms.

9.3              We would have liked to see more focus on some of those issues that lead to more children and families needing support from children’s social care, including financial deprivation and access to children’s mental health support. We agree with the assertion of the Care Review that without addressing issues such as these that are outside the remit of children’s social care, “reforms to children’s social care risk treating the symptoms and not the cause”. 

9.4              Pathfinder and pilot areas will need significant support to ensure that they are able to both co-design and implement reforms, and continue delivering high quality support to children and families while those changes are taking place. This will include support for the workforce, much of which is already under enormous pressure and will be expected to implement new ways of working at the same time as working with vulnerable families. Research for the LGA by the Isos Partnership on structural change in children’s social care offers some vital learning to support this process, including the importance of political buy in, leadership and vision, communication, co-production and culture. Practical support such as dedicated funding and IT and management information systems that align across partnerships are also key. We have already heard concerns from some of the councils in pathfinder areas about the challenges of running pathfinder activity in an already pressured system.

9.5              The strategy commits £200 million in additional funding to support children’s social care. Any additional investment is of course welcome and will be vital to implement reforms. However, councils had to increase their children’s social care budgets by £1.5 billion (13.6 per cent) in the last year, demonstrating the scale of the financial challenge simply to try to maintain services. The Care Review recommended an additional investment of at least £2.6 billion over four years, prior to the impact of inflation, to improve the system to better meet children’s needs.

9.6              Furthermore, much of the additional funding committed in this strategy will go to pathfinder and pilot areas, with very little being allocated elsewhere. This means that children living in the vast majority of the country will not benefit from the additional funding that is desperately needed. 

9.7              While it is positive there is now a clear direction of travel, the strategy has led to a range of further consultations and a period of pathfinder and pilot activity. This is important for medium to long-term change, but the children’s social care system is in crisis now and most of the changes signalled in this strategy will not deliver results quickly. Inflation and pressures on council budgets will only compound the difficulties facing services, while the impact of the pandemic and the cost-of-living crisis is increasing children’s need for support every day.

9.8              If the Department truly accepts the challenge posed by each of the three major reports this strategy builds on, it must also accept that the challenge exists everywhere and there is an urgent need for immediate action. We already have a significant amount of evidence about what works, including that developed through the Department’s own innovation programme. Additional funding for all councils, not just those in pathfinder areas, can be wisely invested in stabilising the current system to ensure strong foundations on which to build future reform. It is also vital that all Government departments play their part in supporting children and families to thrive; without accessible health services, good quality housing, financial stability and more or all families, we will continue to see increased need for children’s social care services.

January 2024