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In a report published today, the National Audit Office has concluded that the Department for Education does not fully understand what is driving demand for children’s social care, nor why there is such wide variation between local authorities in their children’s social care activity and costs, as it has not yet done the work to tie together available sources of information.

Full report

Pressures on children’s social care

In 2017-18 655,630 children were referred to local authorities because of concerns about their welfare. This was a rise of 7% since 2010-11, slightly above population growth for children aged 0-171. However local authorities carried out 77% more child protection assessments2. The reasons for this disproportionate increase in assessments compared with referrals are unknown.

The most expensive and serious cases, where children are taken into care, have risen by 15% since 2010-11 – more than double the rate of population growth. Local authorities expect to spend £4.2 billion on children in care in 2018-19, which is £350 million (9.1%) more than they budgeted for in 2017-18. There has been an increase in the use of residential care, but local authorities often lack suitable placements. Only 32% said they have access to enough residential homes for children aged 14 to 15 years, and 41% for those aged 16 to 17.

The Department does not fully understand what is causing increases in demand across all local authorities and, until recently, it did not consider this a fundamental part of its responsibilities.  It has previously estimated that 41% of the increase in the number of children in need between 2009-10 and 2016-17 was due to population growth, however, it had not quantified the contribution of other causes to almost 60% of the increase. The Department has put in place a programme of reform. In late 2017 it commissioned with others external research which they hope will explain demand and variation, but this will not be ready before summer 2019.

The activity and cost of children’s services vary significantly between different local authorities. The rate of children in need episodes3 ranges from 301 to 1,323 per 10,000 children. There is even greater variation in the amount local authorities spend on children’s social care, ranging from £566 to £5,166 per child per year across different local authorities.4

The NAO’s analysis suggests that local authority characteristics may account for 44% of the variation between different local authorities over time in how they respond to demand for children’s services. Different levels of deprivation could explain 15% of the variation between local authorities and a further 10% of this variation may be accounted for by changes which affect all local authorities equally at the same time, such as the introduction of a new policy. The relevant characteristics of local authorities and their areas will include custom and practice in children’s social care, local market conditions, and historical patterns of demand.

The report found no link between local authorities’ spending per child in need and the quality of services, as measured by Ofsted. Some services are rated “Good” by Ofsted with spending of £570 per head, while others receive the same rating with spending of £4,980. Similarly, there is no correlation between Ofsted ratings and changing numbers of child protection plans, nor do they provide any indication of how likely local authorities are to reduce the number of looked after children.

Local authorities’ spending power has reduced by 28.6% since 2010. They have responded by reducing spending on non-statutory preventative children’s services, including children’s centres, and increasing spending on statutory social work.5 For example, the number of Sure Start children’s centres has fallen by just over 500 since 2010. Local authorities which have closed children’s centres have not had any consequential increases in child protection plans.

The NAO recommends that the Department promptly improves its understanding of children’s social care and builds on the NAO’s own research and modelling to help it explain demand and local variations and improve the effectiveness of its decisions.

“Over two years ago we reported that the Department for Education’s progress in improving children’s services was not up to scratch. Since then the Department has adopted the target of giving all vulnerable children access to high quality support, no matter where they live, by 2022. The Department has started to build its understanding of variations in services, but it should know more than it does. Even with this understanding, the Department faces a tall order to achieve its goal within three years.”

Amyas Morse, head of the NAO, 23 January 2019

Notes for Editors

Key fact

£8.8bn
amount spent by local authorities on children's services in 2017-18

655,630
number of new children's social care referrals in the year ending 31 March 2018

91%
percentage of local authorities that overspent on their children's social care in 2017-18

Population

5.2%
growth of the 0 to 17 population between mid-2010 and mid-2017

26%
increase in number of children placed on a child protection plan between 2010-11 and 2017-18

404,710
Children in need, as at March 2018

22 to 156
range of variation of child protection plans per 10,000 children between local authorities in 2017-18

Our analysis

15%
proportion of variation in child protection plans explained by the difference in deprivation between local authorities

44%
proportion explained by the difference between local authorities and their areas

10%
proportion explained by national policy changes

6%
proportion explained by levels of spending on children's social care and vacancy levels for children's social workers

25%
proportion of variation not explained by our model

Spending

£872 million
total national overspend on children's social care in 2017-18

£8.0 billion
budgeted spend for children's services in 2017-18

£8.6 billion
budgeted spend for children's services in 2018-19

1. Between 2010-11 and 2017-18 the 0-17 population of England increased by 5.2%
2. A referral is a request for services to be provided by children’s social care. A child protection assessment is conducted by local authorities when they consider a child to be at serious risk of harm.
3. The Children Act 1989 defines children in need as children under 18 who need local authority services to: achieve or maintain a reasonable state of health or development; to prevent significant or further harm; or because they are disabled. A “children in need episode” is where a referred child meets this definition. The number of episodes is greater than the number of children in need because it is possible for a child to be referred to children's social care more than once during their childhood.
4. Some of this variation could be attributable to differences in the way that individual local authorities define each children in need episode. While some of this variation is understandable, the Department has not set out what level of variation it considers acceptable.
5. The proportion of spending on preventative services, such as children's centres, fell from 41% in 2010-11 to 25% in 2016-17. Spending on statutory activities rose from 59% to 75% over the same period.
6. The NAO has reported on children's social care on three occasions in recent years: Children in care (2014); Care leavers' transitions to adulthood (2015); and Children in need of help or protection (2016).
7. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
8. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £741 million in 2017.

Contact

NAO Press Office 
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk