A decade of change for children's services funding

The evidence is clear that – whether manifesting in mental health, domestic abuse or academic performance – the pandemic has had a detrimental effect on the most vulnerable children in England. As a country, we need to find ways to support these children and young people to avoid the short-term challenges becoming long-term impacts on life outcomes.

Providing the support that these vulnerable children and young people need would be a challenge at any time. But the context for children’s services in England is a challenging one. PBE’s new research, commissioned by the Children’s Services Funding Alliance, shows that funding for Local Authority children and young people’s services - such as parenting programmes in children’s centres and local safeguarding teams who step in and protect children from harm - fell dramatically in the aftermath of the 2008 financial crisis and has not recovered.

Despite a continuation of the annual growth in spending seen since 2016-17, the total amount of expenditure on children’s services in 2019-20 remains £325million per year lower than it was in 2010-11. This is despite the number of vulnerable young people in England increasing by 4% between 2010-11 and 2019-20.

PBE’s research raises concerns of a false economy in children’s services, where the need for Local Authorities to cut costs has fallen predominantly on early intervention spending such as children’s centres, family support services and services for young people. This declined by 48% between 2010-11 and 2019-20, and has contributed to the closure of almost 1,000 children’s centres and 750 youth centres since 2009. Meanwhile expenditure on late interventions such as youth justice services, looked after children and safeguarding has increased by 34% - reflecting greater demand when children are closer to crisis.

This new research suggests that the current direction in children’s services is neither delivering value for money to the taxpayer, nor delivering the best possible outcomes for children, with a risk that this has already sparked a vicious circle for children’s outcomes and taxpayer costs. Without the support of preventative measures, the number of young people and families that go on to develop more severe difficulties is likely to increase. This will drive up the demand for late intervention services such as care placements. The supply constraints that already exist in these markets are likely to be further exacerbated, leading to further cost increases for these services.

This is likely to have contributed to the increase in the costs of these scarce placements over the period, with the average cost per Looked After Child increasing by £11,000 per year, from £53,000 in 2010-11 to £64,000 in 2019-20. This will add further pressure to Local Authority budgets, leading to further reductions in budgets for preventative measures and subsequently a further worsening of outcomes. The impacts of this may not just be limited to Local Authority budgets but has potential further implications for demands in health services, benefits and the wider criminal justice system.

The reductions in expenditure on children’s services have not been felt evenly across the country: those Local Authorities with the highest levels of deprivation are experiencing the biggest cuts in expenditure. Spending per young person actually increased by 7% between 2010-11 and 2019-20 in the least deprived Local Authorities in England, however, for the most deprived Local Authorities the spending per young person has declined by 14%.

In addition to this, the most deprived Local Authorities have also experienced the most significant declines in early intervention spending. Sunderland has reduced expenditure on early interventions by an enormous 83% over the last decade, shortly followed by Walsall (81% reduction) with Stoke-on-Trent and Herefordshire each reducing expenditure by 77%. You can explore how Local Authority expenditure on children’s services has changed in your area on the interactive map below.