A new Council finance report reveals that Nottinghamshire County Council is spending an additional £7.5 million this year to meet a sharp rise in the number of children taken into care and requiring residential or foster care placements.
Nottinghamshire is the latest local authority to set out the costs of a nationwide trend, where a rise in looked after children (LAC) has pushed almost 90 per cent of councils with child social care responsibilities over budget.
Early in January, the Local Government Association found that 133 out of 152 councils responsible for children’s services spent more than they had originally budgeted for in 2017-18, an estimated £807 million in total. Nottinghamshire was one of those authorities, having spent £6.4 million more than it originally planned last year.
The latest figures from Nottinghamshire for 2019/20 show that 875 children were looked after by the local authority as of 31 March 2019, compared with 797 as of 31 March 2018, resulting in higher than expected cost pressures on the Children & Young People’s budget.
The new Finance & Major Contracts Management Committee report is due to be discussed and debated on Monday 15 July. Councillor Richard Jackson, Committee Chairman said:
‘We will invest the additional money required to ensure the best possible care is provided to the children looked after by Nottinghamshire County Council. There is no greater responsibility for a local authority than to identify vulnerable children needing our support and protection, and ensure that they are provided with a living environment where they are as safe as they can be.’
‘This is our immediate, most important priority, but beyond that, we will also continue working with other partners who provide children’s care services, to identify why there is such a stark increase in children needing support across the country.
‘Even before this additional spending, our budget for children and young people’s services was set at £127 million this year. Additional investment is a short-term answer to this spike in demand, but in the longer term, we will examine the way we spend money across all children and young people’s services, and other budgets, to see if there are different approaches that could reduce the number of children reaching a stage where they require urgent interventions.’
Also on Monday 15 July, Nottinghamshire County Council’s Children & Young People’s Committee will be asked to agree an additional £300,000 investment to increase the ‘levels’ payment rates the council provides to its internal foster carers, with a view to recruiting more foster carers to meet the rising demand described above.
Councillor Philip Owen, Chairman of the Children & Young People’s Committee, said:
‘An internal fostering placement costs the public approximately £300 per week less than a fostering placement purchased from the independent sector, so our aim is to increase this authority’s internal foster carer establishment. This will reduce the amount we currently have to spend on independent placements and thereby tackle one of many issues behind the spending pressures we are presently experiencing.
‘I must acknowledge that the kind of people who devote their time and their lives to being foster carers are not primarily motivated by financial considerations, but it is still morally right, and cost effective for the public purse, to ensure that the payment they receive is appropriate.’
The financial pressure facing local authorities across the country was the main focus of discussion as local government leaders, councillors and ministers gathered at the Local Government Association (LGA) Annual Conference in Bournemouth earlier this week. The LGA revealed the initial findings of its survey of council finances, which found that:
• 1 in 3 councils fear they will run out of funding to provide their legal duties by 2022/23. That number rises to almost two thirds of councils by 2024/2025 or later.
• Almost a fifth of councils (17 per cent) are not confident of realising all of the savings they have identified to make this year (2019/20).
• An unprecedented rise in demand means many councils are having to spend more than they planned for on children’s services and on adult social care.
Nottinghamshire County Council’s financial position as set out in the Financial Monitoring Report for 15 July reflects this national picture. Despite the Council making ambitious provisions for increasing demand in Adult Social Care and Children’s Social Care of more than £25 million this year, the number of children requiring care and support has risen even faster than anticipated.
Councillor Kay Cutts MBE, Council Leader, who attended the LGA Conference, said:
‘County Councils have played their part in the national austerity drive, making unprecedented efficiencies whilst transforming public services. Nottinghamshire alone has found efficiency savings of £287.5 million since 2010. However, the future looks increasingly difficult unless we receive further resources from the Government, with County Councils facing £3.2 billion of funding pressures over the next two years.’
A motion has been placed on the agenda for the Full Council meeting of Nottinghamshire County Council on Thursday 11 July, proposed by Councillor Richard Jackson and seconded by Councillor Reg Adair. It highlights an independent report on councils’ financial sustainability up to 2025 by PricewaterhouseCoopers LLP (PwC), which was published in May by the County Councils Network (CCN). The report found that rising demand for services and rising costs, driven in part by inflation, could contribute to councils needing an additional £51.8bn of funding over the period 2019-2025.
Councillor Reg Adair, Deputy Leader of the County Council, added:
‘I will be asking County Councillors to unanimously back the Council Leader to write to the Secretary of State for Housing, Communities & Local Government and the Chancellor of the Exchequer about the funding pressures we face. The letter will highlight our support for the County Councils Network’s Fairer Future for Counties campaign and draw the attention of ministers to the evidence in the independent PwC report, which proves that the present system for funding councils is unfit for purpose.
‘The Government is already working on a new funding formula for councils which we hope will provide a fairer share of resources, for County Councils in particular, in order to ensure a consistent level of service across the country. However, I am concerned that Westminster is currently pre-occupied with Brexit matters, when the reality is that local government literally cannot afford to wait any longer for new money.’
Drawing on background from PricewaterhouseCoopers ‘Independent Review of Local Government Spending Need and Funding’, Nigel Stevenson, Service Director Finance, Infrastructure & Improvement, comments on trends in social care spending:
‘Spending on adult social care will rise by £6.1bn nationally by 2025 compared with a decade before. By 2025, counties will account for 47% of all spending by local government on adult social care and will need to spend an additional £2.9bn annually compared to 2015/16 on these services due to rising demand and costs.
‘Spending for children’s social care will rise faster than any other local government service. Spending need on children’s social care will rise nationally by 48% during the period, compared to 43% for adult social care. By 2024/25, CCN member councils will account for 37% (£4.5bn) of all spending need on this service, with the annual spending requirement increasing by £1.4bn since 2015/16.
‘Yearly council tax rises, using their reserves, and making services more efficient and productive, will not be anywhere near enough to fill the funding gap; which means that councils will have to set out further rounds of cuts to local services, providing a basic, ‘bare minimum’ core offer to residents. The fear is that taking these actions will not be enough to prevent some councils from being unable to manage their budgets, with the scope for savings narrowing each year.
‘The national political uncertainty and an unresolved Brexit means the chances of the Government carrying out a three-year Spending Review this year look increasingly unlikely. Instead, councils may face a one-year roll-forward settlement, with the first casualty being the long-waited Green Paper on Adult Social Care that was first promised in the March 2017 Budget. On 3 July the LGA challenged the Government with a ten-week deadline to publish the Green Paper.
‘The PwC report demonstrates the need for government to provide councils with a significant funding boost in this year’s anticipated Spending Review over the next three years or provide immediate clarity and emergency funding for next year if the review is delayed owing to Brexit uncertainty. This is the only way to ensure councils can meet their legal duties to provide dignified care for our elderly and disabled, protect children, and protect the wide-range of other valued local services which also make such a positive difference to communities and people’s lives.’