Figures published on 20 November by the Special Interest Group of Municipal Authorities (SIGOMA), an organisation representing 47 urban authorities including Nottingham, show that almost one-third of council funding is now being spent on children’s social care services, almost double the amount compared to 2011/12.
Chairman of SIGOMA, Cllr Sir Stephen Houghton, says the situation has left councils at risk of Section 114s and added: “These demand-led pressures are leaving councils financially stretched and at breaking point.”
A Government spokesperson said: “Local authorities have seen an increase in core spending power of up to £5.1bn or 9.4 per cent in cash terms on 2022/23, with almost £60bn available for local government in England.”
Nottingham City Council is now having to spend more than £3.7m every month on private companies to look after children in care after costs in the sector soared, a Freedom of Information request has revealed.
Recent figures suggest around 700 Nottingham children are in the care of the authority, up from just over 600 in 2016.
They may be living with foster carers, at home with parents but under supervision of social services with shared responsibility, in a residential home or a placement or settings such as secure units.
Now a response to a Freedom of Information (FOI) request shows the average annual cost of a looked-after child was £81,058 in 2022/23, up from £68,141 in 2021/22.
Over the same period private care providers were paid a total of £44,990,000, by the council, or around £3.7m every month.
This represents an annual increase of 34.4 per cent on the £33,476,000 spent the year before.
Owing to ongoing staffing problems, a total of £3,895,726 was also spent on agency staff to support children’s services, up from £3,454,479 the year before.
The figures were made public as the council faces a £23m in-year budget gap and is considering the possibility of a Section 114 notice, the closest an authority can legally get to declaring bankruptcy.
Cllr David Mellen (Lab), the leader of the council, previously said that some of the placement costs for children with multiple needs “have just gone through the roof”.
The FOI response shows some of the costliest placements came in at upwards of £49,000 per year for one child.
“People are making a lot of money out of vulnerable children, which is rather distasteful in my view,” he said.
UNISON head of local government Mike Short said: “The rocketing costs of essential services are pushing councils over the brink.
“Children’s social care is complex, important work providing a lifeline for a generation. But the overwhelming pressure on staff means there are huge vacancy levels, causing local authorities to rely on expensive agencies to fill the gaps.
“The chancellor must provide significant extra funding for all councils to tackle these costs, without forcing cuts to be made elsewhere, so children get the support they need.”
Terry Galloway, who grew up in care and today campaigns for children in care and care leavers, added: “The possibility of Nottingham City Council facing a Section 114 notice is a stark reminder of a crisis that extends far beyond our city’s borders.
“This isn’t just about balancing budgets; it’s about the lives of our children in care and those leaving care, they are suffering due to widespread inefficiency at every level of government.
“Local councils don’t have a choice, on a Friday night as everyone goes home for the weekend, the relentless pressure persists. The truth is, if children need help, then social services have to act.
“We must recognise that when we properly fix the children’s social care system, we wouldn’t only be saving lives; we’d also be freeing up vital funds for the non-statutory services that our communities hold dear.”
Generally, the number of children who are now looked after by local authorities has reached record levels, having risen by 25 per cent since 2011/12.
The increase, combined with inflated costs, is posing a significant financial challenge to many councils.
