LGA warns of “broken” market amid sharp rise in children’s social care placements costing £10k per week

The number of children’s social care placements costing £10,000 or more per week has risen by more than 1,000% in five years, a survey of councils by the Local Government Association has revealed.

According to the LGA, there were 120 such placements in 2018/19, rising to 1,510 in 2022/23, while the proportion of councils with at least one of these placements has increased from 23% to 91% over the same period.

The highest cost placement was £63,000 a week. For most councils the highest cost fell between £9,600 and £32,500 a week, the LGA said.

According to the survey, nearly every council (98%) said a lack of choice in placements was driving the high prices.

Over nine in 10 (93%) councils also highlighted children needing help with increasingly complex needs, including mental health needs or exhibiting challenging behaviours, as a factor.

The LGA claimedthe findings demonstrate that the market for children’s social care placements is “broken”.

It insisted that councils are “working hard” to expand placement capacity, including developing their own children’s homes and running foster carer recruitment campaigns. However, the LGA has called for urgent investment in provision.

The LGA has set out three key areas for government action:

• Roll out planned Department for Education programmes on the recruitment and retention of foster carers to all councils
• Expansion of children’s homes through capital investment, recruitment and professional development of children’s homes workers and working with the voluntary and community sector
• Work with the Department of Health and Social Care and NHS England on both inpatient mental health facilities (the number of inpatient mental health beds for teenagers fell by 20 per cent between 2017 and 2022) and joint delivery of placements for children with complex mental health needs

“It is also vital that councils are able to invest in earlier support for children and families to reduce the number of children who need to be in the care of their council, and that councils are provided with longer term funding settlements to enable them to plan ahead,” the LGA said.

The LGA has called for urgent funding for children’s social care in the upcoming provisional Local Government Finance Settlement, warning that the lack of investment in the Autumn Statement “risked councils’ ability to provide the critical care and support that children rely on every day”.

Cllr Louise Gittins, Chair of the LGA’s Children and Young People Board, said: “With more children needing help with increasingly complex and challenging needs, what is most important is ensuring they get the best care and support. It is concerning that in many cases, a lack of choice means provision is not fully meeting children’s needs.

“The astronomical costs of care placements mean there is less money available for councils to spend on earlier support for children and families.

“These findings are indicative of a broken market for children’s social care placements, but it doesn’t have to remain this way. With cross-government support, it is possible to make sure we have the right homes for all of the children in our care.”

John Pearce, President of the Association of Directors of Children’s Services (ADCS), said: “This report highlights several important issues that ADCS has been consistently raising with government for years. The unmanageable costs of children’s social care placements, and the significant shortfall in suitable homes for children in our care has led to a crisis in the sector that needs immediate national action.

“Local authorities are the sole purchasers of placements, yet are often held to ransom by private providers due to lack of sufficiency meaning costs can be thousands of pounds a week for individual placements for children in their care. Providers can pick and choose which referrals to accept and set the price due to overwhelming demand particularly for placements for children with the complex needs.

“These and other issues, such as profiteering by some private providers which takes money out of the system when it should be spent on children, cannot be solved by councils alone and central government action is needed to help us meet the needs of children in care.”

Pearce said a comprehensive national placement strategy is needed “to ensure the right placements are available in the right locations and at the right time”.

He added: “This will need national rules to intervene and regulate all of those who wish to provide homes for our children in care. The government must now act to ensure children can access support and homes that meet their needs as well as ensuring value for money from public funds.”

A Government Spokesperson said: “Our ambitious reforms to children’s social care will focus on more early support for families, reducing the need for crisis response at a later stage, with plans backed by £200m to test and refine our approach.

“We are also investing £259m to support local authorities to create more placements for children in high-quality and safe homes.”