There can be no dispute that local authorities are spending a gargantuan amount of our money on institutional accommodation for children in care – residential children’s homes.
The latest figures available show that in March last year, there were 83,840 children in care, or “looked after” children. That is a two per cent increase on the previous year. Of those, 14,580 are in children’s homes. That is 17 per cent of them, up from 16 per cent in March 2022. So an increasing proportion of a growing number.
The cost of these places is astronomical – both financially and for the life chances of the children concerned. The children are more likely to end up in prison than at university.
Where the consensus view on the “sector” becomes disastrously flawed is assuming that all these 14,580 children need to be placed in children’s homes. Routinely it is taken as a given. The solution is then regarded as either more funding from central government, or more regulation (such as price controls) to stop “profiteering” by the owners of the children’s homes and to oblige them to cut fees.
Class war rhetoric blaming the profiteers has great bipartisan traction in the current climate. But if there was easy money to be made running children’s homes then wouldn’t new entrants come flooding into the market? The planning process make that tricky. If you think NIMBYs are resistant to new housing try opening a residential children’s home. But the reality is that costs are high even for those already in operation. The regulations and inspections are onerous, the staffing required intensive.
According to figures from the Personal Social Service Research Unit, local authority-provided residential care costs more (£5,059 a week on average) than the cost of independent providers of residential care (£4,153 a week on average.)
David Johnston, the Children’s Minister, has said that the current commissioning system is “not delivering outcomes for children”, adding “we are looking at how the market operates around profiteering and looking at transparency around that.” Jonathan Stanley, the manager of the National Centre for Excellence in Residential Child Care, warned that Johnston “has to be careful of destabilising the sector through investor flight created by lack of confidence.” Indeed. In May, the Outcomes First Group closed 25 children’s homes because of “recruitment challenges.”
The shortage of places will not be helped by threatening existing providers with more penalties. It is true that high regulation squeezes out smaller firms and reduces competition. The answer to that is to consider whether all the regulation is proportionate. Is some of it excessive or counterproductive?
But the main focus should be on the other side of the equation. A far more rigorous approach is needed. Most children in care could and should instead be given the permanent loving home that adoption would provide. That should be the strong legal presumption. Adoption has a phenomenal success rate even when children have been through traumatic experiences.
Instead, the norm is for the child to suffer neglect and abuse in their family home, to be placed with foster carers, to be sent back to the family home and then suffer more abuse and neglect, then back into care with different foster carers and so on. Placing more children for adoption would ease the shortage of foster carers. So if adoption was genuinely not viable then good and experienced foster carers would be available.
Some very challenging children would still need to be placed in institutional care. But what is extraordinary is that many children in care are in ordinary mainstream schools. Their behaviour is not so “challenging” that they can’t be in a normal classroom with a normal teacher. Yet adoption, or even foster care, is not deemed viable.
In 2023-24 the spending on children in care is due to be £6.1 billion, a 13.5 per cent increase from 2022-23. Surely given the horrendous outcomes that must be the worst value for money of any public spending item. But within the total, the costs for children in children’s home, rather than with foster carers, are much higher and the outcomes much worse.
Using Freedom of Information requests I found that every local authority that responded had children in care that combined being in mainstream education with being placed in children’s homes.
I asked about the number and the placement costs for such children in the last financial year, 2022/23. Also the highest cost for any individual child. Leicestershire was the highest on this measure. Last year the Council spent £732,502 on residential care for just one child who was also in mainstream schooling. Leicester spent £722,484. Those two councis topping the table suggests a geographical variation in costs – some of the councils in Wales and Scotland are lower down the table. Barnet is on 716,318, Doncaster £677,857, Hampshire £671,594 and Cornwall £629,200.
On the list below I’ve just put in the highest spending on one child in this category but typically a Council had several of them. Leicester has 25 in children’s homes attending mainstream schools at a cost of £152,039 a week. That’s £7.9 million a year. Essex also has 25 at present. It forecasts the cost will be £7.2 million this year. Oxfordshire has 31, the total cost for such children last year was £5.4 million. Consider that Oxfordshire County Council pays its Director of Children’s Services £136,406 a year. Much less than the residential placement cost for just one child.
Hertfordshire County Council produced the astonishing figure of £724,694 for a single child last year. However, I have not included them on this list as they added “this is an annualised cost for the most expensive placement for 22/23 – it does not mean that we spent this amount as the child was not in placement for a whole year.”
A big chunk of your Council Tax is paying to inflict a needless calamity on children in your area. There is a tendency for groupthink. The idea emerges that because a practice is widespread it can be shrugged off as justified. The reality is that it is a scandal for which all the councillors in these local authorities should be deeply ashamed.
UPDATE