Overspends forecast for children’s services

Struggling councils are facing a £40m black hole by the end of the financial year as the number of vulnerable children requiring urgent support continues to rise.

One senior MP has warned councils face a ‘perfect storm’ of budget cuts and austerity-hit families, with every authority in Greater Manchester forecasting overspends in children’s services departments.

The figures have prompted renewed calls for a radical social care funding shake-up.

The rising costs of accommodating youngsters within the care system – often with external placements – are piling further pressure on already strained departments, reports reveal.

A majority of councils are predicting overspends of between £4m and £6m, with a combined shortfall of around £40m, based on half-year spending reports.

Meanwhile, ministers say the new local government funding settlement will provide more cash for social services.

But local Labour leaders and MPs have said it is a ‘stop gap’ and a more sustainable approach is urgently required.

According to the financial updates produced by councils in recent weeks, Tameside (£6.6m), Bolton (£5.2m), Manchester (£5.8m) and Salford (£5.6m) have the largest overspend predictions.

Meanwhile, Wigan, Oldham, Rochdale and Bury are around the £4m mark.

The totals may reduce before the end of the year if councils use savings found in other departments or reap benefits of service reform plans mid-year.

The shortfalls may also be plugged through reserves and in some areas the overspends come after councils increased their budgets for children’s services this year.

Such moves are ‘not sustainable in the long run’, Yvonne Fovargue, MP for Makerfield, has said.

“The demand for children’s services has been rising for the last 10 years. But all the while government funding for local government had been drastically reduced,” the shadow housing, communities and local government minister said.

“It’s not hard to see the problem this creates. Short of cutting vital, statutory services, councils have no choice but to overspend their budgets.

“The Government has to put local government finances on a sustainable footing if children are not to suffer.

“And that means much more than the stop gap funding announced in the last budget.”

Communities secretary James Brokenshire MP earlier this month unveiled the government’s funding measures for next year, including a ‘real-terms increase in core spending power’ – up from £45.1bn in this financial year to £46.4bn.

It includes additional support for social care, with an extra £650m committed. And £84m is being made available, over five years, to drive ‘improvements in social work practice and decision-making in children’s social care'.

“I’m delivering a settlement which paves the way for a fairer, more self-sufficient and resilient future for local government and a brighter future for the people and places they serve,” Mr Brokenshire said.

“This settlement delivers a real-terms increase in spending for local authorities in 2019/20 and gives them more control over the money they raise too, while protecting residents against excessive council tax rises.”

In the last financial year councils across Greater Manchster faced a £25m black hole, with children’s commissioner for England, Anne Longfield, saying the government had a ‘moral imperative’ to urgently address the situation.

In Rochdale, the council has received a £1.8m grant to ease both adult and children social care pressures, but bosses are likely to use it to help plug the forecast £4.8m black hole in its children’s services.

Despite the funding boost, leader Allen Brett said the government continues ‘to provide insufficient funding to meet the social care challenges’ faced on a daily basis.

Ms Powell MP, a member of the education select committee, added: “There are huge pressures on children’s services budgets as a result of the government’s failed austerity programme.

“It comes as no surprise that councils are overspending in this area when they face a perfect storm of rising demand due to less support for families, huge cuts to social security, and diminishing resources to tackle problems early on.

“It’s clear that ministers need to recognise the damage they have caused, break the cycle of less support and ensure we have genuine early intervention services that can help families early and nip problems in the bud.”

James Illingworth, Local Democracy Reporter