How many more missed chances before the Government acts on the funding gap?

Posted by Dan Breslin / Tuesday 13 February 2018 / Government spending

Last week the Government announced the final funding package local councils will receive in 2018/19.

Despite endless calls to address the £2 billion funding gap in children's services, there was no additional funding from central government for these services. There was no recognition of the challenge this poses to councils and no mention of children in the Secretary of State’s statement.

This is disappointing, to say the least. We have seen government funding for local authority children's services fall by £2.4 billion since 2010.  At the same time, there has been a 108% increase in referrals to children’s social care services. Demand is increasing as funding falls. This is creating an unsustainable funding situation for councils across the country. And it can't be said the Government hasn't been warned about the challenge councils’ face.


Councils overspent on children’s social care by more than £600 million last year. Just last week a council had to invest more than a £1 million to cover overspend because of a rise in demand on children’s social care – the sharp end of children’s services. With a fall of 40% in spending on early intervention across England since the start of the decade the growing demand for costly crisis intervention is hardly surprising.  

Local leaders are now saying children’s services are the biggest pressure for councils, above Adult Social Care for the first time in three years. As the Local Government Information Unit have pointed out, councils are no longer able to shield children's services from the worst of the cuts.

In response to all these warnings, the Government allocated a further £150 million for adult social care. This helps with one well documented pressure on local government but doesn’t deal with the challenges facing children’s social care.


The Government has suggested councils could increase council tax to help pay for local services. But this isn't as simple as it sounds. If the rise goes above a certain threshold, the council has to hold a local referendum. Aside from the political realities of holding a vote on paying more tax, these referendums have been estimated to cost as much as £300,000. Not an appealing prospect for a council dealing with cuts of 40% to their overall funding since 2010.

The threshold for raising council tax next year has been set in line with inflation at 3%. This might sound generous but with the cost of services increasing in line with inflation this increase is only going to help keep pace with growing costs in 2018/19.

This threshold is set too low to allow councils to bring in additional revenue to cover future increases in demand without going through a costly and likely fraught referendum process which isn’t guaranteed to succeed.

Moreover, this is a funding crisis that should be dealt with by central government. Councils are doing what they have to do according to laws about supporting and protecting children. Central government sets these laws, and so should be providing the funding for them to be followed through.

It is good to see additional funding for adult social care. Central government now needs to do the same for children, finding additional resources for vital children's social care services.

With a Budget later this year and a Comprehensive Spending Review in 2019, we will keep the pressure on government until they stop overlooking the needs of vulnerable children.