Turning the tide

Government funding for children’s services has fallen significantly since 2010. This fall is forcing local authorities to make challenging decisions.

As demand for crisis support increases, councils are being forced to target early intervention services for savings. Cuts to these services are leaving too many children and young people without the services they need, missing the opportunity to provide help early. This approach  is leading to an increasing  stream of vulnerable children and young people reaching  crisis point where social services are forced to step in. It is time to turn the tide and invest in a preventative approach.

Read our report

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Key findings

New analysis by Action for Children, The Children’s Society and the National Children’s Bureau has found:

  • Central government funding for children and young people’s services has fallen from £10.0 bn in 2010/11 to £7.6 bn in 2015/16 in real terms. This is a fall of 24%.
  • Local authority spending on children and young people’s services has fallen from £10.0 bn in 2010/11 to £8.4 bn in 2015/16 in real terms. This is a fall of 16%.
  • Local authority spending on early intervention services for children and young people, such as children’s centres and family support, has fallen from £3.6 bn in 2010/11 to £2.1bn in 2015/16. This is a fall of 40%.
  • Local authority spending on late intervention services for children and young people, such as child protection and children in care, has increased from £5.7 bn in 2010/11 to £6.1 bn in 2015/16. This is an increase of 7%.
  • Late intervention now represents 73% of local authority spend on children and young people’s services. This is up from 58% in 2010/11.
  • Early intervention now accounts for 26% of local authority spend on children and young people’s services. This is down from 36% in 2010/11.

Overall, local authorities are seeing significant reduction to funding for children’s and young people’s services. This is falling year-on-year and creating a sizeable gap between the cost of delivering these services and the funding available from central government to pay for them. In 2015/16 there was a £872 million gap which is set to increase in future years.

Central government does provide earmarked funding for early intervention services at a local level (the Early Intervention Grant). This is not ring-fenced funding so councils can spend it as they see fit.  This is estimated to fall from £3.2 billion in 2010/11 to £929 million in 2019/20 – drop of 71%.

Within the reduced budgets, early intervention services are bearing the brunt of funding cuts. Since 2010/11, early intervention spending by local authorities has fallen £1.4 bn. This is in comparison to a £398 million increase in late intervention spending.

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What needs to happen?

1. The Government should urgently address the funding gap in children’s services.

There is a growing gap between demand and resource, leaving too many children without the support they need. Analysis in this report has shown that it would take an additional £2bn a year just to return funding to 2010 levels.

2. The Government should work with local authorities to ensure additional funds are used to improve early intervention.

Alongside additional funding to address the growing gap, the Government should look at mechanisms to ensure local authorities invest in services that address problems early. Currently, local authorities struggle to provide early intervention services as well as meeting their statutory obligations towards children with in crisis. Additional funding could be used to facilitate services such as support for parents and community-based youth services. The aim would be to help more children before problems escalate.

3. Future decisions about investment in children’s services should take into account local need, and the Government should clarify its plans to reform local government funding.

The Government should ensure local authorities receive the level of funding necessary to respond to local demand. We know that local authorities with the most deprived communities have suffered the greatest reductions in spending power, leaving many children with multiple vulnerabilities lacking much-needed access to support. This worrying trend must be reversed.

Ministers must also put an end to the uncertainly surrounding the future of local authority funding overall, including the formula grant.

Read the full report