Agenda item

A report of the Director of Finance was presented to inform the Corporate Affairs and Audit Committee of the spend in Children’s Services, in particular Children’s Care, over the last five years and the number of Children Looked After (CLA) for each year.

Details of the expenditure in Children’s Care for each of the past 5 years and the projected amount for 2021/22 were provided in a table at paragraph 3 of the submitted report.  Information about the numbers of CLA each year was also included.  The outturn expenditure figures included related to Children’s Care only and not the whole of Children’s Services.  The figures were end of year positions (ie as at 31 March each year).

It was noted that the services included within Children’s Care might have varied over the years due to various service reviews within Children’s Services, and therefore a direct comparison of expenditure between years might not be fully accurate.  In order to provide a more accurate comparison between years; the 2021/22 projected outturn figure excluded approximately £1.8m of expenditure relating to a number of budgets that transferred from Education and Partnerships to Children’s Care during the first quarter of 2021/22.

In addition, the number of CLA each year did not include some children (currently 291) who were under placed with friends and family under Special Guardianship Orders and received allowances, but who were not classified as Children Looked After.

The table at paragraph 7 of the submitted report provided information regarding external residential placement costs for the past 5 years, along with the number of children these related to.  It was noted that these figures were part of the figures in the table in paragraph 3 of the submitted report, and were not additional to those figures.  At the end of March 2020 there were 74 external residential placements and this had now reduced to 47, which was a large reduction. 

It was also highlighted that the 2021/22 projected outturn figures in the tables in paragraphs 3 and 7 of the submitted report, only included part year effects of the reductions in expenditure, and in future years there would be the full year effect of these.  It was confirmed that an update would be provided in the Quarter Three Revenue and Capital Budget Monitoring Report to Executive, to check whether there had been any fluctuations in the projected figures.

Whilst the expenditure was on a downward trajectory, this had been achieved alongside improvements in practice and outcomes for children, including a significant number of children securing permanence.   This had been externally validated in the latest Department for Education (DFE) Commissioner’s report in July 2021.   The improvements had led to overall CLA numbers decreasing by over 24% from a peak of 702 in September 2020, to 533 currently.  By the end of 2023/2024 it was anticipated that this figure would be 416.  Middlesbrough’s CLA rate per 10,000 children aged under 18 had decreased steadily month on month from a high of over 200 in September 2020, where it was the second highest for all unitary authorities in England, to a latest position of 162, which brought Middlesbrough closer to its statistical and geographical neighbours. 

In line with national trends, Children’s Social Care continued to be an area of financial pressure to the Council. The costs of these pressures in respect of increased level of need in relation to children in care and the increase in the cost of providing care was constantly monitored via regular reports to the Council’s Leadership Management Team and as part of the Council’s quarterly budget monitoring reports to Executive.

A number of plans were in place for 2021/22 to mitigate overspending within Children’s Services and these were detailed in the Revenue and Capital Budget – Projected Outturn position as at Quarter Two 2021/22 report to Executive on 9 November 2021.

The Council had an Ofsted Improvement Plan in place, and the financial situation was closely monitored jointly by the Service and Finance, and a three year plan had been drawn up to ascertain the estimated outturn position for the current and future financial years and therefore the potential MTFP impact.

Given the improvements required by Ofsted and the timescales for implementing these, a prudent financial planning approach had been taken, and a number of contingencies and reserves had been identified that should enable the pressure to be covered in the current and future financial years, assuming it stayed at around the same level.   As part of the MTFP Update report to Executive on 9 November 2021 and Council on 24 November 2021, additional funding of approximately £3.3m had been provided to Children’s Services from 2024/25 in order to achieve a steady state for the Service.  This would ensure that the improvements currently being made in Children’s Social Care were not compromised, and that the Service was on a firm financial footing, with an appropriate budget which could be managed within.  This would mean that the Ofsted Improvement Plan would be properly funded in the medium term.  The Plan would be closely monitored in real time and any amendments required to the level of funding provided would be made, as appropriate.

It was highlighted that this would mean Children’s Social Care would have reduced expenditure from over £9m projected spend in excess of their current budget at the start of 2021/22, to just over £3m in 2024/25.  This was approximately a £6m reduction in expenditure per annum by 2024/25.   One key area for savings was to reduce the use of agency staff. 

The Council was able to accurately forecast and manage costs in relation to Children’s Care as a result of a number of factors including: the transformation of that service’s leadership, its buy-in to the use of innovative business intelligence solutions to provide real time data, and close financial monitoring.

It also highlighted that when CLA were relocated to their home town of Middlesbrough it was important to have the appropriate services available.  Over the last two years a number of services had been developed including the Future For Families Hub where children had been returned from expensive external placements and been rehabilitated back home to family.   Middlesbrough services were quality assured by OFSTED with good ratings.  Permanency was secured within this provision and children had stability within their own area so they could continue with therapeutic intervention and at the same schools.  Otherwise, when children were placed out of area they did not maintain those links that created permanency, continuity and stability for them.  A sixteen plus service had also been developed to support children who were in external residential placements and give them an opportunity to come back to Middlesbrough and prepared for independence.  There were nine beds available and currently there were seven young people living there who were preparing to move on to adulthood. 

AGREED that the report was received and noted.