Spending Review 2021 departmental supplement: Department for Education

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This supplement to the LGA’s Spending Review submission sets out further proposals which we would like to work with the Government on implementing. It should be read together with the main submission which also contains proposals relevant to various Government departments.

Unregulated placements and children's homes

The profile of children coming into care is changing. The number of teenagers in care rose by 21 per cent between 2012/13 and 2017/18, while the number of 0-5 year olds fell by 15 per cent. The reasons for this are varied, but feedback from councils indicates that child exploitation (both criminal and sexual) and rising numbers of unaccompanied asylum-seeking children is contributing to the increase. Older children are more likely to need accommodation in children’s homes, which are significantly more expensive than foster care, which, in itself, puts additional pressure on children’s service budgets as councils strive to give young people the right care for their needs.

The increasing need for children’s homes placements includes a rise in the number of children with complex or challenging needs. Councils report significant challenges in finding  suitable regulated placements for these children resulting in increased use of unregulated placements.

The Government has announced plans to make unregulated placements for children under 16 illegal. As we set out in our response to the initial consultation, unless sufficiency of placements is significantly improved, concerns around the suitability of placements for children and young people will not be addressed.

We await the outcomes of a market study by the Competition and Markets Authority looking into the provision of looked-after children’s placements in both foster care and children’s homes. We are concerned about the recent trend of children’s social care provision ownership being increasingly consolidated into a small number of providers without market oversight, the influence of private equity on the ‘market’ and high levels of profit-making by the largest operating groups. These factors are limiting the ability of councils to shape provision and ensure sufficiency of placements for the benefit of the children in their care and we are unclear as to the impact of these developments on children’s experiences.

Recent children’s homes capital funding of £19.5 million over two years announced by the Department for Education (DfE), focussing on local authority led, match-funded schemes that can meet differing local needs, is welcome. We encourage an extension of this capital funding scheme, alongside additional core revenue funding, to assist in the development of further provision and support councils and providers to meet children’s needs. 

While the introduction of national standards of accommodation for 16 and 17 year olds is welcome, we have highlighted there is a risk that the introduction of these will drive up the costs of provision as providers look to recoup costs. This happened when new regulations and quality standards were introduced in residential children’s homes several years ago. It is vital that the cost of implementing these reforms is not borne by councils.

Foster care

Foster carers provide loving homes for more than 57,000 children in England, ensuring that these children grow up in family settings and get what they need to thrive. We must ensure that all foster carers receive the support they need to fulfil this role, including training and financial support, that foster carers told the last Fostering Network State of the Nation report they sometimes felt they were lacking.

Adequate funding for children’s social care departments will support councils to ensure foster carers receive the fees, allowances and additional support they require. There have also been positive programmes trialled using DfE Innovation Funding, including the well-regarded Mockingbird Programme. We urge the Department to use the wealth of evidence developed through the Innovation Fund and fund all councils so they can provide the best possible support and ensure greater availability of and stability in placements. 

Kinship care

We must also consider funding to support the approximately 160,000 children in kinship care, many of whom are outside of the formal system but have similar needs to looked-after children – yet in many cases they and their carers receive considerably less support.

The charity Kinship has produced work identifying the potential financial and societal benefits of diverting children from the care system to financially supported placements with family and friends. This suggests that for every 500 children looked after under a special guardianship order rather than being looked-after, around £18 million could be released to be spent on further support for children. The Independent Review of Children’s Social Care is considering ways to make this change, however additional funding is needed in the short term to immediately provide additional support for kinship carers. This includes therapeutic support for children, financial support for carers (more than one in two of whom give up work or reduce their hours to support children) and peer support.


The Adoption Support Fund, worth £45 million in 2020-21, has been a lifeline for many adopted children and their families, however the annual nature of this fund limits the ability of councils and Regional Adoption Agencies to plan support, and creates uncertainty for families. We would like to see a long-term commitment to the Adoption Support Fund by the Government to make certain ongoing specialist support is available when it is most needed. This will help to deliver the Government’s ambition to ensure that adopted children and their families receive the help they need, when they need it.

Secure provision

We welcome the commitment by the Independent Review of Children’s Social Care to identify better approaches in securing provision for children across health, justice and local authorities. We are also keen to look at how we ensure the best possible support for children and young people who fall just below the threshold for secure provision but require specialist care. Given the small numbers of children nationally, it would be helpful to consider whether sub-regional, regional or national approaches might be more helpful for the most specialist provision, both to ensure the best possible support and the best use of available funds.

Youth services

Qualified youth workers and their colleagues across the sector will have vital roles to play in the recovery from the pandemic, provided they are adequately resourced. Youth services give young people safe spaces to go and trusted relationships with adults that can be the difference between being supported to make positive choices (including knowing where to go for help when it’s needed) and being drawn into negative situations.

With young people more likely to experience difficulties in finding employment as the country recovers from the pandemic, supporting them to pursue positive paths through this difficult time will be key to avoiding negative outcomes such as long-term unemploymentmental and physical health difficulties or criminal activity further down the line.

Significant funding is required to develop a strong, effective youth service that can support children and young people to reach their full potential and make a good transition to adulthood. With young people able to access these services, it can provide a vital stepping stone in the Government’s levelling up agenda. To support this, we are calling for the £500 million youth investment fund announced in September 2019 to be released as soon as possible to support the youth service sector, particularly local authority youth services.

This needs to be supported by recurrent, long term funding to provide essential support to local authority youth services. Council spending on youth services has been cut by 69 per cent since 2010/11, from £1.4 billion to £429 million. To ensure equal access for young people, funding needs to return to a similar level.