Cllr Sir Stephen Houghton, chair of the Special Interest Group of Municipal Authorities (SIGOMA), looks at what the Autumn Statement meant for children’s services.

This week’s autumn statement came at a crucial time for councils. The last six months have seen an unprecedented number of local authorities declare that they are in financial difficulty, with warnings coming from right across the country.

The pressures have been caused by a perfect storm: stubbornly high inflation, rapidly rising demand, and the legacy of a decade of cuts which has reduced our members spending power by an average of 20% in England. I was pleased to co-sign a letter in advance of the Autumn Statement from the major Local Government Association (LGA) special interest groups. This set out the real risk to the financial sustainability of the sector.

Sadly, it appeared the Chancellor wasn’t listening.

There was no additional funding beyond what had been announced at the last settlement. Unsurprisingly, this has gone down very badly across the sector. It was especially disappointing that there was nothing additional for children’s services. This is the most significant pressure for not just our members but also the County Councils Network (CCN), which also found it was the most significant pressure in a recent survey.

Our recent research, which we published just before the Autumn statement, found that almost one-third of council funding is now being spent on children’s social care services, nearly double the amount compared to 2011/12. We found that the average SIGOMA member now spends 29% of their Core Spending Power on children’s services compared to just 15% in 2011/12. Across England’s upper tier councils, the average is now 27% – increasing from 14% since 2011/12.

While this trend is impacting all social care authorities, the poorest areas have seen the most significant increases. Since, 2011/12, the 15 (top 10%) most deprived authorities have seen a more than doubling of spending on children’s services as a proportion of spending power, from 15% to 31%. Blackpool, one of our members and the most deprived local authority in England, has seen a trebling in the proportion of spend from 15% to 45%. There are many causes driving this increase including the number of children currently in care. The number of children looked after by councils is now at a record level and has risen by 25% since 2011/12.

In addition, the care market for children is now broken – our members are telling us that some specialist placements for the most vulnerable children can cost as much as £1m per annum, with many costing between £250k and £750k.

As more and more is spent on social care services, there is less funding for the other services that residents rely on. This includes spending on preventive services that save money in the long run. As our co vice-chair, Cllr Graham Chapman, told the Levelling Up, Housing and Communities Committee recently, ‘the graph of doom is now happening’. Overall, it means that residents will see their council tax bills go up but will end up getting less.

This was why it was essential that the Government stepped in to provide additional grant funding targeted at social care in the autumn statement.

It is not sustainable for local authorities to be spending two thirds of their spending power on adult and children’s social care. This percentage will rise further in the coming years, as will the number of authorities that are at risk of issuing a section 114 notice.

The Autumn Statement highlighted there will be a 1% rise in spending on public services in the coming years. Despite the vital work that local government does, it is classified by the Government as an ‘unprotected’ department. This means that councils will face another round of austerity, following the decade of cuts since 2010.

The Statement was a huge disappointment and the final hope for councils is that the local government finance settlement, expected in late December, will deliver a surprise boost for funding. That, however, now looks increasingly unlikely.

For more on the Autumn Statement check out the following:

Autumn Statement: Hunt devolves but councils face new costs

Autumn Statement: Planning system to prioritise EV charging

Autumn Statement: Hunt announces surprise LGPS plan

Autumn Statement: Unprotected departments face further cuts

Autumn Statement: Level 4 devolution unveiled

Autumn Statement: Living Wage hike places council budgets under pressure

Autumn Statement: Business rates measures to be fully funded

Autumn Statement: Councils to be able to recover planning costs

Autumn Statement: Housing benefits unfrozen