High-cost children’s social care placements survey

Background

In October and November 2023, the Local Government Association sent an online survey to all councils providing children’s social care in England. The purpose of the survey was to assess the frequency and costs arising from high-cost children’s social care placements, as well as to explore reasons why the costs of certain placements are particularly high. A total of 124 councils responded to the survey – a response rate of 81 per cent.

Key findings

• Based on the responses to this survey, local authorities across England spent approximately £4.7 billion on children’s social care placements in 2022/23, compared to a budgeted figure of £4.1 billion – an overspend of almost £670 million (16 per cent).
• Similarly, it is estimated that local authorities across England had a projected expenditure of £5.4 billion on children’s social care placements for 2023/24, compared to a budgeted figure of £4.7 billion – an overspend of approximately £680 million (14 per cent).
• On average, these figures equate to approximately £31 million per council in 2022/23 and £35 million per council in 2023/24, with an average overspend of £4.4 million per council for both financial years.
• Based on the responses to this survey, it is estimated that English councils paid for approximately 120 placements costing £10,000 per week or more in the 2018/19 financial year, compared to over 1,500 in 2022/23.
• In 2018/19, 23 per cent of respondent councils paid for at least one placement costing £10,000 per week or more, compared to 91 per cent in 2022/23.
• High-cost placements tended to be emergency more frequently than planned placements, although they were if anything more frequently long-term than short-term placements.
• The most frequent factors cited as driving the high cost of certain placements were a lack of choice in providers, children in care exhibiting challenging behaviours, and complex or significant mental health needs.
• Based on the responses to this survey, it is estimated that English councils supported almost 11,000 unaccompanied asylum-seeking children (UASC) in 2022/23, along with almost 13,000 care experienced former UASC.
• Respondents noted a wide variety of additional issues arising from high-cost placements, including observations that the situation has deteriorated still further following the beginning of the 2023/24 financial year.

In October and November 2023, the Local Government Association sent an online survey to Directors of Children’s Services at all local authorities in England which provide children’s social care. The purpose of the survey was to assess the numerical and financial impacts of children’s social care placements with especially high costs relative to the amount of care provided, and to explore reasons behind these high costs and ways in which they could be reduced.

Directors of Children’s Services (DCSs) of single-tier and county councils in England were emailed a link to complete the survey. Each DCS was permitted to delegate completion of the survey to whichever officer was best placed at their local authority to provide the required information. Of the 153 councils providing social care services in England, a total of 124 responded to the survey – a response rate of 81 per cent. This level of responses suggests that the results of this survey are likely to be broadly representative of all social care councils in England.

Table 1 shows a breakdown of response rates by type of social care council. This demonstrates that all council types had a high level of response to the survey, although London boroughs had the lowest rate of participation (at 73 per cent) and metropolitan districts had the highest (at 86 per cent).

Table 1:Response rate by type of authority

Table 2 shows a breakdown of response rates by region. This demonstrates that participation was relatively high across all regions, ranging from 71 per cent in the West Midlands to 90 per cent in the East Midlands. These findings support the reliability of the results in representing social care authorities of all types and across all areas of England.

Table 2: Response rate by region

This section contains analysis of the full results from the survey. 

Budgets and expenditure for children in care placements

Respondents were asked to provide both their budget and total net expenditure for the financial years 2022/23 and 2023/24. In the latter case, respondents were asked for their current projected total net expenditure as of the time they completed the survey. For these questions, respondents were asked to include all placements for looked after children, whether in-house or independent, but to exclude any costs for children who are adopted or have a Special Guardianship Order (SGO).

The figures provided were tested for data quality and extrapolated to produce overall estimates for budget and expenditure across England as a whole, as well as an average expenditure per council. The results of these calculations are displayed in Table 3 below.

As these results show, it is estimated that local authorities across England budgeted an expenditure of just under £4.1 billion for the financial year 2022/23, compared to an actual expenditure of over £4.7 billion for this time period. This amounted to an overspend of approximately £670 million, equivalent to around 16 per cent of the original budgeted expenditure.

Similarly, the £4.7 billion budgeted expenditure for 2023/24 was outstripped by an estimated actual expenditure of £5.4 billion, a difference of approximately £680 million, or 14 per cent of the original budget.

As an average expenditure per council, these figures amount to approximately £31 million spent per council in 2022/23 and approximately £35 million per council in 2023/24. In both years, there was an average overspend of £4.4 million per council.

It should be borne in mind that the actual expenditure for councils varied widely, depending on a range of factors, chiefly the size and population of each council. The average expenditure per resident reported by councils was £88 for 2022/23 and £99 for £2023/24.

Table 3. Estimated budget and expenditure for English local councils

Base: figures are extrapolated for all English councils based on the number of respondent councils who answered each question (122 councils for 2022/23 budget and expenditure, 121 councils for 2023/24 budget and expenditure).

Number of placements by cost bracket

Respondents were asked to provide their number of placements for children in care for the financial years 2018/19 and 2022/23, broken down by five brackets categorised by the weekly cost of these placements. As with the previous questions, this question applied to all placements for children in care, including in-house and independent provision, but excluding children who are adopted or otherwise not in the care of the local authority.

As above, the figures provided by respondent councils were used to estimate an overall picture for all councils in England. The results of these calculations are summarised in Table 4, indicating that there were approximately 75,700 placements for children in care in 2018/19, compared to 92,800 in 2022/23. In 2018/19, 120 of these were classified as costing £10,000 per week or more, which was a tiny minority of the total (0.2 per cent), compared with over 1,500 in 2022/23. Whilst this remained a slim minority of 1.6 per cent, it represents over a twelvefold increase since 2018/19, demonstrating that these extremely high-cost placements represent a rapidly increasing issue for local authorities.

Table 4. Breakdown of placements by cost bracket

Base: figures are extrapolated for all English councils based on the number of respondents who answered this question (116 respondents). Please note that figures have been rounded to the nearest ten to acknowledge the uncertainty involved in providing such estimates.

Looking purely at the 116 respondents who provided information on budgets and costs, 23 per cent reported having at least one placement in a cost bracket above £10,000 per week in 2018/19. By contrast, 91 per cent reported at least one placement above £10,000 per week in 2022/23. It should be noted that a single placement of any duration in the year sufficed to be included by local authorities in this figure, and in many cases this may have represented a comparatively modest increase in actual expenditure due to the placement being short-term and/or just over the £10,000 per week threshold, making this increase less drastic than it might appear.

Table 5. Percentage of authorities with at least one placement in each cost bracket

Base: all respondents who answered this question (116 respondents).

Classification of high-cost placements by timescale and planning

Respondents who indicated that they had one or more placements for children in care costing £10,000 per week or more were asked to estimate how often these placements were emergency or planned, along with how often these placements were up to three months in duration, compared to how often they were over three months in duration. Respondents were asked to estimate how often their placements fell into each of these four cross-categories, along with other placements not as easily categorised, on a scale from “very frequently” to “never.”

Table 6 shows the distribution of responses for this question. This shows that the most common categories of high-cost placements were emergency placements lasting up to three months and emergency placements lasting over three months, with emergency short-term placements reported as very or somewhat frequent by 45 per cent of respondents, and emergency longer-term placements reported by 42 per cent. These were both considerably more prevalent than short-term and longer-term planned placements. Among planned placements, however, longer-term placements lasting over three months were reported considerably more often than planned placements lasting three months or less, with the former reported as very or fairly frequent by 13 per cent, compared to 27 per cent in the case of the latter.

Overall, 44 per cent of respondents reported that their high-cost placements were emergency placements very or somewhat frequently, compared to 20 per cent for planned placements. By contrast, 30 per cent of respondents said that high-cost placements were frequently short-term, whilst 35 per cent said that these placements were frequently longer term. This means that, although high-cost placements were distributed widely by degree of planning and timescale, they tended strongly to be emergency placements and slightly to be longer-term placements.

Table 6. Thinking about placements costing £10,000 per week or more in 2022/23, how often did these placements fall into the following categories?

Base: all respondents who provided an answer for each category (89 for emergency and up to three months, 95 for emergency and over three months, 84 for planned and up to three months, 89 for planned and over three months, and 15 for Other “please specify”). The rows in bold are based on totals of respective combinations of the initial four rows.

Of the 15 respondents who selected “Other (please specify),” four provided comments to indicate the other sorts of placements they were referring to. In practice, there was some overlap between these types of placements and the main classification described above:

• Disrupted placements.
• Emergency Secure Welfare placements.
• Highly short-term placements (of one to six weeks).
• Unregistered placements (the meaning of this last comment was not clear).

Single highest-cost placements of respondent councils

To accurately estimate the upper outliers among local authorities, respondents were asked to provide the weekly cost of the single highest-cost placement they were paying for at the time of responding to the survey.

Table 7 shows key statistics for the highest-cost placements provided. This shows that the respondent with the lowest maximum placement cost paid over £5,000 per week for this placement, whilst the authority with the highest reported placement cost paid £63,000 per week for this placement.

The average (mean) highest placement cost was over £21,000 per week, whilst the median highest cost was £16,450 per week. The significant difference between these two types of averages is caused by the nature of the mean, which is vulnerable to extreme values and can be disproportionately skewed by very high or very low values. The fact that the mean is substantially higher than the median demonstrates that a minority of councils have maximum placement costs far higher than the majority of councils. Nevertheless, the median, a more accurate depiction of the “typical” local authority, shows that a broad selection of councils are required to fund individual placement costs in excess of £16,000 per week.

The standard deviation of £11,450 demonstrates that on average, councils tended to fall between costs of £9,600 and £32,500 per week for their costliest placements.

Table 7. What is the weekly cost of the single highest-cost placement you are currently paying for?

Base: figures are extrapolated for all English councils based on the number of respondents who answered this question (121 respondents).

Factors driving high placement costs

Respondents were asked to indicate what factors they thought were responsible for driving the exceptionally high costs of some placements. They were able to select all that applied from a range of proposed factors, as well as to provide up to three suggestions of their own.

Table 8 shows the results for this question, demonstrating that the most frequently cited reason for the high cost of certain placements – reported by 98 per cent of respondents – was a lack of choice in placements. The most frequent child-specific reasons reported were children with challenging behaviours and children with complex or significant mental health needs. Other reasons which were less frequent, but which significant percentages of respondents nevertheless reported, were emergency, short-term placements, children with complex or significant physical health needs, children with exceptional needs for protection, and out-of-area placements requiring longer journey times.

Table 8. What factors do you think are instrumental in driving the high weekly costs of certain placements? Please select all that apply.

Base: figures are extrapolated for all English councils based on the number of respondents who answered this question (121 respondents).

Of the 87 respondents who selected “Other (please specify),” 85 provided comments to suggest other factors driving the high cost of placements. The following broad additional drivers of high-cost placements arose from these comments:

• Children on the autistic spectrum, and with other neurodiversities.
• Children who have experienced trauma, especially those exhibiting physical and verbal aggression as a result.
• Children at risk of self-harm or suicide.
• Children with significant therapeutic needs.
• Children with special educational needs (SEN), especially in the context of a lack of residential school places.
• Children requiring deprivation of liberty (DoL) orders.
• Children with criminal behaviours.
• Increasing risks of criminal and sexual exploitation.
• Children requiring placements in specific geographical areas with few available placements.
• Children being discharged from hospital.
• Children requiring 24/7 provision and waking nights.
• More children coming into care as teenagers, rather than at an earlier stage.
• High staffing ratios required for some children (some examples given mentioned two, three or even four staff members per child).
• Children requiring solo placements and/or not being matched successfully with other children, resulting in properties with capacity for multiple children being used to accommodate only one child.
• Over-capacity residential facilities.
• Very limited foster care capacity.
• A lack of Tier 4 (highly specialised and high-need) mental health beds.
• A lack of secure placements and secure welfare units.
• A particular lack of choice and capacity was highlighted within the Greater London region.
• Existing placements being ceased by the providers with very little notice, causing considerable pressure to find alternative arrangements.
• Inflation and increases in the cost of living, including changes to the National Living Wage.
• Demand outweighing supply in local markets, giving providers considerable bargaining power in setting prices.
• Particular difficulties caused by jointly-funded packages with Integrated Care Boards (ICBs).
• Providers becoming increasingly selective in choosing which children they are willing to support, and only accepting the lowest-risk children with the least complex needs.
• Provider teams deskilling, resulting in reduced ability to care for children with complex needs even where they are willing to support these children.
• Nationwide issues in recruiting and retaining social care staff, including in-house and independent provision.
• Use of agency staff by providers to cover acute short-term needs.
• High levels of debt or leverage among the largest private providers.
• The lack of an external market price cap on independent fostering agencies or children’s homes.
• Providers avoiding having certain homes on their purchasing frameworks, enabling them to increase charges.
• Profiteering on the part of provider companies.
• Fear of negative Ofsted judgements leading to excessive charges.

Unaccompanied asylum-seeking children

Respondents were asked to provide numbers supported of, and expenditure on, unaccompanied asylum-seeking children (UASC), and care experienced former UASC, for the financial year 2022/23. As with other questions, the figures provided by respondent councils have been used to estimate overall totals across England. However, due to concerns as to the quality of the financial sums provided, estimates of expenditure in this area across England have not been calculated.

Table 9 shows the results for these questions. This demonstrates that English councils supported an estimated 10,900 UASC and almost 13,000 care experienced former UASC in 2022/23. In terms of averages per council, there were approximately 71 UASC per council on average in 2022/23, whilst the average number of care experienced former UASC per council was 85.

Table 9. Numbers of unaccompanied asylum-seeking children (UASC) and care-experienced UASC.

Further comments

Respondents were invited to share any further comments on the topics covered by the survey. A total of 69 respondents shared further comments, although 30 of those contained clarifications on the scope of the numerical figures provided and did not elucidate any further substantive issues. Further topics shared in the remaining comments can be grouped into the following broad themes:

• An observation that the cost situation has in some cases deteriorated still further in the 2023/24 financial year, after the figures provided for 2022/23. For example, one respondent mentioned having more than a dozen placements where the average cost rate was £10,000 per week, and two of which cost in excess of £20,000 per week.
• Respondents expressed their continuing willingness and commitment to supporting UASC, despite the difficulties of doing so.
• Respondents reported a significant increase in the number of UASC.
• It was noted that former UASC care leavers experience a range of extra needs and complexities which are not typical of other care leavers, and that these needs required dedicated and detailed support.
• Respondents reported that most UASC tend to be in their late teens (one respondent reported typical ages of around 16 to 17). This means that in a good deal of cases, they turn 18 before a final asylum decision is made, creating difficulties for their eligibility as children in need.
• Respondents reported very limited post-18 accommodation options for care leavers, particularly UASC.
• Respondents noted that Home Office funding for UASC has not increased in line with inflation in the last three years, and is not covering the cost of placements by a considerable margin.
• One respondent noted that directly commissioned specialist UASC provision has helped them reduce placement costs in their local area.
• Another respondent reported being able to negotiate significant savings by scrutinising the costs presented by their providers and asking for detailed breakdowns and justifications of these costs. However, they noted that the lack of market competition sometimes still forced them to retain providers who failed to adequately justify their costs in this manner.
• Some respondents observed a generally increasing complexity of the needs presented by children in care.
• Multiple respondents remarked on a severe shortage of foster carers, leading to reliance on more expensive care solutions, including housing children in residential facilities even where this was not the preferred solution.
• Respondents noted high costs arising from failing to identify suitable homes for children, even after months of planning.
• Respondents observed that providers often stopped supporting some children at very little provocation, in order to avoid the difficulties of caring for those children and to avoid negative impacts on Ofsted ratings.
• Some respondents reported very often only having one viable care offer for a particular child, underscoring the lack of competition in the market.
• Respondents noted that there are significant difficulties for new providers entering the sector, exacerbating the lack of competition and preventing improvements to it.
• Respondents remarked that costs are disproportionately under the influence of a relatively small section of the provider market, due to its excessive bargaining power relative to councils and smaller providers.
• Some respondents observed costs continuing to rise despite numbers of placements actually falling in some areas, due to inflationary pressures and all the other factors summarised in this report.
• Some respondents requested for central government to establish a price cap for children’s social care placements, to avoid the instance of extremely high costs in cases where these currently arise.
• Respondents generally expressed that the cost of placements is unsustainable, and that many local authorities will be unable to cope with such costs if they persist in the long- or medium-term.