Care system needs ‘fundamental redesign’ as annual cost estimated at £66k per child

Around £6.8 billion was spent on placing children in care in 2018-2019, a new study has found.

With 103,000 children in care during this period, the average cost of supporting children works out to around £66,000 each year.

The report by adoption and fostering charity Home for Good, working with audit firm PricewaterhouseCoopers (PwC), found that most of the cost is attributed to the housing, fostering and adopting services, and the associated legal services.

The report noted that a further £2 billion was spent on 204,000 care leavers and care-experienced adults aged 18-64 dealing with issues stemming from the care system – including prison and probation, and homelessness.

Just under a third of children become homeless within two years of leaving the care system, while a similar proportion have at least one parent who was in care themselves.

Speaking to the Financial Times, Rob Banham, partner at PwC and one of the report’s authors, said the system needed a “fundamental redesign, both top-down and bottom-up”.

In 2018-19, nearly 6,000 children and young people experienced unplanned endings to their foster placement, the report found, roughly 11% of the total number of foster placements.

While harder to account for, the report estimated that in 2016-2017 there were around 150 placement breakdowns before an adoption was finalised, and a further 132 breakdowns after the adoption order.

A number of inquiries and reviews are currently ongoing looking at the issues leading to the soaring costs. In January, the Department for Education (DfE) announced a wide-ranging review of the care system, headed up by Josh MacAlister, the former Chief Executive of social worker training organisation Frontline, which itself receives funding from the Department for Education.

The All-Party Parliamentary Group (APPG) for Looked After Children and Care Leavers also launched its own Spotlight Inquiry, which aims to shine a light on the care system and hopes to support the DfE review in “a constructive way”.

Running parallel to this is a Competitions and Market Authority study of children’s social care provision, launched after calls from Josh MacAlister, to establish why a lack of availability and increasing costs could be leading to the needs of children in care not being met.

Children’s homes can be provided directly by local authorities, by the private sector or by charities – however 70% of children in care are placed in private sector, with the figure in Wales rising to 78%.

According to data from the National Centre for Excellence in Residential Childcare, costs charged to local authorities for independent provision of children’s homes have soared by 40% from £2841 per week on average in 2013, to £3970 per week on average in 2019.

“We are concerned that some children are not getting access to the right placements due to a lack of availability in the system, and that rising prices are putting further pressure on stretched local authority budgets,” Andrea Coscelli, Chief Executive of the CMA said in March this year, launching the watchdog’s study.