Transforming children’s services inquiry

The Department cannot explain why there is so much variation between local authorities in the activity and cost of children’s social care. As we have reported previously, there is significant variation between different local authorities in both the activity and cost of their children’s social care. The rate of children in need episodes during 2017–18 ranged from 301 to 1,323 per 10,000 children between local authorities. The amount spent by local authorities per child in need episode ranged between £566 to £5,166, similar to when we looked at this in 2016. Deprivation only explains 15% of the variation and the characteristics of the local authority and its area are the biggest explanatory factor for the variation in activity. The Department acknowledges that it does not yet fully understand variation between local authorities, and that gaining this understanding has not previously been a priority for it. The Department has now commissioned research to understand both pressures on and variations between local authorities. The Department says that local authorities it considers stronger are bringing fewer children into the care system. The Department has not set out the level of variation between local authorities that it considers to be acceptable. Recommendation: The Department should set out by December 2019: • data on the costs and quality of children’s social care for each local authority in England, which is easily accessible publicly and enables comparison between authorities; • the key factors contributing to the variation across local authorities; • the action it is taking to reduce variation; and • its future targets for limiting the levels of variation between local authorities in cost and quality of children’s social care. Recommendation: The Department should also set out by December 2019 the thresholds it deems acceptable for (i) rate of children in need episodes, and (ii) amount spent per child in need episode.

The Department does not possess a comprehensive assessment of the sustainability or resource needs of children’s social care services. The sector is becoming increasingly unsustainable financially, with 91% of local authorities exceeding their budgets for spending on children’s services in 2017–18 and an overall overspend of £872 million in 2017–18. Unless the Department gets to grips with its understanding of demand pressures it will struggle to make a compelling case for adequate resources in the anticipated spending review. To understand the resources required the Department has commissioned research to understand both pressures on and variations between local authorities. At present, there is no link between spending and quality of services, as assessed by Ofsted. Indeed, Ofsted unlike the Care Quality Commission for hospitals, does not consider the cost-effectiveness of local authority provision. In addition, while local authorities share good practice 6 Transforming children’s services through programmes established by the Department, it is not yet apparent whether this is effectively spreading high-quality and well-evidenced children’s social care practice. Recommendation: By September 2019, the Department should decide how it will assess and monitor the cost effectiveness of children’s social care in inspected local authorities. Based on what it decides, the Department should commit to regular reporting on cost effectiveness, incorporating ratings on how well authorities use resources. Recommendation: By September 2019, the Department should also set out what action it has taken to encourage the take-up of good practice in children’s social care across local authorities and how it will assess take-up. This should include progress updates on the work of its What Works Centre for children’s social care and its Partners in Practice Programme. It should include specific examples of how this work has benefited vulnerable families and children.

The increasing use, and high cost, of residential care places local authorities under extreme financial pressure. There is a lack of residential capacity for children’s social care and its use is often unplanned, leading to ‘bidding wars’ between local authorities for places for children. Although the number of children placed in residential care by local authorities increased by 9.2% between 2013–14 and 2017–18, the cost of residential care increased by 22.5% over the same period, from £1.02 billion to £1.25 billion in real terms. The Department is working with local authorities to commission cost-effective residential care but demand is clearly outstripping supply. Recommendation: The Department should set out by December 2019 how it will work with local authorities to manage the supply of high quality and cost-effective residential care and match this to demand.

There is a lack of evidence on the effectiveness of early interventions in children’s social care. There is a strongly-held belief in the value of early intervention in addressing the needs of vulnerable children, and preventing these children from becoming even more at risk of harm. Despite this, the Department and local authorities are still only at the beginning of understanding what families need and the evidence of how best to meet that need. Those early intervention services which have been commissioned by local authorities in recent years have supported families with relatively fewer problems but have not been effective for high-risk children and families. A number of local authorities have done work on the pre- proceedings process with parents, however there is significant variation between authorities. Local authorities which have closed children’s centres have not seen any consequential increases in child protection plans. The Department has now launched a What Works Centre, which is designed to be a national institution holding intelligence about all good practice in children’s social care, including early intervention. Recommendation: To reduce variation across local authorities in pre-proceedings support, we concur with the recommendation of The Family Rights Group in their Transforming children’s services 7 2018 Care Crisis Review that the Department should set up a working group - with representation from legal and social work practitioners and families - to improve and standardise existing pre-proceedings guidance. Recommendation: The Department should set out by September 2019 how the What Works Centre will identify cost-effective early interventions and how it will spread this knowledge through its programme of good practice.

The Department has not set out what overall improvement it is seeking in children’s social care by 2022. In 2016, the Department committed to deliver a programme of reform in children’s social care by 2020. The delivery date for this programme, however, subsequently slipped to 2022. The Department has also made slow progress in improving the quality of children’s social care: While there is some recent evidence of improvement, 58% of local authorities are still assessed as below Good by Ofsted, a state of affairs the Department acknowledges is “terrible.” The Department was not able to set out for the Committee either the overall level of quality it is seeking to achieve in children’s social care, or how it will measure this. Recommendation: The Department should write to us setting out the quality of children’s social care it is seeking to achieve by 2022 and how it will measure this. It should specify a percentage target for how many authorities it is aiming to be rated as “Good” or “Outstanding” by 2022. It should do this in a fuller letter accompanying the Treasury Minute response to our report.

There is little evidence of strong cross-government collaboration in improving children’s social care. While there is evidence of cross-Departmental co-operation ahead of the spending review, the Department has sole policy responsibility for children’s social care. The complex needs of vulnerable children mean that, in a local setting, they often require services provided by a number of agencies, including local authorities, courts, the police, the Department for Work & Pensions and the health service. There is a particular problem in how local authorities and courts work together when both have different interpretations of risk. Ofsted also focuses primarily on safety but not on risk management or value for money. Senior officials across government have recently met to address the risk of cost-shunting in the expected spending review. Recommendation: The Department should develop and lead on a cross- government strategy for raising quality in children’s social care, with a cross- government approach agreed by December 2019. 8 Transforming children’s services 1 Pressures on children’s social care

To further its understanding of children’s social care demand pressures, in late 2017 the Department, together with the Ministry of Housing, Communities & Local Government and HM Treasury, commissioned research to understand both pressures on and variations between local authorities. This work is due to be completed by summer

The NAO’s analysis identified explanations for 75% of variations between local authorities, with by far the greatest cause of variation the characteristics of local authorities themselves and their areas. The NAO estimated that these local characteristics account for 44% of the variation, and include custom and practice in children’s social care, local market conditions and characteristics of children and their families. The Department noted that its further work with LG Futures should allow greater understanding of the factors behind variation.11

Some local authorities have managed to reduce their rates of intervention for care and care proceedings. The Chief Social Worker suggested that the reduction of the rates of intervention depends on the risk appetite of local authorities and the risk appetite depended on the calibre of the workforce, confidence of the workforce, where the local authority is in the inspection cycle and general culture of the organisation and leadership of children’s social care.12 The sustainability and resource needs of children’s social care services

The Department was clear that it regards the financial position of local authority children’s social care services as unsustainable.13 The proportion of local authorities that overspend on children’s social care increased from 63% in 2010–11 to 91% in 2017–18. In 2017–18, the total national overspend on children’s social care was £872 million.14 As a 8 Qq 57–58 9 Q 76 10 Qq 53, 86 11 Qq 58–59; C&AG’s Report, para 16 12 Qq 72, 77 13 Q 124 14 C&AG’s Report, para 15 10 Transforming children’s services result of this overspending on children’s social care, some councils are drawing on their reserves, and drawing funding from other services – the Department commented: “You cannot carry on like that forever”.15

The Department has only recently become more interested in value for money and sustainability of the sector.16 As we have previously reported, there is no relationship between spending on child in need and quality, as measured by Ofsted ratings.17 Indeed, Ofsted does not currently measure the value for money of local authority children’s social care services when it inspects them.18 This contrasts with the Care Quality Commission, for example, which publishes reports which include ratings on how well health bodies use their resources.19 The Department recognised that the financial situation that councils find themselves in needs to be addressed in the forthcoming spending review.20

The Department’s What Works Centre for children’s social care was recently established and is designed to act as an evidence base for how to best work with families. Similarly, the Department is seeking to encourage local authorities to share good practice in children’s social care with its Partners in Practice programme. However, the Department acknowledged that it is only at the beginning of understanding the evidence base for how to most effectively work with families and vulnerable children.21

As noted above, the analysis which the Department commissioned in 2017 in partnership with other government departments is designed to enable it to be ready for a bid for children’s social care funding in the next spending review. The Department stated that this analysis will be necessary to help it bid for the resources that will be necessary for local authorities to cope with forecast increased demand for children’s social care.22 Residential care capacity

There has been an increase in the number of children in care who need to be placed in residential homes. Notably, the number of children over 16 taken into care increased by 78% between 2010–11 and 2017–18, from 3,210 to 5,710. According to local authorities, these children often have more complex needs and as a result are harder to place into foster care and are more likely to go into residential care, which is more costly.23

We heard from the directors of children’s services of Oxfordshire and Northumberland local authorities that there is not enough capacity in the residential market to meet demand for children with very complex needs.24 Only 32% of local authorities report that they have access to enough residential homes for children aged 14 to 15 years, and 41% for those aged 16 to 17.25 Reflecting this lack of capacity, in 2016 an independent review found that an absence of successful commissioning was resulting in different local authorities 15 Q 124 16 C&AG’s Report, para 1.4, 17 Committee of Public Accounts, Child Protection, Session 2016–17, HC 713, 16 December 2016, para 4 18 Qq 99–102 19 See: Care Quality Commission 20 Q 82 21 Q 94 22 Q 86 23 C&AG’s Report, para 9 24 Q 1 25 Natcen Social Research, Children’s Services Omnibus, Wave 3 Research Report, commissioned by Department for Education, May 2016 Transforming children’s services 11 paying widely different prices for the same standard of residential care.26 The scarcity of places means that different local authorities have to fight a “bidding war” against one another for the same placements, with prices increasing as a result.27 This can have extreme financial consequences in individual cases where there is an urgent need to find a placement for a child: Oxfordshire County Council, for example, spent £21,000 housing one child over Christmas 2018. In Northumberland, the cost of placements beyond the county’s boundaries has increased by 116% over the past 3 years.28

Limited residential care home capacity has contributed to a significant national increase in the cost of children in care. Although the number of children placed in residential care by local authorities increased by 9.2% between 2013–14 and 2017–18, the cost of residential care increased by 22.5% over the same period, from £1.02 billion to £1.25 billion in real terms.29

The Department informed us that it is conducting work to more fully understand local authority commissioning in areas such as fostering and residential care: it was advised on this by Sir Martin Narey, and it is implementing his recommendations. However, the Department also acknowledged that this was an area in which it could potentially take faster action.30 The Department told us that the most cost-effective commissioning is done when councils collaborate with each other; it is helping and funding three local authorities to drive up the quality of their commissioning.31 Evidence on the effectiveness of early interventions

We heard that early help or intervention can be of great value to vulnerable children, as well as to local authorities in providing them with more options than simply placing children in care. The Family Rights Group told us that in some local authorities, for example, significant work is done with parents before they enter formal court proceedings to assess whether it is possible to place children in wider kinship settings.32 However, they noted that there is significant variation between authorities: some areas focus on supporting parents to keep the child safe and avoid proceedings being taken, whereas others use the period primarily for gathering evidence to support the local authority’s case in court.33

The Department accepted that the “industry” of early intervention has not always led to the commissioning of the right sorts of services and with the right sort of skill level. The Chief Social Worker stated that the early intervention programmes traditionally commissioned by local authorities do not have much of a chance of ever stopping the trajectory of children from families with entrenched difficulties, often across generations, into the high-risk part of the system.34 26 Sir Martin Narey, Residential care in England, Report of Sir Martin Narey’s independent review of children’s residential care, July 2016 27 Q 4 28 Qq 1, 3 29 C&AG’s Report, para 1.27 30 Q 102 31 Q 104 32 Q 38 33 Family Rights Group (CSR008) 34 Q 114 12 Transforming children’s services

The NAO’s analysis showed that local authorities which have closed children’s centres have not had any consequential increases in child protection plans. Indeed, for those local authorities which had closed centres there was a slight fall in the number of child protection plans in future years. Local authorities have reduced spending on preventative children’s services.35

To expand the evidence base for what works in all aspects of children’s social care, the Department has launched the What Works Centre. This is designed to be a national institution holding intelligence on all good practice in children’s social care, including early intervention. The Department is only beginning to understand this evidence base through the What Works Centre, as it has not previously made a concerted, continual effort to understand what families need.36 35 C&AG’s Report, paras 17, 3.21 36 Q 94 Transforming children’s services 13 2 Departmental oversight The Department’s 2022 goal

In 2016, in Putting Children First, the Department committed to deliver a programme of reform in children’s social care. The policy goal was originally stated as that: “By 2020 our ambition is that all vulnerable children, no matter where they live, receive the same high quality of care and support, and the best outcome for every child is at the heart of every decision made.” However, the Department has subsequently put back the delivery date for this programme to 2022. The Department told us that it took the decision to defer the target date because, following the Committee’s report in 2016, it acknowledged that it did not have a detailed plan and trajectory in place.37

Similarly, the Department has made only limited progress in improving the quality of children’s social care services. In 2013, Ofsted assessed 65% of local authority children’s services as either “Inadequate” or “Requires improvement to be good.” In 2018, this figure fell only marginally, with 58% of local authorities rated as “Inadequate” or “Requires improvement to be good”. The Department accepted that having nearly 60% of local authorities rated lower than “Good” by Ofsted for children’s social care is “terrible”. It did, however, point out that the number of local authorities rated as “Inadequate” had fallen from 30 to 19.38

The Department said that it is now confident that it has put the actions in place that mean it will achieve its target by 2022. Despite this, the Department was not able to set out either the overall level of quality it is seeking to achieve in children’s social care, or how it will measure this. The Department would not, for example, commit to how many local authorities it would be comfortable with failing their Ofsted inspections for children’s social services by 2022.39 Cross-government collaboration

The complex needs of vulnerable children mean that, at a local level, a number of different agencies are often involved in their care. We heard from our witnesses that these can include the police, housing, courts, the Department for Work & Pensions and local health services. These agencies can work together effectively or can also be at odds with one another – often this is dependent on the level of risk that different agencies feel comfortable taking on with relation to vulnerable children.40 Changes in risk appetite between local authorities and courts are exemplified in the large rise in the number of care order applications, with a rise of 56% from 2010–11 to 2017–18.41

At the national level, there is some evidence of cross-Departmental co-operation ahead of the spending review. The Department told us how it has commissioned, with MHCLG and HM Treasury, analysis on what drives demand pressures for children’s social care. MHCLG is involved as it oversees the Government’s overall relationship with local government. HM Treasury is involved as the Department considers there is 37 Q 122 38 Q 104, Q119; C&AG’s Report, para 2.17 39 Q 122 40 Qq 9, 10, 19, 38 41 Q 107; C&AG’s Report, Figure 5 14 Transforming children’s services no point in doing work to support the expected spending review that Treasury does not know about.42 Another example of co-operation has been in cross-governmental work to counter the risk of cost-shunting.43 There are also conversations with local authority chief executives, the Ministry of Justice and the Department of Health and Social Care to understand pressures, such as those on courts which prompted the Care Crisis Review. One witness also told us of ‘huge variation’ in the co-operation from partner agencies in relation to local collaboration. We also heard about the welfare reforms, led by the Department of Work & Pensions, where the impact on demand for children’s social care is not well understood. Yet, despite the inherently cross-governmental nature of children’s social care, the Department has sole departmental policy responsibility for children’s social care.44 42 Q 86 43 Q 68 44 Qq 6, 26, 45, 52 Transforming children’s services 15