A gap that will keep on growing

Posted by Dan Breslin / Tuesday 26 February 2019 / Early intervention Government spending

Local authority spending cuts have been all over the news in recent months. There have been high profile stories of councils struggling to balance budgets and a report by the spending watchdog the National Audit Office detailing the concerning scale of spending reductions.


But the other part of the story is the scale of funding cuts local authorities across the country have faced. Since 2010, local authority funding from central government has fallen by almost half (49%). This has left councils facing tough choices.


This is a problem that is being just as keenly felt by children and young people’s services as other areas for which councils are responsible. New analysis by Action for Children in partnership with Barnardo’s, NSPCC, The Children’s Society and The National Children’s Bureau has found that funding for these services has fallen sharply since the turn of the decade. This has created an impossible situation for local authorities to try and protect spending as funding has disappeared.

Children and young people services funding gap

An ever-increasing funding gap

Our analysis has found funding for children and young people’s services has fallen by almost a third (29%) since 2010/11 – down from £10.3bn to £7.3bn. This reduction means that funding per child has fallen from £813 to £533 in the last eight years.


At the same time, local authority spending on children and young people’s services fell by 16% - from £10.3bn to £8.6bn. This reflects the efforts made by local authorities across the country to protect frontline services communities rely on – even as funding has fallen. But, despite this work, the funding gap grew to £1.4bn in 2017/18 – and is getting bigger.

Local authorities might take different approaches to make up funding shortfalls year-on-year, from drawing on their reserves to reallocating funding from other spending areas. Yet, neither are sustainable. Reserves are finite and not designed to cover year-on-year spending whilst reallocation will simply create shortfalls in other service areas communities rely on. Without additional funding from central government the LGA estimates this funding gap will reach £3bn by 2025.


Less spent on early intervention, more spent on crisis support

As councils face dwindling budgets they are having to allocate an ever-greater amount of their budgets for late intervention services, such as safeguarding and child protection. Local authority spending on late intervention services, such as child protection and safeguarding, has risen 12% from £5.9 billion in 2010/11 to £6.6 billion in 2017/18.


A large part of this is because local authorities have a legal requirement to provide support for children and young people who reach a certain threshold of need. However, as funding falls it means savings have to be found elsewhere. Worryingly, it is early intervention services for children and young people, such as children’s centres, which have borne the brunt of spending cuts.


Local authority spending on early intervention has fallen from £3.7 billion to £1.9 billion between 2010/11 and 2017/18 – a 49% reduction. This is a driving factor in why over a 1,000 children’s centres are estimated to have closed since 2009.


We know that many councillors think early help can make the difference in demand on statutory services. But the funding crisis is making it impossible for them to properly resource services that can help reduce the spiralling cost of late intervention.


It is up to the Government to act

The current situation is unsustainable and in need of urgent action. Later this year, the Government will announce how much funding is to be made available in future years to local authorities for local services as part of the Spending Review.


This is a vital opportunity to address the funding crisis facing children and young people’s services. Without much needed additional investment, there is a very real risk local authorities will be unable to meet the needs of children in their communities.