Children’s care costs drive £2.4m budget gap, council says
Rotherham Council is predicting a £2.4m overspend this year, driven mainly by the rising cost of caring for vulnerable children and adults.
A financial monitoring report for July shows that while frontline services are forecasting an extra £7.7m in costs, this is being partly offset by £5.3m of savings in central budgets, including contingency funds set aside for social care and money saved through the council’s borrowing strategy.
The single biggest pressure comes from Children and Young People’s Services, which is £5.6m over budget. That increase is largely due to the cost of residential placements for looked-after children, with 10 unexpected placements added over the summer. These types of placements are among the most expensive and costs in the market have risen sharply.
The number of children in care has remained steady at around 457, but the complexity of cases and higher placement fees are making it difficult to keep costs down. The council is also facing challenges in recruiting foster carers, meaning more children have to be placed in external, and more costly, settings.
Adult social care is also feeling the strain, with a £2m overspend linked to a growing demand for residential and nursing care for older people and those with mental health needs.
On top of this, a nationally agreed 3.2 per cent local government pay rise is costing the council £2.3m more than expected when this year’s budget was set.
Despite these pressures, finance bosses say the council is still in a strong position overall. Central savings are expected to cover a large part of the shortfall. If needed, reserves could be used to balance the books at the end of the financial year.
The report also highlights progress on capital projects, including the completion of new children’s homes, a water play facility at Clifton Park, and improvements to schools, transport, and town centre regeneration. The total capital programme for the year stands at just over £209m, with some schemes re-profiled into future years.
The council insists it will keep a tight grip on spending and is confident it can return to a balanced position before the year ends.
Why children’s care costs so much
One of the biggest pressures on council budgets is the rising cost of children’s placements. A residential place now costs councils an average of more than £6,000 a week, compared with around £647 for foster care.
Nationally, around 84 per cent of children’s homes are now privately run, meaning councils have to pay market rates, which have risen faster than inflation. Fewer foster carers are also available, pushing more children into residential care.
The result is a system that offers higher standards and more specialist support than in the past, but at a much higher cost to local authorities.
Rotherham Council’s Strategic Director Children and Young People Services Nicola Curley said: “Increasing costs of children’s residential provision isn’t just being felt in Rotherham, it is a national issue.
“We have seen a rise in the number of children and young people with complex needs, meaning that some placements require additional staffing, which in turn increases the cost of placements. Additionally, challenges in foster care recruitment has put extra pressures on demand for residential care, again, this isn’t unique to Rotherham, it’s happening up and down the country.
“Despite the challenges, as a council we are committed to making sure every child in Rotherham is able to fulfil their potential. As such, we have made significant financial investment to increase the capacity of council-owned residential homes.
“A substantial capital investment programme with additional support from government has enabled us to purchase and build high quality homes as well as increasing staffing numbers and bolster vital training within the service.
“In addition, we have implemented a number of plans to mitigate the rising costs including regularly reviewing high-cost placements and supporting families to allow children to return home with support of trained practitioners, ensuring we provide tailored and dedicated support children and young people in their communities.”