‘Triple whammy’ hitting children’s services hard and adding to Sheffield Council’s financial crisis

The council is facing a budget overspend of £34.3 million in the current financial year. The rising costs of and demand for children’s and adult health and social care and homelessness services are all contributing significantly to that total.

Council chief financial officer Philip Gregory gave an update to a meeting this week (September 3) of the education, children and families policy committee. The committee faces a £14.1m budget overspend, which is due mainly to increased demand for children’s social care services and home-to-school transport.

Mr Gregory said: “The demand for our services, including those that help some of our most vulnerable citizens, has increased.”

He said that increased demand, years of underfunding by central government plus the cost-of-living crisis have resulted in a “triple whammy” that has created the council’s budget deficit.

Mr Gregory added that council officers are working hard to look at different ways to deliver services and achieve savings. He said that £40m out of a forecast £48m in council-wide savings could be achieved.

Serious

Coun Mohammed Mahroof commented that the cumulative effect of underfunding means the situation will only get worse in future.

He added: “There are human stories to every penny that we don’t spend. There are going to have to be some very serious decisions beyond this. Are there going to be services we’re just not able to provide?”

Coun Mahroof said there had already been a delegation of foster carers saying they don’t get enough money from the council.

He also asked if the council was likely to have to declare effective bankruptcy, as other local authorities have done.

Mr Gregory replied that councils are unlikely to receive any extra government funding, although the government is expected to announce multi-year funding that will allow for better planning of resources.

Councils can now apply to the government for exceptional financial support, including permission for extra borrowing, in order to avoid going bankrupt, he said.

Sustainability

The council has enough reserves to cope this year but this will leave little room for manoeuvre in future years.

Mr Gregory said that part of financial sustainability work is addressing how the size and shape of the council may need to change. That will include which services might be “deprioritised”.

In response to a question from Coun Nighat Basharat, Mr Gregory said that the committee’s overspending has been caused by the high cost of placements for children in care and the rising demand for home-to-school transport.

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Meredith Teasdale, strategic director of children’s services, said: “The key areas are around making sure we improve outcomes for children that require intervention.

“The best outcome is a child with their loving families in a loving home. Steps away from that mean less good outcomes but also paying more.”

She said that council services are focusing on earlier intervention and preventative work to avoid children having to be taken into care.

“We already have a low number of children in care in comparison to other authorities, in fact considerably less, so costs are less.”

Quality

Ms Teasdale said that the council is also focusing more on kinship care, where children who can’t live with their parents are placed with other family members, in order that they do remain with their families. The committee later discussed changes to payments for kinship carers to bring everyone up to a minimum level and end inconsistencies.

Maintenance allowances, based on the national basic fostering rate, will range from £170 a week for children aged up to four to £249 for young people aged 16 and 17.

Ms Teasdale said that there has been an increase in children going into foster care and work to improve the quality and number of council children’s homes.

She added: “They provide a good quality of care for our children and are more cost-effective than some of the residential placements outside.”

She pointed to work on improving home-to-school transport, which was discussed later in the agenda. The council is increasing the amount of training it runs to enable children and young people with additional needs to travel more independently, as well as trialling individual transport budgets to allow families more freedom of choice.

It is also looking at how to reduce the number of high-cost trips, particularly lone taxi journeys.

Ms Teasdale said: “All of it is really difficult, tough stuff that will take a period of time to do.” She said better outcomes for children and young people remain the key priority.

Coun Toby Mallinson commented that, without government restoration of council funding, “we’re going to be in a difficult position year after year”.