Children and Young People: Local Authority Care

Lord Wood of Anfield Excerpts

Thursday 18th April 2024 Lords Chamber

[Lord Wood of Anfield (Lab)]

My Lords, I also thank the noble Lord, Lord Laming, for this timely debate—to use the cliché, The sad truth about our children’s care system is that it is always timely because the crisis just keeps going and getting worse.

The basic statistics, some of which the noble Lord, Lord Laming, referred to earlier, make very grim reading. Some 84,000 children are now in care—up 20% in a decade. Also, in the last decade there has been a tripling of the percentage of over-16-year-olds in care and a tripling of unaccompanied asylum-seeking children. The system is under increased pressure, particularly since the financial crisis, and these pressures are worsening month by month. The LGA has estimated a shortfall of £4 billion in our local government care system. As the noble Lord, Lord Laming, pointed out, there has been a shift in spend away from early intervention, which has reduced by nearly 50% since 2010, towards late intervention, which has increased by nearly 50% in the same period. The result is a big shortage in local authority-funded placements. Sixteen secure homes have shut since 2002.

The real crisis, though, comes from how local authorities—purely through constraint and pressure—have been forced to respond in different ways. First, there has been a huge increase in private sector residential care, which is now 85% of all homes. Why is this important? It is important because this is when local authorities lose control of the type, location and cost of provision. It is when private equity involvement increases, often with up to 20% margins for the largest companies. This sometimes leads to dangerously high levels of debt, the risk of which is borne ultimately by the local authorities and the very children whom they are supposed to be protecting.

Secondly, hundreds of vulnerable children are now being sent to unregulated homes because of a chronic shortage of places. There has been a 277% rise in the number of children placed in unregulated children’s homes since the pandemic. Just think of that; the most vulnerable children of all are in illegal placements.

Thirdly, there has been a tripling of children living in supported accommodation without any care at all. NGOs such as the Family Rights Group worry that the Government’s new regulatory approach will unintentionally confirm this as the new status quo. There is also the greater use of placements that involve distance and separation from family. Over one-third of children in the system are separated from their siblings. The average distance from family is now 18 miles, and over 20% of children live over 20 miles from their families.

We also have the inadequate use of kinship care, although I applaud the Government and officials for taking steps towards rectifying this in recent months and years. Groups such as Become and Kinship, as many noble Lords will know, have championed this issue ferociously. At the moment, however, only 15% of all children in care are in kinship care. The care system has not traditionally explored these options early enough, nor offered enough help to those family and friends who might provide that kind of care.

On top of this, there are labour shortage issues, with a 20% vacancy rate in social worker posts, a very high turnover in children’s homes and a declining number of fostering households.

It is a bleak picture, but we should acknowledge, as the noble Lord, Lord Laming has said, that the Government have taken some steps forward. Commissioning the MacAlister review was one, along with the development of local family hubs and the provision of more funding. Michael Gove and the Chancellor recently made some announcements on the children’s care estate. Of the percentage of funding that MacAlister envisages, something like 10% to 12% has been put in place so far.

Some of the things Government should do are not really about extra funding, although they will involve some extra funding. Take kinship care as an example. The organisation Kinship estimates that, for every 1,000 children looked after in well-supported kinship care rather than local authority care, the state saves £40 million and increases their lifetime earnings by £20 million. We also need stronger enforcement of the existing obligation for local authorities to have a kinship care policy. More than one-third do not have one, even though they are required to. We need more proactive strategic planning involving families—a shift to state support rather than simply increasing child protection inquiries, over 70% of which do not result in further action. We also need much better regulation of children’s homes to stop the debt problem and the leakage into the unregulated sector.

We need considerably more money, and I have a small suggestion of a down payment. Some £600 million per year comes from the carried interest loophole in the private equity sector. Many of the companies within that run these children’s homes. That would be a very small down payment to an increase in funding for this much-neglected sector.

This House and the other House have to make sure that we keep this as a priority. It is a sector that does not have the strong voices, sharp elbows or the champions that other children’s and health issues have. It gives us more responsibility to keep that voice strong.