Extra £3.9 million needed to provide for Peterborough's most vulnerable children

Mr Lou Williams, Service Director, Children & Safeguarding at Peterborough City Council, reporting to the Cabinet at their meeting on Monday, July 23, told Cllrs: “This request for a supplementary budget of up to £3.9m this year will need to be included in future year’s requirements also, as part of our 2019/2020 Medium Term Financial Strategy process. I am submitting this to Cabinet today along with my report highlighting the increased numbers of children and young person’s in care in Peterborough which, while remaining below the average of similar authorities, is resulting in significant budget pressures”.

In April 2017, Peterborough City Council undertook a ten-year programme to deliver a range of services including fostering, adoption and various functions associated with the assessment and support of permanent carers providing care to children under ‘Special Guardianship’ orders. The contract for this provision was awarded to the leading charity, TACT, and a number of members of staff were TUPE transferred from existing providers to TACT.

The Adolescent and Children’s Trust (TACT) is the UK’s largest fostering and adoption charity and voluntary agency. Established 24 years ago, TACT currently has over 500 foster carers providing homes for over 600 children and young people. As a charity, everything TACT does is for the benefit of children in care and on the fringes of care, and they work ‘beyond profit’, which means that all surplus income is invested back into their services to ensure TACT carers and the children in their care receive the best possible support. TACT also regularly campaign on behalf of vulnerable children, seeking to influence public policy and argue for positive changes.

As part of the new arrangements, the appropriate budgets to transfer to TACT were calculated using the 2015/2016 end of year position as the baseline budget; and, the budget for placement costs came in on line during the current financial year. However, in financial year 2016/2017, there was a very significant increase both nationally and locally (in Cambridgeshire) in the numbers of persons in care, and unfortunately that increase has had a number of significant impacts upon the local position from then onwards:

The availability of Independent Fostering Agency Placements dried up, which resulted in some pricing increases; As fostering placements became more difficult to source, more of our children and young people were placed in residential placements; Residential placements are very high cost – ranging from around £3,000 to over £6,000 per week, with a current average of around £180,000 per annum per child or young person; Overall numbers of children in care also increased in Peterborough over 2016/2017, ending the year with 361; Because in-house provision has capacity for only 160-170 children and young people at any given time, every additional child coming into care will at best be placed with an agency foster carer at £900 per week.

“The current position in 2017/2018 is not much better”, explained Cllr Sam Smith, Cabinet Member for Children’s Services. “In Peterborough this year overall numbers of children and young people requiring placements reached 385 at one point, and averaged over 370 for most of the year. TACT made some very significant qualitative improvements to the service overall during the year, and People & Communities managed the budget deficit for 2017/2018, supported by very significant investment from TACT of around £1m towards placements costs and another £500k of their own funds into the service overall. Clearly, however, it is not the role of TACT to contribute to placements costs that would otherwise be the responsibility of the local authority; the original idea behind the concept of the Permanency Service was that a partner agency with fostering and adoption expertise would make a better job of recruiting and supporting foster carers, than that of the local authority. Children would benefit by having more local foster families, and the Council and the partner would benefit by virtue of each having a share of the savings generated. TACT expected to invest in a service delivery – but not to the extent that they have done in 2017/2018”.

Cllr Smith continued: “Ofsted undertook a two-week full inspection of children’s services at Peterborough City Council that ended on Friday, 6 July 2018. While the outcome of that inspection will not be published until 6 August 2018, it can be said that inspectors were very positive about our services to children and young people in care in general, and the quality of provision by TACT in particular. That said, the projected placement budget overspend for placements for children in care for the current financial year is £3.9m. Working closely with TACT, we will obviously do all we can to mitigate this amount, but, given the benchmarking data, it would be high risk to assume we can either significantly reduce numbers in care, or radically change placement mix in terms of numbers in residential placements”.

The simple facts are, it seems, that Peterborough City Council and TACT have underestimated by some considerable amount the numbers of places required for children or young persons who need placement places in the city. Certainly the figures shown to the Cabinet on Monday would seem to demonstrate that the shortfall, if not rectified, will continue rather than abate, and that sums in the region of £3.9m may well be needed to be added to the Medium Term Financial Strategy for Children & Safeguarding in the year 2019/2020 and 2020/2021. Assuming TACT were able to achieve their recruitment targets for 2018/2019, the 2019/2020 budget should benefit from a full year of reduced costs. However, even 28 more in-house foster placements and 28 fewer Independent Fostering Agency placements, would only reduce the expenditure by £730,000 per annum. The stark facts are that for the foreseeable future at least, there will be a continuing budget deficit of some £2.7m per annum at 2020/2021.

“There are clear financial implications arising from the increased demand for placements for children in care, given that numbers have increased so dramatically in such a short time”, Cllr Smith continued. “The principle behind the Permanency Service remains unaltered, and continues to be based on the improved recruitment of local foster carers, able to meet the needs of a broader population of children and young people in care. That said, there is an irrefutable requirement for a supplemental budget of up to £3.9m in 2018/2019 to ensure the delivery service this financial year”.

Cabinet members agreed in principle to the recommendation, approving the supplementary budget of £3.9m for 2018/2019.