Councils across the country are “running out of road”, with one in 10 fearing effective bankruptcy over this year, as the rising cost of placing children in care pushes budgets to breaking point.
Rising costs have resulted in an expected £639m overspend, the County Councils Network (CCN) has warned, thanks in large part to spending on children’s services “spiralling out of control”, accounting for almost half of the deficit.
It’s the latest alarm bell raised by councils, as fears of financial ruin for local government grow. Councils also warned this week of the imminent collapse of homelessness services without £100m of emergency funding, while a growing wave of refugee homelessness brings even greater strain.
Much of the shortfall is out of councils’ control, said councillor Barry Lewis, vice chair of the CCN.
“The number of vulnerable children requiring care has risen dramatically post-pandemic, while inflation and a broken provider market in statutory care placements mean councils face no choice but to pay spiralling fees,” said Lewis.
“After a decade of continuous cutbacks, the scale of reductions and use of reserves needed to fill the funding shortfall is simply unsustainable.”
