Derbyshire County Council Leader Councillor Barry Lewis is calling for urgent action from the Government to provide extra funding to deal with the ‘runaway’ costs of looking after children in care.
In a video released on 19th December, Councillor Lewis says increased demand for support and spiralling costs of private placements is jeopardising the council’s ability to balance its books, and he calls on the Government to take urgent action to address the issue, saying councils are ‘drinking in the last chance saloon’.
Since 2020 the numbers of children being cared for in Derbyshire has risen by 25% to just over 1,000.
Meanwhile, the increased demand for support means the costs of looking after Derbyshire children who cannot live with their birth parents has risen by £40m – an increase of 105% - in the past five years.
In the video Councillor Lewis says: “It’s no secret our council faces a significant in year financial challenge. We’ve always been a prudent council - it’s not down to any crazy schemes, or bad contracts or frivolous spending.
“It’s rising demand and inflationary pressures, and higher than expected wage increases. But there’s one area in particular that has caused us significant spiralling, runaway costs - and that’s care home placements for children.
“In a market where demand outstrips supply we’ve seen a further increase in costs while private care providers can pick and choose which children to accept and charge hyper-inflated costs.
“Private, independent care providers have always been a part of the way we look after children but in recent years this market has become distorted with some of the biggest private care providers making profits of over £300m last year – all on the backs of some of the most vulnerable children in the country and paid for solely by the taxpayer. This is immoral.
“Some companies involved are offshore, motivated purely by profit and less by concern for young people. This isn’t right, it’s exploiting the misfortune of young people who deserve better, and it’s treating the taxpayer as a cash cow.”
In 2019 the council spent an average of just under £4,000 a week on children’s placements – that has risen to almost £7,000 a week, with some placements for children with complex needs costing £15,000 a week.
Councillor Lewis, Councillor Alex Dale, Cabinet Member for Education and Councillor Julie Patten, Cabinet Member for Children and Families recently met with Derbyshire MPs to press Derbyshire’s case for extra cash.
Councillor Lewis added: “We’re faced with cutting services that residents value. Perversely we’re now having to look to reduce preventative and early intervention services, which would stop young people coming into care.
“We’re faced with feeding a spiral that will only erode our budgets quicker, because there are simply now no other alternatives.
“So we’re calling upon our MPs and Government to tackle this with urgency. We need urgent additional funding now and a pledge of radical intervention in the immediate future to fix the deeply broken and uncompetitive market for residential care. It would be a move that could potentially save millions overnight.
“We’ve called on Government before to deal with this issue, to cap fees or to intervene in this market in some way that can bring these extortionate costs under control. They have not and now this risks bringing well-run councils into bankruptcy. We’re drinking in the last chance saloon."