Report of the Strategic Director for Children’s Services for Budget and Efficiency Group on the budget pressures in-relation to Looked After Children
Date: 4th July 2011
Final
LAC notes for Budget & Efficiency Group 4/07/2011
Introduction
This briefing note has been prepared for Elected Members to report on the current financial position of Salford Looked After Children (LAC) in light of
predicted £1.2 million overspend in foster care placements and a predicted overspend in residential placements of £600k.
The report will give an outline of current resources and overview of placement use. Data will contextualise the current position and map trends, identify placement type and associated costs and benchmark Salford’s position within AGMA and North West Authorities.
Salford looked after children and young people live in a variety of care provisions. This report focuses on those arrangements which are identified as additional financial pressure for the city- outside residential placements (OSP) and independent foster agencies (IFA). It is important to state here that there is a need for a mixed economy of care and Children’s Services support a position where Salford children will be cared for in a variety of placements which best meet their need.
Babies and younger children are looked after within a fostering placement and would not be considered for residential care within a children’s home. Older children and teenagers may be looked after within fostering or residential care. The care placement is best matched to the needs of the child or young person.
Data has been taken from the 2010/11 full year Placement Strategy Report, produced by the Commissioning and Partnership Team, Children’s Services, April 2011, Placements Northwest Regional Census 2010, produced April 2011 and Children’s Services 2010/11 Report Card.
Context
Salford has seen a large increase in the number of LAC from 492 in April 2010 to 585 at the end of March 2011. The current figure at June 2011 is 571.
Chart 1.1Salford Looked After Population 2010/11
Chart 1.1 clearly depicts how looked after figures have risen steadily throughout the year peaking at 585 in April 2011. This is an increase of 93 looked after young people from 492 at the beginning of the year.
Chart 1.2 Admissions and Discharges to and from Care within Salford 2010/11
Chart 1.2 shows from April 2010 a peak in admissions to care which, although consistently greater than the numbers being discharged, was on a downward trend until a sharp increase in October 2010. Admissions to care peaked again in December and began to fall in early 2011.
During these peaks, work was undertaken to audit work in the RIAT team. This work uncovered a number of cases where children needed to come into care, and a number of cases where children living with family and friends were approved as carers and became looked after.
Salford has historically had a higher number of looked after children than the national average, which is a reflection of Salford’s high levels of social deprivation and high instances of child neglect and parental substance misuse.
Nationally since the Baby Peter case, numbers have risen sharply. Salford’s weak Ofsted inspection and subsequent risk aversion in the safeguarding arena across the partnership, has also seen a sharp rise in the number of looked after children.
Salford are a member of Placements Northwest (PNW). This includes all Greater Manchester AGMA authorities. PNW is a children’s services project which leads on inter-regional development for 22 Northwest local authorities making out of authority placements.These placements cover four broad areas: Education, Fostering, Leaving Care and Residential sectors.
All future projects and actions of Placements Northwest are governed by the steering group. Other members of the group include strategic leads from Local Authority Children Services Departments, Partnership North West (SEN) and the Strategic Health Authority.
Financial Analysis 2010/2011
Cost of outside residential placements £7,125, 732
An outside residential placement is a registered children’s care home which is run by a private or independent provider. It is ‘outside’ of Salford City Council resources but could be located within Salford.
Salford City Council spot purchase placements for individual children as the needs of the young person cannot be met in a Salford City Council run children’s home. There are a number of reasons a young person may need to be placed outside of local authority care provision which may include; an attempt to break connections with criminal networks; need to break involvement in child sexual exploitation; sexualised behaviour; violent behaviour or request for a specialist therapeutic provision. A rigorous process is in place to ensure an outside placement is only authorised once all other options have been explored. However, for the first time this year young people have been placed in an outside placement straight from home due to lack of capacity in the city’s own provision.
The current average cost of an outside placement spot purchased by Salford is £2596 per week or £371.00 per day. Placement costs currently range from £243 to £695 per day. A number of factors affect placement costs including; number of staff required to care for a young person, occupancy levels of the home (smaller homes with less than 4 beds are more expensive) and specialist packages of care- including therapeutic input.
Chart 1.3 Outside Residential Placements 2010/11
In April 2010 there were 49 (9.96% of total LAC) young people in an outside children’s home placement from a LAC population of 492. This increased by 15 to 64 (10.94%) in March 2011.Although an increase adding pressure to an expensive resource, external placements have risen in line with an overall increased LAC population during 2010/11.There was only a 1% difference in external placements throughout the year. There were 55 outside placement moves throughout 2010/11. This could be a new admission to an outside placement or an existing outside placement move.
Cost of independent foster agency (IFA) placements £2, 919, 217
Independent Foster Agencies are independent and voluntary sector providers who recruit, train and support their own pool of foster carers. Placements are spot purchased and are based on capacity when there are no vacancies Salford City Council foster carers. IFA placements may also be used to meet the needs of a sibling group together who otherwise would be split up and placed with separate city council carers.
Placements are spot purchased with individual agencies.
Chart 1.4 indicates in April 2010 60 young people were placed with an IFA. This had increased to 107 young people placed with an IFA March 2011.
There has been a steep increase in the number of IFA placements used by Salford City Council throughout 2010/11 with a large jump in the autumn months which continued an upward rise peaking at 107 placements at year end.
Chart 1.4Number of Young People Placed with Independent Foster Carers 2010/11
Source- Placement Strategy 2010/11
Cost of in house foster care placements£3, 684, 436
In house foster carers are those recruited, trained and supported by Salford City Council. Being a Salford City Council resident is not a pre-requisite of becoming a Salford carer so some young people are looked after by city council carers but live outside Salford.
There was a net gain of 3 foster carers during 2010/11, increasing from 180 carers in April with capacity to care for 319 young people to 183 at the end of March with a capacity for 326 foster placements.34 carers with capacity for 51 places de-registered during the year. It is significant to point out here that this did not result in a loss of 51 placements as de-registration includes positive outcomes for children and de-creased financial impact for Salford through the granting of 5 Special Guardianship Orders, transition to Continuing Care where the young person remains living with the foster carer during their time in further education and foster carers adopting the young people they were caring for.
Benchmarking
Benchmarking data is taken from Placements Northwest Census Report 2010. Salford’s individual report was made available June 2011.
- Placements Northwest Census 2010 indicates Salford is out of step with other North West authorities using a higher mix of residential placements than fostering. However due to an increase in IFA placements this gap is closing. Budget expenditure will continue to increase as outside residential placements are the most expensive option. It is worth adding Salford has a larger number of local authority residential provision than other authorities which would increase the option of residential as a placement choice.
- Placements Northwest have identified Salford is paying above the regional average for outside residential placements.The reason for this is the significant size of the council’s residential provision. Young people are only placed in an outside placement if their needs can not be met in the city. Therefore they are likely to need a more expensive placements than other Local Authorities may be seeking.
- Placements Northwest Census data indicates that for the previous 2 financial years budget allocation per LAC was higher in Salford than the North West.
Chart 1.5 LAC population per 10,000 (0-17 year olds) by Northwest Local Authority
Source- PNW Census 2010
Chart 1.5 indicates the position Salford holds within Northwest neighbouring authorities in terms of looked after children. It clearly has a higher number of LAC than most authorities and is significantly higher than the Northwest average of 75.5.
Chart 1.6Children looked after in external provision
Source- Placement Strategy 2010/11
Chart 1.6indicates the numbers of Salford young people looked after in independent foster agency and outside residential placements during 2010/11 in relation to Salford’s total LAC population. It shows that the incremental increase of young people placed in IFA placements is greater than use of residential placements throughout the year.
Chart 1.7. Average Northwest IFA costs
Source- PNW Census 2010
Chart 1.7 indicates Placements Northwest Census 2010 calculations of average IFA placements across the Northwest taking into account the impact of ages upon placement costs.
Historically Salford has negotiated lower cost IFA placements which would go some way to explaining why at £771 per week IFA costs are only just above the regional average of £765. However, as an authority with a higher use of IFA’s Salford should be negotiating volume discounts and be represented at the lower end of the average cost table.
Further reference needs making here to the fact that 50% of children who became looked after 2010/11 were aged 4 and under which increases pressure on fostering and related use of IFA’s.
Chart 1.8Salford’s Looked After Children Budget
Source- PNW Census 2010
Chart 1.8 indicates Salford’s LAC budget increased markedly between 2008/20909 and 2009/2010. During 2009/10 and 2010/11 there was less fluctuation but this was due to services being funded to expenditure, following predicted overspends.
Chart 1.9Salford budget allocation per Looked After Child
Source- PNW Census 2010
Chart 1.9 Placements Northwest Census 2010highlighted budget allocation on LAC per head is significantly higher in Salford compared to the North West. Higher than regional average outside placement and IFA placement costs will explain some of this. In comparison to Northwest neighbours Salford uses more residential placements with a higher unit cost than fostering.
Financial Analysis 2011-12 based on Information available 30th June 2011
Forecast overspend on outside residential placements £600k
The current cost of residential placements based on the individual placement cost of each child is currently predicted to overspend by £600k.
Forecast overspend of Cost of independent foster agency (IFA) placements £1.2m
The current cost of residential placements based on the individual placement cost of each child is currently predicted to overspend by £1.2m
The overspends identified above are based on the current placements in the system as at the end of June. Any additional placements made between July and the financial year end will result in an increase in the overspending. Based on local knowledge and previous years information an estimate of 30 additional children should be accounted for within the current financial year. The cost of this will vary based on where the child is placed.
The average cost of a placement with friends and family £7.5k (range £6,288 -£9,567)
The average cost of a placement in in-house foster care £12.5k (range £9,416 - £16,804)
The average cost of a placement in independent foster care £40k (range £22,362 - £62,692)
The average cost of a placement in residential placement £135k (range £125k - £741k)
The worst case scenario would be that all these new children are placed in a residential placement at a cost of £3.037m (accounting for an additional 9 months of expenditure) and the best case scenario is that all children would be placed with family and friends at a cost of £168k. The reality is that there would be a mixture of places dependent upon the individual child needs.
Based on the worst case scenario the overall position therefore would result in total forecast outturn overspend position of £4.8m.
Appendix A shows a comparison of LAC actual and forecast expenditure for the period 2009-10 to 2011-12.
Trends
There were 4,611 referrals to Children’s Services during 2010/11 resulting in 3,114 initial assessments.
Salford’s LAC population has increased every month since April 2010.
The main reason for young people coming into the Looked After system since 2009/10 has consistently been due to abuse or neglect.
There were 247 admissions and 156 discharges to/ from care during 2010/11.
50% of all admissions to care 2010/11 were aged 4 years and under. Children this young would only ever be looked after in a foster placement.
In April 2011 there were 61 young people looked after in an outside residential placement. This is 10.6% of a total LAC population of 577 living outside of Salford City Council resources.
There has been an increase in younger children living in outside residential placements. Nearly 35% of children living in an outside placement in March 2011were aged 13 years and under. This figure was 24% in April 2010.
32 new foster carers were approved 2010/11. Total number of Salford in house foster carers 2010/11 was 183. Due to in year de-registrations this was an increase of 3 additional carers from the previous year. Total number of foster care placements has increased from 319 to 326.
Inter-Regional Joint Working
A significant number of inter-regional projects are being developed to consolidate purchasing power, streamline resources and manage expenditure.
Additional funding seconded Salford’s Fostering Recruitment Officer to project lead ‘You Can Foster’ Northwest foster carer recruitment project across 23 authorities.Salford had a target of 101 fostering enquiries as a direct result of the North West advertising campaign and achieved 132. Across the northwest this project has achieved 96% enquiry targets.
7 people are attending Skills for Fostering (first stage of the process). 2 people have completed Skills for Fostering and are being assessed as potential carers for Salford.
All external residential placements are referred through Greater Manchester Residential Framework which was launched January 2011. Only when placement needs or location cannot be matched through the framework will a placement be sought off framework.
Commissioning placements through the framework January 2011 to March 31st 20011 resulted in a saving of £7855.
Salford joined the Northwest Fostering Contract April 2011 which will result in savings on independent foster agency placements. Data is not available on savings at this time.
Additional Savings Achieved
In 2010/2011 £160,410 savings were negotiated on new and existing placements by Assistant Commissioning Managers with private providers of residential care.
£132, 725 volume savings were achieved as a result ofexternal residential placements commissioned with Northerncare.
These savings have been incorporated into the current financial position.
Future Actions
Continue to monitor and track LAC progress against Placement Strategy objectives. Quarterly Steering Groups to continue but due to the severity of the situation Leadership Team and Lead Member will receive a monthly position statement.
Monitor the impact and related savings of Salford joining the Northwest Fostering Contract on a quarterly basis.
Detailed analysis and case planning review of all young people placed in an IFA placement by a Social work trained reviewer.
Re-launched Resource and Family Support Panel will identify and secure additional resources to avoid an external residential placement being required. Stricter gatekeeping of requests for outside placements will be implemented July 2011.
Salfordwill join the Northwest 16+ framework when implemented July 2011. All leaving care provision will be commissioned through this framework resulting in lower cost placements and cost consistency across the region in an unregulated market.
Target all existing IFA placements to achieve volume cost reduction and re-negotiate placement fee, in line with Northwest Fostering Framework.
Improve marketing of in-house residential to social work teams to reduce requests for out of authority placements.
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Financial Information relating to 2009/2010- 2011/2012 / Appendix AOutturn / Q1 / Q2 / Q3 / Q4 / Outturn / % Inc / Forecast / % Inc
2009/10 / 2010/11 / from 2009/10 / 2011/12 / from 2009/10
Foster Care Allowances / £3,127,287 / £922,398 / £925,311 / £918,135 / £918,592 / £3,684,436 / 17.82% / £3,776,547 / 20.76%
Foster Care Agency / £2,479,720 / £533,457 / £609,050 / £778,317 / £998,393 / £2,919,217 / 17.72% / £4,080,131 / 64.54%
(Including Focus & 3D) / 18% / 21% / 27% / 34%
Adoption Allowances / £706,575 / £192,291 / £190,673 / £186,728 / £192,990 / £762,682 / 7.94% / £775,001 / 9.68%
Adoption Agency Services / £113,822 / £10,146 / £46,625 / £933 / £14,732 / £72,436 / -36.36% / £50,000 / -56.07%
Outside Placement Agency / £6,281,091 / £1,292,001 / £1,896,296 / £1,898,491 / £2,038,944 / £7,125,732 / 13.45% / £8,201,438 / 30.57%
Total / £12,708,495 / £2,950,293 / £3,667,955 / £3,782,604 / £4,163,651 / £14,564,503 / 14.60% / £16,883,117 / 32.85%
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