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The Department for Education (DfE) cannot demonstrate that it is meeting its objectives for children in foster and residential care, says a new report out of the National Audit Office (NAO). The long-term consequences of such children not getting the right care are poorer outcomes for them and increased costs to local authorities and taxpayers.

Local authorities spent £2.5 billion in 2012-13 supporting children in foster and residential care, a real terms increase of three per cent since 2010-11. However, according to the NAO, the DfE, which holds local authorities to account for delivery of these services, does not have indicators by which it measures the effectiveness of the care system. In addition, there is a lack of understanding of what factors contribute towards the costs of care.

Demand for care is increasing and varies significantly across England. Local authorities in England looked after 68,110 children (at the end of March 2013), the highest level for 20 years. This is partly because of a rapid rise in the number of children being taken into care, following the widely reported abuse and death of “Baby P” in 2007, while many local authorities expect or are already experiencing a rise in referrals linked to child sex exploitation scandals. Most children in care (75 per cent), are fostered. Nearly two-thirds (62 per cent) of children are in care because they have suffered abuse or neglect.

There has been no improvement since 2009 in getting children into the right placement first time and close to home. The DfE has an objective to improve placement stability and measures the number of placements a child has in a year and whether they are placed within 20 miles of home. At the end of March 2013, 34 per cent of children in care had more than one placement during the year, the same proportion since 2009, and 14 per cent of foster children and 34 per cent of those in residential care were placed more than 20 miles from home. The overall numbers have not improved in the last four years.

The cost of failure

Children's early experiences can have long-term impacts on their emotional and physical health, social development, education and future employment. Local authorities take children into care to improve outcomes for them but children in care do less well in school than their peers. In 2012/13, 15 per cent of children in care achieved five or more GCSEs at grades A* to C including Mathematics and English, compared with 58 per cent of children not in care. They are also more likely to experience problems in later life, which can have a wider social impact and lead to higher costs to the public purse. For example, at the end of 2013, 34 per cent of 19-year-olds who were in care at the age of 16 were not in employment, education or training (NEET), compared with 15.5 per cent of 18-year-olds. Research by York University has estimated the lifetime cost of a young person being NEET at £56,000 a year.

In 2012-13, local authorities spent on average between £131,000 and £135,000 on residential care for a child and between £29,000 and £33,000 on foster care for a child. However, costs vary between local authorities and by type of provider. The Department is aware of these variations in cost but not all of the reasons for them. Without a full understanding of the reasons for variations in cost the Department and local authorities will not be able to reduce them, the NAO says.

In 2014, the DfE launched an Innovation Programme to help it understand what is involved in effective commissioning to improve outcomes for children in care.

Amyas Morse, head of the NAO, believes that if the complex and challenging learning and development needs of children in care are not correctly assessed and tackled, the result is likely to be significant long-term detriment to the children, as well as cost to society. “If the Department is to break this pattern, then it needs to use its new Innovation Programme to understand what works, especially in terms of early intervention”, he says.

The NAO report, Children in care, is available at: www.nao.org.uk

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