The idea

The Children Act Funding Formula would retain central responsibility for the funding of children and family services from national taxation, enabling local authorities to fulfil their duties under Section 17 of the Children Act 1989. We believe that this legislation remains well-designed to allow councils scope and flexibility to meet each child and family’s unique needs, whether that is simple, practical help or more complex intervention. What has been missing increasingly in recent years is sufficient funding for it. Also missing in current funding is weighting for levels of deprivation, which government data analysed by the Child Welfare Inequalities Project shows is a crucial factor in resourcing local authorities equitably. 

The Children Act Funding Formula would award 3 - 5 year grants to local authorities based on three factors:

  • Current and projected child population
  • Disabled children and young carers
  • Deprivation indices for the area

It would not be ring-fenced but, like Section 17, allow councils to decide in partnership with communities and families how best to spend it for children’s wellbeing.

The impact we hope this will achieve

A fair national funding formula accounting for levels of deprivation would reverse years of growing inequality between areas, during which councils with the highest levels of need have seen the biggest cuts to their budgets, and had the least to spend per child. Whilst accounting for variations in the specific needs of children in each area, it would enable all areas to achieve the same quality of outcomes as each other.

Over the long term, the sufficiency and certainty of the Children Act Funding Formula would allow local authorities to rebalance spending between Section 17 duties (including ‘early’ or ‘family’ help) and more critical interventions that have taken priority while budgets are insufficient to meet all levels of need. Combined with the Care Bank (submitted separately) the Formula would give every area the power and the resources to design services in partnership with local families, and to invest in the holistic support envisaged by the Children Act, from children’s centres to refuges to respite for families with a disabled child. Ultimately, families would receive the support they need to stay together wherever possible and fewer children would need to be taken into care.

- For a full explanation of the Children Act Funding Formula, click here.