- Download our full representation to the Comprehensive Spending Review 2020, including the proposal for a Children Act Funding Formula


Children England first published the case for a Children Act Funding Formula in 2017, at which point cuts to local authority funding from central government and reductions in the social security safety net for families, pitched against rising rents and precarious wages, were already creating an unsustainably toxic mix for families and the services they relied on to avoid serious crisis. Local authorities warned that they were struggling to fulfil their statutory duties to children. Children England warned that pursuing a policy of devolved income-raising powers, rather than sustained re-distribution of funding from central government, would only exacerbate the situation, leaving the most disadvantaged communities in a particularly perilous, unsustainable financial position. Far from ‘levelling up’ areas experiencing poverty and low economic productivity, inequalities would widen further, as councils in those areas would be able to raise far less in local revenue from council taxes and business rate retention than wealthier areas, and further financial pressure would be put on already-disadvantaged local households. There is a strong correlation between levels of poverty and numbers of children experiencing abuse and neglect. So while even wealthier local authorities would struggle to fund adequate children’s services from locally raised income, the poorest would face an impossible divergence between resources and demand. 

Two years of similar government policy up to 2019 have seen a continuation of the trends in rising poverty, more thinly stretched local support services and rising intervention in families at crisis-point for whom social care can find no solution that keeps the family together: spending on ‘early help’ continues to fall and numbers of children looked after by the state continue to rise. Individual initiatives such as the erstwhile Innovation Fund are not capable of sustaining the whole of our local government sector, on which children rely.  As the Public Accounts Committee damningly concluded in 2019, one-off funding pots are no substitution for a ‘meaningful long-term plan for the [local government] sector’. 

Government data on children’s services visualised comprehensively by the Child Welfare Inequalities Project shows both the strong inverse correlation between spending on local family support services and spending on looked after children and the striking difference that local need, including levels of deprivation and disability, makes to councils’ spending capacity. If government wants to improve outcomes in public services for children and families, putting the child’s best interests at the heart of them, it must create a national funding formula that recognises the distinct nature of each local population, and retains responsibility for distributing nationally-collected funds equitably, according to need.

The Children Act 1989 remains a robust framework for local authorities commissioning children and family services in order to give them the flexibility to meet families’ needs, whether that’s through local social infrastructure, targeted and practical help, or statutory intervention. Funding for those services, therefore, must empower local authorities to understand local needs, and work with the community to develop the whole range of appropriate support. As well as enabling this full, uncompromised implementation of the Children Act 1989, funding of children and family services must be equitable across all areas of the country. This requires a national re-distribution of taxes to take account of the unique pressures and strengths of each area - especially after ten years of very different impacts of austerity and the unequal economic impact of the pandemic. 

- Download our full representation to the 2020 Comprehensive Spending Review, including the proposal for a Children Act Funding Formula