Children Act Funding Formula submitted to the Treasury with updated evidence


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, envisaged by Section 17 of the Act as a ‘continuum’. As well as enabling 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 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.  

Children England proposes a funding formula expressly designed to reflect the varied costs of meeting the duties enshrined in the Children Act for every authority, based on three local-authority level factors:

  • Current and projected child population
  • Numbers of disabled children and young carers
  • Multiple deprivation indices for the area

Our representation this year is substantively the same submission we made to the Spending Review in 2020, as the need for a solution to the crisis in children’s services funding is only more acute, but provides updated evidence on the need for such a formula.

The value of greater investment by local authorities in the continuum of support envisaged by Section 17 of The Children Act 1989 is now undeniable. The imperative that this comes from central government, so that redistribution can address stark inequalities between areas in terms of both deprivation and the unequal effects of austerity across the nation, is clear if we want to ensure the best outcomes for all children, no matter where they live.

- Download Children England's full representation to the 2021 Spending Review