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Rachael Wardell’s year as president of the Association of Directors of Children’s Services (ADCS) is a pivotal one for children’s social care in England.

In the next 12 months, the Department for Education (DfE) expects councils to “transform the whole system of help, support and protection, to ensure that every family can access the right help and support when they need it, with a strong emphasis on early intervention to prevent crisis”.

Under the DfE’s Families First Partnership programme, authorities and their partners are tasked with establishing family help services – to support families with multiple and complex needs to stay together where possible – and multi-agency child protection teams – to intervene decisively when children are at risk of significant harm.

These reforms are underpinned by the Children’s Wellbeing and Schools Bill, which also heralds action to reshape placements for looked-after children, to boost sufficiency and quality, better support children with the most complex needs and curb excess profit-making by providers.

An eye-watering challenge for DCSs

It would be a daunting agenda at the best of times for directors of children’s services also facing severe challenges in relation to other areas, such as special educational needs and disability (SEND) services.

But against the backdrop of global economic turbulence, deepening child poverty and tight public finances, the challenge seems eye-watering.

However, Surrey council director Wardell, who succeeded Andy Smith on 1 April 2025, says she is excited to take the helm at ADCS.

Rachael Wardell (photo supplied by ADCS)

“It’s a really interesting time to be president. With a relatively new government with a big agenda, I think it’s a very exciting time to be working closely with the Department for Education and others.”

Her approach, she says, will be one of continuity with her predecessors, adding that it is important for the association not to be “chopping and changing in terms of what we’re seeking to do when we work with government”.

“What we’ve learned that if you work with central government, you can’t, in the life of one presidency, necessarily achieve change that you set out to achieve. It happens over years.”

Influence on agency social work policy

An example of this is policy on the use of agency social workers in children’s services.

Wardell’s predecessor but three, Charlotte Ramsden, spoke out on the issue in 2021, calling for national pay rates for locums to manage costs and enhance workforce stability.

Ramsden’s successor, Steve Crocker, went further the following year, in suggesting an outright ban on social work employment agencies to tackle the “profiteering” practices of some.

The DfE then proposed national rules to regulate councils’ use of agency staff, which were consulted upon under Crocker’s successor, John Pearce, and then started to be implemented under Wardell’s predecessor, Andy Smith. Both Pearce and Smith worked with, and sought to influence, the department on the rules’ content.

The rules’ implementation will conclude under Wardell, who has been involved in ADCS’s influencing effort throughout as chair of its workforce policy committee, until 2024, and then vice-president over the past year.

Fall in use of locums ‘influenced by rules’

The DfE’s latest children’s social work workforce data showed the first fall in agency numbers in seven years, in the year to September 2024. Though this was one month before the rules came into force, Wardell is clear that they were a factor in councils’ reduced use of locums.

“I’m pretty clear that it is a response to anticipating the changes coming in and lots of positive conversations between agency social workers and their local authorities about whether now is the right time for them to become permanent.”

With the rise in the number of permanently employed social workers exceeding the fall in the number of locum staff, Wardell says it is not a case of agency workers leaving the profession.

“Obviously, we have to wait and see if it continues to play out in that positive way,” she says. “But all of the anecdotes I hear, alongside the data that I see, says that we are having different kinds of conversations with our social workers about permanent employment, which is a positive thing.”

The current Labour government is going further than its Conservative predecessor on the agency rules by, firstly, putting them into law, and, secondly, applying them to council children’s social care staff generally.

Wardell welcomes this move, saying ADCS was concerned about bad practices, such as some agencies only supplying authorities with whole teams, not the individual locums they need, being applied to non-social work staff.

Recognising the value of non-social work staff

These staff – early help workers, family support practitioners – will play a critical part in the DfE’s social care reforms, as part of family help teams, holding cases as lead practitioners, including after they enter the statutory realm of a child being in need.

Wardell welcomes this acknowledgement of these practitioners’ skills and experience.

“A lot of times there was a failure to recognise the other qualifications that they had,” she says. “They are already tremendously skilled and experienced and we welcome that parity of esteem that the new framework provides for them.”

Concerns have been raised, including by Ofsted and the British Association of Social Workers, about the potential risks from not having social workers hold statutory cases.

However, Wardell says councils are already investing in the professional development of family support staff, and other non-social workers, and she expects this “to be strengthened under these arrangements”.

But what of the government’s wider agenda of rebalancing the social care system away from putting children on child protection plans or taking them into care towards supporting families to stay intact?

Councils have succeeded in boosting investment in family support since 2021 following several years of stagnation, but spending on it pales in comparison with expenditure on safeguarding and the care system.

Prospects for success for plan to ‘rebalance’ social care

Wardell says the prospects for rebalancing the system are “the best in a long time”. Most councils, she says, have practice models – such as family safeguarding – that are focused on supporting families to resolve their needs and stay together.

This is now being aided and abetted by policy, legislation and funding.

To help them engineer the shift, the DfE has provided authorities with a £270m children’s social care prevention grant in 2025-26, which they are expected to use in tandem with further just over £250m previously allocated to the now closed Supporting Families programme.

Wardell says this is “absolutely better than not having that funding there at all”, but is not sufficient on its own, being a small fraction of council spending on children’s social care (about £14bn).

“Some of our challenge is to bend the rest of our resources in the same direction – and to treat the funding like yeast, as a catalyst,” she adds.

Making this happen is no easy task, given the other pressures on children’s services.

Combating the high cost of placements

Not the least of these the high and rising cost of placements for children in care, as a result of an increasing care population, with more and more complex need, shortages of provision and alleged “profiteering” by providers.

The government is seeking to tackle this both through investment in children’s home capacity and foster care and reforms to the commissioning, regulation and provision of placements.

The Children’s Wellbeing and Schools Bill would enable ministers to direct councils to set up so-called “regional care co-operatives” in order to commission care collectively, giving them greater power to shape provision to meet children’s needs.

It would also introduce DfE financial oversight over the most significant providers, to guard against them unexpectedly failing and leaving a gap in provision. In addition, it would provide ministers with a backstop power to cap provider profits, should other measures not curb excess profit-making.

Wardell is positive about this package of reforms.

However, whatever the merits of legislative reform and increased funding, councils’ success in rebalancing the system are also dependent on the demands on them generated by social needs and pressures.

‘More child poverty and social disadvantage’

“We’ve seen upwards pressure driven by child poverty and some of the impact on our communities of social disadvantage and also some of the other changes in society around extra-familial harms, exploitation and radicalisation, all of which are challenging to respond to,” she says.

Beyond that, the government is now wrestling with the impact on the public finances of a less secure and more economically turbulent world. This heralds tight public finance settlements for services other than defence and the NHS in the forthcoming spending review, which will set expenditure limits from 2026-29.

Wardell’s message to ministers is to stay the course on children’s social care reform, based on an invest to save argument.

“We would say that we need a long-term financial settlement that provides us with security for children’s services and for local government more broadly, to go forward,” she says.

“I think that we would say that if you get things right for children, you are storing up positive financial impact for future years, because you have lower cost pressures when those young people reach adulthood.”

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The government has committed £25m to boosting foster care recruitment and support in England from 2026-28.

The money was announced in the government’s spring statement last month, when the Treasury said it would be used to recruit a further 400 fostering households.

Further details were provided last week by children’s minister Janet Daby, in response to a written parliamentary question from Liberal Democrat MP Tom Gordon.

Daby said the money would be available over two years – 2026-27 and 2027-28 – and was also designed to fund peer to peer support for foster carers, as well as bolster recruitment.

The funding builds on £36m allocated from 2023-25 by the previous government and £15m for 2025-26 provided by the current administration to tackle shortages in England’s fostering capacity. There was a 10% drop from 2021-24 in the number of mainstream foster carers – a category that excludes kinship carers approved to look after specific children.

Investment in regional fostering schemes

The investment to date has been designed to roll out regional fostering recruitment and retention programmes, set up by clusters of local authorities. These comprise three elements:

1. A fostering recruitment support hub, providing an information and support service to help prospective carers from their initial enquiry to making an application.
2. A communications campaign to drive interest in fostering across the region and increase the number of enquiries received by the hub.
3. Expanding the ‘Mockingbird model’, developed by the Fostering Network in the UK, under which “constellations” of fostering households provide mutual support to one another, led by an experienced carer who provides a ‘hub home’ for the others. A 2020 evaluation of the scheme for the DfE found that households who participated in Mockingbird were 82% less likely to deregister than households who did not.

In her answer to Gordon, Daby did not confirm whether the £25m for 2026-28 would provide further funding for these regional programmes or a different purpose.

Foster carers ‘lack authority to take decisions’

Alongside the increased investment, the DfE is also planning to enable foster carers to take more day-to-day decisions about children in their care.

Currently, a child’s placement plan must set out where authority to make decisions has been delegated from parents and councils, where they share parental responsibility, to carers, in relation to matters including healthcare, education, leisure, home life, faith and social media use.

Statutory guidance states that foster carers should have delegated authority in relation to day-to-day parenting decisions, but the Fostering Network has warned that this is not borne out in practice.

The charity worked with Green MP Ellie Chowns to table an amendment to the current Children’s Wellbeing and Schools Bill to give foster carers delegated authority over these decisions by default.

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Pledge to reform delegated authority rules

Though this was not accepted by the government, it has pledged to consult on amending the Care Planning, Placement and Case Review (England) Regulations 2010, which set out the current rules around delegated authority, to achieve the same result.

In her response to Gordon, Daby said: “The department has also begun conversations with the sector about proposed changes to delegated authority, ensuring that all foster carers have delegated authority by default in relation to day-to-day parenting of the child in their care.”

The minister added that the DfE was “committed to improving practice and guidance” in relation to the handling of allegations against foster carers, which she said was “a key contributor to high levels of…deregistration”, but did not set out further details.

Fostering body urges greater focus on retention

Daby’s statement came as fostering information service Foster Wiki released a report about carer recruitment and retention, based on analysis of data and its research with carers.

While praising the DfE’s investment in regional recruitment hubs as “a crucial and commendable step” in addressing fostering’s workforce challenges, it called for a sharper focus on retention to prevent experienced carers from leaving the sector.

This should include greater professional recognition of foster carers, backed by ongoing training and nationally recognised qualifications, a remuneration system based on skills, specialism and experience, and an independently managed allegations process, with representation and advocacy for carers.

The Adoption and Special Guardianship Support Fund (ASGSF) will continue in 2025-26, with £50m available to fund therapies and specialist assessments for children formerly in the care system.

Children’s minister Janet Daby made the announcement today after being called to the House of Commons to confirm whether the ASGSF had a future, one day after it expired.

The announcement ends months of speculation about the ASGSF’s future, during which Daby – and on one occasion, Keir Starmer – have repeatedly failed to confirm whether the fund had a future beyond 31 March 2025.

Significant uncertainty for children and families

The situation had created significant uncertainty for thousands of children and families, led to some having their therapy brought to an abrupt end and delayed applications for support for those whose needs had been newly assessed by councils or regional adoption agencies (RAA).

Campaigners and therapy providers warned that this had exacerbated the trauma experienced by the children concerned, all of whom were formerly in care and, in most cases, were now in adoptive or special guardianship placements.

When funding ended yesterday, the Department for Education maintained the line ministers had kept to for two months – that it would set out details on the ASGSF “as soon as possible”.

Liberal Democrat spokesperson for education, children and families Munira Wilson then tabled an urgent question in Parliament today asking the government to confirm whether the ASGSF had a future.

Surprise announcement of £50m for 2025-26

To her surprise, Daby responded by saying: “I’m very happy to confirm today that £50m has been allocated for the Adoption and Special Guardianship Support Fund for this year. I’ll be sharing further details with the House in the next few days and opening applications.”

The funding is broadly in line with levels over the past three years, during which £144m was allocated to the ASGSF.

Funding beyond 2026 is subject to the government’s spending review, which will report this summer.

However, Daby said that ministers had “no plans” to end the ASGSF in March 2026, pointing to councils’ duties under the Adoption and Children Act 2002 to assess needs for adoption support and then decide whether to provide services.

Minister ‘appreciates’ impact of delay on children and families

Daby added: “I very much appreciate that the delay conforming continuation has bene a very difficult time for many. I’m especially concerned for children and families as many of those who the ASGSF supports are in great need of continued help.”

She said she also recognised the impact on therapy providers, some of whom have had to seek other sources of work, prompting warnings from adoption leaders of reduced capacity for ASGSF-funded services.

In response, Wilson said: “I welcome the announcement we’ve just heard form the minister, which none of us were accepting as many of us on all sides of the chamber have spent the last few months asking question after question and being batted away and told that an answer was forthcoming.”

Children ‘left in limbo’

She said the fund was for children who had suffered the “deepest trauma”, but they had been “left hanging and in limbo”.

Wilson and several other MPs shared stories of the anxiety experienced by constituents because of the delay in confirming the fund’s future.

Concerns were also raised about the significant backlog of ASGSF cases that will need to be considered by consultancy Mott MacDonald – which administers the fund on behalf of the DfE – when applications reopen.

Conservative MP Julia Lopez asked if there would be resource put into clearing the backlog, but Daby did not answer the point.

No commitment to putting funding on longer-term basis

Though Daby suggested funding would continue beyond 2026, MPs also asked for it to be placed on a longer-term basis.

Currently, funding for therapy is only provided for 12 months – or until £5,000 has been exhausted – meaning councils and RAAs must reapply on behalf of children and families who need longer-term support. However, Daby did not respond to this point.

At one point during the debate, Daby appeared to imply that the fund would be extended to those kinship families who are currently not covered by it, but she later said its remit would not be expanded.

‘What has happened has been really unforgivable’

Sector bodies welcomed the continuation of the fund but heavily criticised the delay in making the announcement.

For Adoption UK, chief executive Emily Frith said: “The fund has transformed the lives of tens of thousands of children and it’s a huge relief to have this commitment for a further year of specialist support.

“Unfortunately the delay has caused great distress for families and has risked further harm to children. There will now be a backlog of applications, and further waits for people in desperate need of support. What has happened has been really unforgivable. The government must open applications immediately, and then announce a permanent Fund so they avoid ever causing such distress again.”

Families face ‘dangerous gap in therapy’

Consortium of Voluntary Adoption Agencies (CVAA) chief executive, Satwinder Sandhu said it was “enormously relieved and pleased that the funding has been confirmed”.

However, he warned: “We now have to redirect our concerns to the thousands of families facing a dangerous gap in therapy, of unknown length, while the fund is flooded with applications (once they re-open the application portal that is).

“It’s a dire situation which needs an emergency strategy from the DfE to identify and fast-track families in most need. There also needs to be consideration of emergency funding to plug the gap or at least reimburse services which have to use their reserves to keep children safe these next few months.”

He added: “What’s clear is that in recent months we have witnessed a shortsighted approach from government towards adoptive families. They recognise the urgent need for more prospective adopters, yet they undermine this by failing to provide adopters with assurances of support which is essential for all children being placed.”

Kinship, which advocates for kinship families, issued a similarly qualified message.

Delay ‘has led to immense worry and stress’

“This news will come as welcome relief to all of those kinship families who were deeply concerned about their children losing access to vital therapeutic support,” said its director of policy and communications, Rhiannon Clapperton.

“However, we remain deeply frustrated that this clarity has only come after the fund had expired and after a lengthy period of unnecessary uncertainty.

“The absence of any information about the future of the fund has led to immense worry and stress amongst the kinship families we support and campaign alongside.”

She added: “It is vital the government now works at pace to mitigate against the negative impacts of the delay and ensure that applications for therapeutic assessments and support can proceed as quickly as possible.”

Call to extend fund to more kinship families

Family Rights Group’s chief executive, Cathy Ashley, said the government had “extended a vital lifeline for families to access therapeutic support for adopted children and some in kinship care arrangements”, but urged ministers to extend the ASGSF’s remit.

“Family Rights Group has long urged the government to remove the requirement for kinship children to have been in the care system to be eligible, and to include those in informal arrangements.

“Longer-term funding security and improving the application process would be a boost to families too.”

Parliament’s All-Party Parliamentary Group (APPG) on Kinship Care made a similar point in response to the news, saying: “The minister was unclear on whether further children in kinship care could become eligible for this support. Our group, alongside families and the sector, has been calling for this to ensure all children in kinship care who need this are able to access it.

“We are encouraged by the extension but will scrutinise the details including any expansion when they are available.”

The government has granted almost one in five English councils ‘exceptional financial support’ (EFS) to help them balance their books in 2025-26.

Twenty seven of the 153 authorities with social services have been granted EFS, up from 17 last year, reflecting the scale of pressures facing councils in areas including adults’ and children’s services.

The dispensation means the authorities will be able to borrow or use receipts from the sale of assets to fund day-to-day (revenue) expenditure; typically, these may only be used to fund capital projects, such as new buildings or infrastructure.

Requirement to balance books

By law, councils must balance their books each year. EFS is generally designed to prevent authorities from having to issue a so-called “section 114 notice”, declaring that they are unable to set a balanced budget, a move typically followed by deep cuts to non-statutory services, often overseen by government troubleshooters.

The 27 authorities include all six of those who have been permitted to raise council tax by more than 4.99% without having to gain the consent of local citizens through a referendum: Birmingham, Bradford, Newham, Somerset, Trafford and Windsor and Maidenhead.

Birmingham has been granted the highest level of EFS for 2025-26 (£180m), followed by Croydon (£136m) and Bradford (£127.1m).

Mixed views on generosity of council finance settlement

There are mixed views on the generosity of the government’s finance settlement for councils for 2025-26, which was confirmed earlier this month.

According to think-tank the Institute for Fiscal Studies (IFS), if all authorities increased council tax by the maximum permitted without a referendum, funding for English councils would rise by £4.3bn in 2025-26, which it described as a “substantial cash-terms increase”.

Authorities would also be able to make use of an extra £1.1bn through a new scheme designed to charge producers for their use of packaging. Excluding £470m allocated to help councils meet the costs, for their own staff, of April’s rise in employer national insurance contributions (NICs), the IFS has said this amounted to a maximum 6.4% rise in resource for authorities in 2025-26, after taking account of inflation.

However, local government leaders have said the funding was not sufficient to address pressures, particularly in social care, driven substantially by the costs of compensating care providers for the rise in employer NICs and this year’s 6.7% increase in the national living wage (NLW).

Government ‘under no illusion about state of council finances’

Announcing the exceptional financial support package today, local government minister Jim McMahon said: “We are under no illusion of the state of council finances and have been clear from the outset on our commitment to get councils back on their feet and rebuild the foundation of local government.”

He said ministers were encouraging authorities to “come in confidence where needed to seek help and be assured we will offer a relationship of partnership – not punishment”.

However, London Councils, which represents the capital’s boroughs, raised concerns about the use of EFS to shore up authorities’ finances.

Exceptional financial support ‘a misnomer’

“Exceptional financial support is a misnomer – it is no longer exceptional and it fails to provide sustainable financial support, instead forcing local authorities to borrow to maintain basic statutory services,” said London Councils chair Claire Holland. “Rather than resolve the crisis, EFS is a short-term measure that leaves us with more long-term debts to worry about.

“We desperately need a sustainable solution to the crisis in local government finance, which has been years in the making. We welcome the government’s commitment to working with local authorities to reform a funding system which is fundamentally broken and to bring long-term stability to council finances.”

The government’s planned reforms will see councils given multi-year finance settlements and more flexibility of how they use their money, and funding formulae changed to better reflect need.

While the first two measures have broad support across councils, the latter has divided opinion, with county authorities fearing they will be penalised by a shift to a more deprivation-based distribution of funding.

This has been foreshadowed in the 2025-26 settlement by a £600m ‘recovery grant’, whose distribution is based on councils’ deprivation levels.

The government has let six English councils with responsibility for social care increase council tax rates by more than national limits this year.

Birmingham, Bradford, Newham, Somerset, Trafford and Windsor and Maidenhead will be able to increase levies by more than will the other 147 social services authorities; the latter would need the approval of citizens through a local referendum to raise rates by 5% or more.

Bradford will be allowed to raise council tax by 9.99%, Newham and Windsor and Maidenhead by 8.99%, and Birmingham, Somerset and Trafford by 7.49% in April 2025 without a referendum, said deputy prime minister Angela Rayner this week.

Tax rises ‘to prevent financial distress’ for councils

The authorities had all requested “exceptional financial support” , a system by which councils can receive government aid – usually in the form of loans – to address funding pressures they consider “unmanageable”.

In a statement to parliament setting out the finalised local government finance settlement for 2025-26, Rayner said the decision was taken to help “prevent these councils falling further into financial distress” and on the basis that they had “amongst the lowest levels of council tax” in the country.

Think-tank the Institute of Fiscal Studies (IFS) said five of the six authorities had council tax rates for Band D properties that were in the lowest quarter, nationally, though Somerset’s was above average. The South West authority said it was facing a £66m funding gap in 2025-26, driven chiefly by social care pressures, and that the additional council tax increase would not fill be enough to fill this.

‘A substantial cash-terms increase’

According to the IFS, if all authorities increased council tax by the maximum permitted without a referendum, funding for English councils would rise by £4.3bn in 2025-26, which it described as a “substantial cash-terms increase”.

Authorities will also be able to make use of an extra £1.1bn through a new scheme designed to charge producers for their use of packaging. Excluding £470m allocated to help councils meet the costs, for their own staff, of April’s rise in employer national insurance contributions (NICs), the IFS said this amounted to a maximum 6.4% rise in resource for authorities in 2025-26, after taking account of inflation.

However, local government leaders said the funding was not sufficient to address pressures, particularly in social care, driven substantially by the costs of compensating care providers for the rise in employer NICs and this year’s 6.7% increase in the national living wage (NLW).

Funding ‘falls short of what is desperately needed’

Local Government Association chair Louise Gittins said: “Extra money for councils next year, including compensation for employer national insurance contributions increases, will help meet some of the cost and demand pressures they face but still falls short of what is desperately needed to cover them all.”

The settlement includes a £270m children’s social care prevention grant, to help roll out family help services and implement a new duty on councils to offer parents a family group decision making meeting whenever they are considering issuing care proceedings for a child.

It also comprises an £880m top-up for the social care grant, which covers both children’s and adults’ services, while authorities will be able to raise council tax by 2% specifically to fund adult social care.

The Association of Directors of Adult Social Services (ADASS) has calculated that these two measures combined would raise about £1.2bn extra for adults’ services in 2025-26 – well short of the £1.8bn in extra costs they have calculated that authorities are facing.

‘Substantial overspending on social care and homelessness’

In its response to the settlement, the organisation representing the capitals’ boroughs said they were facing a funding gap of £500m in 2025-26, despite the settlement, driven by social care and homelessness services.

London Councils said that boroughs were facing overspends of £180m on adult social care, £150m on children’s social care and £270m on homelessness services in 2024-25.

“We are dealing with a range of immense challenges in London, but the worsening homelessness emergency represents the biggest single risk to borough finances,” said London Councils chair Claire Holland.

“The impact of homelessness on Londoners – especially families with children – is devastating, and the costs to boroughs are utterly unsustainable.”

Mixed views on government approach to funding

The County Councils Network (CCN) said the costs of the employer NIC and NLW rises outweighed additional funding received through the settlement for the shire authorities it represents.

It also took aim at the government for redirecting money away from these areas through a £600m ‘recovery grant’, the distribution of which was based on deprivation levels, which ministers said were a proxy for population need.

In her statement, Rayner described this is the “first meaningful step” towards reforming funding based on “an up-to-date assessment of councils’ funding needs and financial resources”, which would be implemented from 2026-27.

The grant was welcomed by metropolitan councils’ body the Special Interest Group of Municipal Authorities (SIGOMA), which said it would “provide welcome relief to the most deprived areas after a decade of disproportionate cuts and increases in demand”.

However, the CCN, whose members are receiving just 3% of the recovery grant, has argued that significant areas of need are not fundamentally driven by deprivation.

Social care and SEND demand ‘key drivers of need’

“The CCN’s evidence shows that demand and market failure across adult and children’s social care and special educational needs services are the main reasons as to why councils across all four corners of the country are struggling,” said its finance spokesperson, Barry Lewis.

“If the trend of this finance settlement does continue, the government will completely understate the very real financial pressures faced by councils outside of towns and cities and it will push many county and unitary councils to the brink.”

The news comes with the government having announced its intention to replace existing two-tier (county and district) councils by unitary authorities and replace small unitaries with bigger bodies, in order to boost value for money and clarity of service responsibility for citizens.

Various groups of councils have come forward with proposals for reorganisation already and the government is planning to create some of the new unitaries during this parliamentary term.

Sector bodies have voiced concerns about the future of the Adoption and Special Guardianship Support Fund (ASGSF), with the government having failed to confirm funding beyond March 2025.

Under the ASGSF, currently worth £48m a year, councils and regional adoption agencies (RAA) apply for funding for therapeutic support for adopted children, those placed with a family awaiting adoption or those who have left care under a special guardianship order (SGO) or child arrangements order (CAO).

If applications are approved, families may receive up to £2,500 per child for a specialist assessment and £5,000 per child for therapy annually, limits that can be exceeded in exceptional circumstances.

Funding lasts for up to a year, with councils and RAAs having to reapply to continue services for families. In 2023-24, almost 19,495 funding applications from RAAs and councils were approved, mostly for therapies.

Delay ‘very tough on families’

As things stand, the Department for Education, via delivery partner Mott MacDonald, will approve applications for services that start before the end of March 2025 – and extend for up to a further year – but not beyond.

“The delay in confirming funding for the ASGSF for the next financial year is very tough on families,” said charity Adoption UK’s director of public affairs and communications, Alison Woodhead.

“Thousands of children could be facing a sudden break in support, which is likely to mean many backwards steps in the difficult journeys they are on to understand and recover from their experience of trauma and loss.”

Funding ‘cliff edge’ leaves ‘uncertain future’

Woodhead referred to the fact that previous extensions to the ASGSF – for 2021-22 and 2022-25 – had been announced towards the end of the previous financial year.

She added: “This cliff edge in support every Treasury spending round can also impact the trust a child has worked hard to develop with their therapist. Waits for ASGSF funded support are already lengthy, but families waiting to start therapy are now facing an even more uncertain future.”

The concerns echo those voiced by the Consortium of Voluntary Adoption Agencies (CVAA) in a report published in October last year.

This warned that the uncertainty around the ASGSF was “causing much anxiety for families parenting children with complex needs” and widening gaps between children’s treatment sessions, which it described as “destabilising and wasteful”.

The same message was relayed by Ofsted in a report last year based on inspections of six RAAs. It said that uncertainty over the future funding of the scheme had prevented adopters from making long-term plans for their children’s needs.

Announcement on funding due shortly – minister

In a response to a parliamentary question, issued last week, children’s minister Janet Daby said a decision on the fund was due shortly.

“The department will shortly be finalising business planning decisions on how its budget will be allocated for the next financial year.

“All decisions regarding the Adoption and Special Guardianship Support Fund (ASGSF) are being made as part of these discussions. An announcement will be made as soon as possible.”

‘Vital’ importance of therapies in helping children make sense of past

Children’s charity and adoption agency Coram, which hosts London-based RAA Ambitious for Adoption, stressed the “vital” importance of therapeutic services that understand the needs of children who have “faced sudden losses, being separated from their birth parents and their homes and have had additional abusive experiences within these relationships”.

Dr Anna Harris, clinical psychologist and head of Coram’s creative therapies team, said: “Often, the pain they’ve experienced is stored in their bodies and minds in ways we don’t always see. This can show up in emotional reactions, behaviors, and relationship struggles, even if they don’t have the words to explain what they are going through.

“These services provide the right support to help children make sense of their past experiences, and more importantly, help them find hope for their future.”

However, the fund has also faced criticisms.

Criticisms of support fund

Practitioners have described the administrative process as a “burden”, according to report on adoption support commissioning published by RAA support body Adoption England in November 2024.

This included completing a complicated and time-consuming application process, finding and vetting providers, handling invoices and overseeing contracts and the quality of services, the report said.

The paper also reported criticisms of the fact that funding could not be extended beyond a year, even when therapy was ongoing, and said eligibility criteria were “restrictive and inflexible to the emerging and evolving needs of children and young people”.

The report urged the DfE and Adoption England to review eligibility criteria, the application process and interventions accessible through the fund.

ASGSF ‘needs radical reform’

Meanwhile, the charity Kinship, while calling on the DfE to confirm funding beyond March 2025, said that the ASGSF needed “radical reform”.

From 2019-24, 84% of approved applications were to fund support for children in domestic adoption placements, with just 14% for those on SGOs, despite more children leaving care via the latter route during this time. In 2023-24, just 37 of approved applications (0.2%) were for children under a CAO.

“The most recent figures on applications show that although applications for kinship families are increasing, they remain considerably lower than for adoptive families,” said Kinship chief executive Lucy Peake.

“As a minimum, government should ensure all local authorities and RAAs record the split of awarded funding between SGO/CAO and adoptive families. Research into the therapeutic support offered by the fund to kinship families should proceed at pace to inform future delivery and development, and the government should confirm the future of the fund beyond March 2025.

“In addition, local authorities should ensure professionals working with kinship families have sufficient knowledge and capacity to support effective applications for eligible kinship families, and should ensure any delivery providers understand the specific needs and experiences of kinship families and how they differ to adoptive families.”

An extra £200m for social care in next year’s council finance settlement is “wholly inadequate” to tackle additional costs facing adults’ services, sector leaders have warned.

The government pledged to increase the social care grant – which is ring-fenced for adults’ and children’s services in England – by £880m, in its provisional local government finance settlement for 2025-26, published on 18 December 2024.

This is up from the previously planned increase of £680m.

The Ministry of Housing, Communities and Local Government (MHCLG) also confirmed that councils would receive £515m to deal with the impact on them of the increase in employer national insurance contributions (NICs) that comes into force in April 2025.

Funding shortfall

However, this does not cover the extra costs facing authorities from the impact of the employer NICs rise on the providers that they commission, notably in adults’ services.

The Association of Directors of Adult Social Services (ADASS) has calculated that councils face an additional £1.8bn in adult social care costs next year, as a result of the rise in employer NICs, a 6.7% increase in the national living wage (NLW) and inflation more broadly.

However, dedicated additional funding for adult social care will be about £1.2bn (see box).

‘This means fewer people will receive care’

In response to the news, ADASS president Melanie Williams said authorities would still be left with a funding gap for adults’ services.

“This means that fewer people will be able to draw on care and support to help them stay independent and well, such as transport to go shopping, a regular cooked meal or support for family carers,” she said.

“Limiting the number of people who can access adult social care creates a vicious cycle; too many people reach crisis point and end up in hospital unnecessarily because they aren’t receiving low level care at home, and they can’t leave hospital because there isn’t enough support to return home safely.”

Additional funding ‘wholly inadequate’

The Homecare Association, which represents domiciliary care providers, said that, while the additional £200m was welcome, it was “wholly inadequate to stabilise the sector”.

The association recently published its calculation of the minimum price for home care in 2025-26, which is the price per hour providers need to be paid to cover staffing costs and operating costs, as well as make a reasonable profit.

This will rise from £28.53 this year to £32.14 in 2025-26, significantly as a result of the rises in employer NICs and the NLW, though the association has also increased its minimum profit margin from 5% to 7%, based on evidence from care market analysts LaingBuisson around current profit levels.

‘Care workers deserve better’

Association chief executive Jane Townson said meeting its revised figure for 2025-26 would require a funding boost from councils and NHS commissioners of £1.8bn in 2025-26.

She added: “Care workers deserve better. Employers cannot offer fair pay without a fair price for care. If Labour is serious about improving social care, they must act now.”

On behalf of charities providing care to disabled people, the Voluntary Organisations Disability Group issued a similar message.

Chief executive Rhidian Hughes said that, if the full costs for providers of the NICs and NLW rises were not met, they would be “forced to cut services”.

This reflects the findings of a survey by the Care Provider Alliance, an umbrella body for provider associations, on the impact of the NICs and NLW rises on organisations.

Almost two-thirds (64%) of organisations said they would need to make staff redundant, while 57% said they would have to hand care contracts back to councils and NHS commissioners, if their additional costs were not covered.

Variations in funding rises

A more positive outlook on the settlement was provided by think-tank the Institute for Fiscal Studies (IFS).

It said that, once a £1.1bn payment derived from a levy on businesses for packaging costs were taken into account, councils’ spending power – the total resource available to them if they maximised increases in council tax – would rise by 5.5% in real-terms on average in 2025-26.

This is above the 3.5% figure issued by the MHCLG, which excludes the ‘extended producer responsibilities’ levy.

However, the IFS stressed that, because of the increasing weighting of funding towards poorer areas, real-terms spending power increases would average 7.9% in the poorest tenth of areas and just 4.4% in the least deprived tenth of localities.

This is driven significantly by the distribution of a new £600m recovery grant, which will go to 33 of 36 metropolitan councils, half of London boroughs, unitary councils and district authorities, but just one in 21 county councils.

Counties issue alarm 

This was reflected in the County Councils Network’s (CCN) response to the settlement.

“By targeting the £600m recovery grant on metropolitan and urban councils, the government is ignoring the fact deprivation is not the only driver of councils’ costs nor the key indicator of which councils are under the most financial distress,” said CCN finance spokesperson Barry Lewis.

“Instead, it is demand and market failure across adult and children’s social care and special educational needs services that are pushing councils in all regions and of political control to the brink.”

Council funding reform

The changes in the distribution of funding in 2025-26 are the first step in a wider reform of local government funding, designed to ensure that it better reflects need, which will be implemented in 2026-27. The MHCLG has launched a consultation on this reform.

The IFS said that reform was needed because current approaches to allocating funding were “out of date and essentially arbitrary with respect to current local circumstances”. However, it stressed there would be “significant losers as well as winners from whatever reforms are implemented”.

Extra £13m for children’s services

The settlement also announced an extra £13m for children’s social care, which will fund the introduction of a mandatory offer of family group decision making to parents when councils are considering making an application for a care or supervision order.

The government has set limits on increases in council tax in 2025-26.

English local authorities will be able to raise core council tax by 3% and the adult social care precept – which is ring-fenced for the sector – by 2% – the same limits that have applied over the past two years. Authorities generally made full – or near full – use of this limit in 2024-25.

Councils will not be able to raise taxes by a higher amount without gaining public consent through a local referendum, said the Ministry of Housing, Communities and Local Government.

The 5% total rise in council tax forms part of a settlement which the government has said will enable authorities to increase their spending by 3.2% in real terms in 2025-26. This figure, revealed in last month’s Budget, also includes an additional £1.3bn in government grant for councils, at least £600m will be ring-fenced for social care.

However, social care leaders have warned that the extra funding for the sector risks being swallowed entirely by the impact on the sector of increases in the national living wage and employers’ national insurance contributions.

Social workers believe the Budget will bring cuts and job losses for the sector, a Community Care poll has found.

On 30 October, chancellor Rachel Reeves’ Budget allocated £600m in grant funding for social care in 2025-26 as part of a £1.3bn package for councils.

Combined with other revenue increases, this would see local authorities’ available budgets rise by around 3.2% in real terms next year.

However, Reeves also announced a 6.7% rise in the national living wage and an increase in employer national insurance contributions.

Sector leaders have warned that these tax and wage hikes risk swallowing up the extra grant funding, leaving little or nothing to address spending pressures.

In a recent poll amassing 661 votes, most social workers (65%) echoed this concern, predicting the Budget would lead to further strain, cuts and layoffs for the sector.

Only 13% called it a positive step forward, albeit a small one, while 22% said it was too early to determine the impact.

One social worker, Pam, commented that she was recently laid off by her employer, a children’s charity, due to cuts made as a result of the Budget.

“We have elected politicians, who live a life of wealth [and] privilege whilst the vulnerable, elderly, and working class are expected to foot every bill going, and work for free,” she said.

“As for the social work profession, we have nobody to blame except ourselves, as for years we have put up with and taken this nonsense, and still nobody wants to strike and fight for our rights.”

What do you think will be the Budget’s impact on social care?

Further delay to the reform of children’s social care will prolong the “crisis” the sector is in and increase costs, charities have warned in response to the Budget.

The Children’s Charities Coalition issued the message after the government indicated that “fundamental reform” of the sector would be implemented from April 2026 at the earliest, in its Budget document, published yesterday.

In the meantime, ministers have allocated over £250m for 2025-26 to “test innovative measures to support children and reduce costs for local authorities”, including allowances for kinship carers and the rollout of regional hubs to support foster care recruitment.

Testing ideas for reform

This is in addition to the £200m that was allocated by the previous Conservative government from 2023-25 to test measures from last year’s Stable Homes, Built on Love strategy, including the regional commissioning of care placements, setting up specialist child protection teams and establishing family help services.

The latter involve the merger of existing child in need and targeted early help teams and are designed to provide struggling families with earlier, less stigmatising support to help them resolve problems and keep their children.

They were the centrepiece of the 2022 final report of now Labour MP Josh MacAlister’s Independent Review of Children’s Social Care, which proposed investing £2bn in family help over four years, part of a £2.6bn package for the sector as a whole.

Care review lead Josh MacAlister

Investing in earlier help to reduce care population

MacAlister’s thesis was that investment in family help, alongside other reforms, would reverse “a trajectory of rising costs, with more children being looked after and continually poor outcomes for too many children and families”.

As a result, 30,000 fewer children would be in care by 2032-33 than would have been the case without reform, he said.

However, this was dependent on the reforms being implemented from 2023-24. Instead, the previous government responded by testing the measures proposed by MacAlister from 2023-25, leading him to warn that the sector was a “burning platform” and needed more urgent transformation.

‘Social care is in crisis today’

Meanwhile, a report for the Children’s Charities Coalition, which comprises Action for Children, Barnardo’s, the National Children’s Bureau, NSPCC and The Children’s Society, found that the government’s approach would cost the social care system an extra £200m a year over the long run.

The testing phase will now continue for a further year, with the government saying it would set out “plans for fundamental reform of the children’s social care system in phase 2 of the spending review”. This will report next spring, setting public spending plans for 2026 onwards.

“The government has also confirmed its commitment to further reforms to children’s social care in future spending reviews, but children’s social care is in crisis today,” the Children’s Charities Coalition said. “Further delays will see [costs] escalate.”

‘Promoting early intervention and fixing care market’

The government said its reform plan would include “promoting early intervention to help children stay with their families where possible and fixing the broken care market”. Some of its component parts will be included in the forthcoming Children’s Wellbeing Bill, which ministers have said will include measures to tighten regulation of care placements.

The Department for Education is yet to set out details of how the more than £250m for 2025-26 will be spent, beyond allocating £44m to testing financial allowances for kinship carers in up to 10 areas and extending regional fostering recruitment hubs to all council areas.

The latter provide a single point of contact for people interested in fostering and support them through the process from initial enquiry to application, and are designed to boost recruitment.

Further testing of family help and regional commissioning 

The remainder of the more than £250m is likely to include further funding for the families first for children programme, which comprises the family help model and specialist child protection teams and is being tested in 10 areas.

It may also resource the further testing of regional care co-operatives (RCCs), which are trialling the regional commissioning and delivery of care placements in the South East and Greater Manchester.

RCCs are designed to give councils – collectively – greater clout to shape services across their regions and ensure sufficient high-quality placements for children in care, in the context of widespread concern about current provision.

Families need support ‘when challenges are emerging’

Family Rights Group (FRG) chief executive Cathy Ashley welcomed the increased investment in kinship and foster care.

She added: “The spending review and the upcoming Children’s Wellbeing Bill must now prioritise the wider reforms the child welfare system urgently needs.”

“Children and parents need support when challenges are emerging. Family and friends should be given the opportunity to find solutions with a right to a family group conference safely averting children going into care.

“Kinship care needs to be defined in law alongside the practical, emotional and financial support kinship families need. And no child in care or care leaver should be left isolated and alone, with the offer of Lifelong Links [an FRG programme] to build those loving relationships we all need.”

DfE ‘must work at pace on kinship allowances’

The charity Kinship said: “We urge the Department for Education to work at pace to confirm plans for the kinship allowance trial so that kinship carers across England can understand how it might impact them.

“Although the trial will ensure more kinship families get the financial support they need to help children thrive, it must not paralyse progress towards a wider rollout of financial allowances for kinship carers across the country.”

Alongside the reform funding, the Budget also pledged an extra £1.3bn in grant funding for local authorities for 2025-26, at least £600m would be allocated to social care.

Concerns pay and tax rises will swallow up social care funding boost

In total, the government said local authority “spending power” – the maximum resource that councils have available to them – would rise by an estimated 3.2% next year. However, the £600m for social care falls far short of the £3.4bn in additional pressures that the Local Government Association (LGA) has calculated councils will face in adults’ and children’s services in 2025-26, compared with 2024-25.

Also, adult social care leaders have warned that extra funding risks being swallowed up by the costs to providers of rises in the national living wage and employer national insurance contributions.

For the Association of Directors of Children’s Services (ADCS), president Andy Smith said the funding for councils, while welcome, was a “short-term” measure.

“In order to ensure the stability of many vital and valued services, long-term, sustainable funding for local government and children’s services is the only solution,” he added.

Smith urged ministers to set out “sufficient multi-year settlements for local authorities so they can effectively plan for the future”.

The government is committed to introducing multi-year funding settlements, alongside reforms to how resources for councils are allocated, from 2026-27 onwards.