Children’s social care reform delay will prolong ‘crisis’ and increase costs, charities warn

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.