Budget includes £44m for kinship and foster care

The government has provided £44m for kinship and foster care in its Autumn Budget, part of a package of over £250m to support children’s social care reform.

The funding, for 2025-26, will enable up to 10 areas to test providing kinship carers with allowances to cover some of the costs of care, encouraging more family members or friends to come forward.

It will also lead to the extension of regional fostering recruitment hubs to all council areas, to help them recruit more carers.

Proposal ‘to generate hundreds of placements’

The Department for Education (DfE) said this would “generate hundreds of new foster placements, reduce local authorities’ reliance on the expensive residential care market and offer children a stable environment to grow up in”.

In the Budget, delivered on 30 October 2024, the Treasury said the £44m was part of an investment of over £250m in testing new ways of working in children’s social care next year.

Both policies show clear continuity with the approach taken by the Conservatives.

Testing allowances for kinship carers

In its kinship strategy, published in December 2023, the Tories pledged to pilot providing special guardians of former looked-after children with allowances equivalent to those received by foster carers in eight areas from 2024-28, backed by £16m in 2024-25.

Currently, only family and friends foster carers, among kinship carers, are entitled to an allowance, with special guardians or carers with a child arrangements order generally paid less, or nothing, by local authorities to look after children formerly in care.

The policy was not introduced before July’s general election and, since being elected, Labour has made no statement on it until now.

In response to the Budget announcement, the chief executive of the charity Kinship, Lucy Peake, said: “We are pleased that the government has made a commitment to trialling a new kinship allowance so that more children can be raised in well-supported kinship care with family and friends who love them, delivering better outcomes for children and for the public purse than the care system.”

Allowances ‘help promote stability and durability’ of kinship care arrangements

The Family Rights Group also welcomed the news, while social care evidence body Foundations pointed to evidence about the effectiveness of financial subsidies to kinship carers in promoting permanence.

A review of the evidence around kinship care, commissioned by Foundations, found a small but statistically significant impact on permanence from providing financial subsidies to kinship carers who take on guardianship for children, based on five papers across three US studies.

Its chief executive, Jo Casebourne, said: “Foundations welcomes the government’s support for the trialling of kinship care allowances in pilot local authorities. Our research shows that financial allowances for kinship carers increase the stability and durability of kinship arrangements.

“They make it more likely that families stay together safely, which could help children here avoid residential care and promote better outcomes for them.”

Promoting foster care recruitment

Regional fostering recruitment hubs were introduced as part of the Conservatives’ 2023 Stable Homes, Built on Love strategy, to provide a single point of contact for people interested in fostering and support them through the process from initial enquiry to application.

The Tories provided £36m from 2023-25 to fund these and other initiatives in order to recruit 9,000 more foster carers and redress a 6% drop in the number of mainstream fostering households from 2021-23.

As of September this year, the hubs covered 64% of the country, and the DfE said they would now be extended to all local authority areas.

Over £250m for children’s social care reform

The government has not stipulated how the remainder of the more than £250m for children’s social care reform, announced in the Budget, will be spent.

However, it is likely to include the continuation of some of the initiatives currently being tested as part of the previous government’s Stable Homes agenda. These include:

• The families first for children pathfinder, which is testing, in 10 local areas, the development of family help services, merging child in need and targeted early help provision, and specialist child protection teams.
• The regional care co-operatives pathfinder, which is trialling, in two regions, central regional bodies commissioning and providing care placements for looked-after children on behalf of their constituent local authorities.
• The family network pilot, which is testing providing extended families with funding to help children stay within the family network rather than go into care.

The government will announce further reforms to children’s social care when it delivers its spending review next spring. The review will set detailed plans for public spending from 2026 to 2030.