Nottingham City Council paying more than £18,000 a week for a single child in care as costs laid bare

Nottingham City Council has been paying more than £18,000 every week for the care of one child in care as costs in the sector continue to soar, it can be revealed. The Labour-led authority now spends around 70 per cent of its entire annual budget on social care for adults and children.

The majority of the money goes to private care companies because the council does not have enough care staff of its own. In November last year the council declared itself effectively bankrupt amid rising costs and a series of other serious financial problems.

The Special Interest Group of Municipal Authorities (SIGOMA) – which represents 48 local councils across the country – now says a significant rise in children’s services spending now means more councils could go effectively bust soon. A response to a Freedom of Information (FOI) request, submitted by the Local Democracy Reporting Service, shows this spending has been rising significantly in Nottingham.

In the 2023/24 financial year, up to March 31, 2024, the council spent £974,647 – more than £18,700 per week – on the care of a single child. The council paid a further £878,362, £833,999, £750,116 and £718,068 for the care of of four more children respectively the same year.

Figures exclude indirect, general council overheads such as HR, IT and finance costs, and excluded some home-to-school travel, interpreter fees and birth certificate costs. There are currently around 650 children in the care of the authority, and the average annual cost of a child in care has risen from over £80,000 to £101,976.

“The cost of care in general is driven by the private market, which for the most part is a money-making market,” says Cllr Cheryl Barnard (Lab), Executive Member for Children, Young People and Education. “We’ve got some not-for-profit organisations and a framework with other East Midlands councils to peg the price, but for the rest of it we are at the mercy of the market.”

Independent and private providers of children’s homes places – including for-profit firms – now account for 83 per cent of all places in England, according to a Competition & Markets Authority report, commissioned by the Government in 2021. It noted the largest private providers are making “materially higher profits and charging materially higher prices”.

In Nottingham, the FOI response shows the council paid out £61.485m to third-party and private care providers in 2023/24. In 2022/23 that figure was £44.990m, and £33.476m the year before.

The council’s agency staff spend has also increased from £3.895m to £4.926m, amid an ongoing struggle to employ sufficient numbers of workers. Cllr Barnard said the council is now caring for children with more complex needs, made worse by the Covid pandemic, and is working to bring costs down by getting more young people into foster care.

“Some children need to be in a home with round the clock, one-to-one care,” she said. “Sometimes that means there needs to be no other children in it, so we have to cover their costs for two or three beds in that home.

“What we have recently found is a lot of councils put unaccompanied asylum seeking children into Nottingham city. So we have got a high proportion of children from outside Nottingham. It’s because there are existing communities, support services, and young people want to be in an area where they feel they fit in.

“The more demand for places, the higher the prices will go. We have reduced the number of children in care by about 100 because we are doing a lot of transformation work. That is paying off.

“We have got a high number of older, teenagers, especially boys, and what we need to make sure is we are finding the right solutions so young children don’t remain in care until 18.” Terry Galloway, who grew up in care and today campaigns for change in the system, said the solution lies in designing public services to remove barriers, so all organisations can work together.

“Children come into care every day and at all times, so having capacity to meet this need, which is often unpredictable, is the most important thing,” he said."Costs spiral because of the many pinch-points and barriers. Then when children leave care we show up in some of the worst statistics, such as homelessness, and end up in a lot of high-cost services.”

The Labour Government has announced a number of measures to support children’s social care in its Autumn Budget at the end of October. Chancellor Rachel Reeves committed to spending £250m in 2025/26 to “continue to test innovative measures to support children and reduce costs for local authorities”, including £44m to pilot a Kinship scheme and create hundreds of new foster placements.

The Government also says it has plans for “fundamental reform of the children’s social care market”.