Costs of Supporting Children in Care Rise by £1 Billion a Year

Spending on providing support for children in care is rising at a rate of £1 billion a year, according to new analysis by the Local Government Association.

The findings have renewed calls by councils to tackle the shortage of provision and address systemic problems in the market, ensuring children’s social care funding is focussed on high quality care and support for children and families.

Councils spent £9.5 billion on support for looked after children in 2025/26, compared to £6.6 billion in 2022/23, according to latest government data – an annual average increase of roughly £1 billion over the three years from 2022/23.

Adjusting for inflation, council spend has increased by almost a third (29.1 per cent) in this period.

The pressure on council budgets is also made clear by the continued presence of in-year overspends – a cumulative £3.2 billion overspend over this period – as councils have been hit with escalating in-year costs.

The LGA says the figures are largely a result of astronomical care costs. Previous research by the LGA found the number of children’s home placements costing £10,000 or more per week increased from 120 to 1,500 between 2018 and 2023.

High care costs are driven by the increasing complexity of children’s needs and the lack of appropriate homes for these children, and the challenges of commissioning placements.

Ahead of the Autumn Budget, the LGA, which represents councils, is calling on the Government to deliver long-term adequate funding for children’s social care that addresses increasing demand and cost pressures.

It should also develop a cross-government strategy for children, young people and families to ensure all partners are working towards a shared ambition.

Cllr Natalie Oliver, Chair of the LGA’s Children, Young People and Families Committee, said: “Every child deserves the support they need to thrive and flourish in life.
“However these figures highlight the stark financial pressures on councils to provide this vital support.

“It is crucial that the Government’s current reforms to the market for children’s placements deliver real and sustainable change, and that it adequately funds children’s services in the Autumn Budget.

“We also need to see genuine investment in early intervention and prevention, including health services, as this can make a huge difference and prevent children and families from reaching crisis later on.”