Hackney children’s service £3.3m funding black hole revealed

Hackney's Mayor has responded to The Chancellor's spending review in the wake of the coronavirus pandemic. Picture...

Hackney's finance chief has warned vulnerable youngsters could be moved out of residential placements in a bid to cut costs. - Credit: PA

The spending of Hackney’s cash-strapped children’s service is “not sustainable”, its own finance boss has admitted.

Residential care homes charging £200k-a-head, a £2.9m hiring drive, and unexpected pandemic costs saw the council department go £3.3m over budget last year.

Children’s service finance director Naeem Ahmed told councillors that the total overspend would have exceeded £10m had £7m cash reserves not be used.

Speaking to the children and young people scrutiny commission (CYPSC), he warned vulnerable youngsters could be moved out of full-time residential placements in a bid to cut costs.

He revealed an estimated 40 children are currently in full-time placements  and complained that the council is “at the mercy” of providers charging up to £200k-a-year per child.


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He said: “I think there are approximately 40 children in a residential setting, which obviously has a significant cost pressure to the service.

“Something that we’ve been looking at forensically is to try to understand why those children were in care, and if any steps can be taken to step them down into other settings."

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Mr Ahmed said the service is reviewing a reduction in high-cost placements as part of a budget review meeting, attributing the high cost to the small size of the market.

The low number of residential care homes around the UK means Hackney is forced to send kids far outside of the borough to get them support – with CYPSC chair Cllr Sophie Conway revealing that she’s heard of children being sent to “Wales or Cheshire, or Liverpool”.

She added: “Every time I hear that figure of £200k it is so painful. Many of the issues they experience are poverty, and we could buy them a home for that price.

“We’re putting them in temporary accommodation for years and years and the impact of poverty, only to then spend £200,000 to put their children in care after the full impact of the devastation of poverty."

Children’s service director Annie Coyle agreed that it was important to keep children safe and protected. 

But she warned that the needs of each child sent to residential care are “highly complex” – and said the council is forced to fish in a “very small pond” when looking for residential care homes.

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