The cost of inaction in the children's social care sector
The UK’s leading children’s charities (Action for Children, Barnardo’s, The Children’s Society, the NSPCC and the National Children’s Bureau) recently commissioned Alma Economics to compare the costs and benefits of the government’s strategy for reform of the children’s social care sector in England with the recommendations proposed by the Independent Review of Children’s Social Care.
The background
In 2019, the government committed to reviewing the children’s social care system in England to make sure children and young people get the support they need. The resulting Independent Review of Children’s Social Care (the “Care Review”) was a major undertaking conducted between January 2021 and May 2022, chaired by Josh MacAlister. Alma Economics contributed to this review, modelling the costs and benefits of potential reforms.
In May 2022, the Care Review published its final list of recommendations, calling for urgent national reform of the sector and investment of £2.6 billion in new spending over four years.
In February 2023, the government published an alternative vision, the Stable Homes, Built on Love strategy. This laid out a plan of smaller scope with new approaches being tested in a limited number of local authorities (up to 12) over the next two years, supported by a £200 million investment.
Alma’s cost-benefit analysis of the new strategy
Our team first conducted a thorough review of the government’s actions and policy commitments since the completion of the Care Review. These changes were then incorporated into the cost-benefit analysis (CBA) models we developed for the Care Review. By adjusting key parameters and assumptions, our researchers estimated the cost of delayed or limited action for all recommendations mentioned in the government’s strategy across two key policy scenarios: (i) delayed implementation, where the government implements certain Care Review recommendations from 2025/26 onwards; and (ii) no further action, under which the government takes no further action after two years of the Stable Homes, Built on Love strategy (business-as-usual). These policy scenarios were developed in close collaboration with the charities, leveraging valuable insights from child social care experts.
Our researchers concluded that under the first policy scenario, the government’s plan will cost an additional £200 million per year over the long run compared to full implementation of the recommendations of the Care Review. These additional costs would arise due to the two-year delay in a national roll-out of reforms and the reduced scope of these reforms compared to those recommended by the Care Review. Under the alternative business-as-usual policy scenario, the cost would be an additional £970 million per year, compared to full implementation of the Care Review’s recommendations; this would mean that over the next twenty years, the government would have to pay a total of £14 billion more for children’s social care in England.
Our research was featured on UK national television, available here.