IMPOWER: The Way We Care

This study, produced by IMPOWER for the County Councils Network (CCN) examines escalating challenges in England’s children’s social care placements market, highlighting how rising demand, increasing complexity of need, and sharp cost inflation are creating an unsustainable system.  

This report argues that children’s services are now one of the biggest financial pressures on local authorities, with care placement costs rising faster than councils’ ability to fund them.  

Despite councils’ record spending, outcomes for children in care are not improving, demonstrating a fundamental mismatch between placement cost and effectiveness. The report identifies the root causes of the care placement market dysfunction and sets out a system‑wide programme of reforms – which it recommends should be adopted at both the national and local level to help alleviate these issues.

The report found that:

• Placement costs have risen dramatically, with spending on looked‑after children forecast to grow 82% between 2022–23 and 2029–30.  
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• Residential care usage has grown 45% since 2019, despite poorer average outcomes compared to family‑based care.  Unit costs for residential placements have increased 52%, reaching around £6,000 per week.  
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• There is no clear correlation between the needs of children and the prices charged, indicating a market not functioning as intended.  
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• Foster carer numbers are declining, creating over‑reliance on higher‑cost residential care.  
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• Councils face growing financial risk, with many unable to meet savings targets or manage demand increases.  

The study sets out recommendations:

• Government should invest £2.6bn nationally, as outlined by the Independent Review of Children’s Social Care, in early‑help and prevention to reduce entries into care.
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• Government should reform regulation and planning to expand residential capacity and reduce excessive profits. There needs to be a national reset on foster and kinship care recruitment and support.
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• Government could introduce a national needs‑and‑cost banding system to define value and ensure consistency.
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• Local authorities could consider develop long‑term strategic partnerships between councils, providers, health and education partners.
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• Council officers should embed needs‑led, strengths‑based reviews for all care placements to improve outcomes and reduce costs.