County and rural councils across England are receiving just a third of the government funding for children's services compared with councils covering major towns and cities, according to new analysis from the County Councils Network.
The findings come as local authorities face growing demand for children's social care, rising placement costs and increasing pressure to deliver government reforms aimed at improving outcomes for vulnerable young people.
The CCN's analysis shows county and rural unitary authorities receive £339 per child for children's services in 2025/26, compared with £1,011 per child for metropolitan borough councils serving large urban areas across the North and West Midlands.
Council leaders argue the disparity has widened following the introduction of the government's Fair Funding Review 2.0, which redistributed resources away from many county areas towards larger urban authorities.
Despite government ambitions to reform children's social care through early intervention and family support, county authorities say they are increasingly being forced to prioritise crisis services over prevention.
Even when council tax income is taken into account, metropolitan councils are still able to spend 73% more per child on children's services than county and rural unitary authorities, the report found.
The CCN warns that demand for children's social care is increasing rapidly across rural England, placing significant financial strain on local authorities.
Its analysis forecasts that county and rural unitary councils will spend £4.3 billion more annually on children's services by 2030/31 compared with current expenditure levels. This represents the largest projected increase of any council type in England.
At the same time, nearly 31,000 children are currently in care in county and rural areas, accounting for 38% of all looked-after children in England. While numbers have continued to rise in county authorities over the past five years, councils serving major towns and cities have seen a slight decline.
A shortage of suitable local placements is also creating challenges. More than one in five children in care in county areas are now being placed outside their home county and at least 20 miles away from where they live.
The proportion of children requiring these distant placements has increased from 15% in 2015/16 to 22% in 2024/25, largely due to a lack of available local children's homes and foster care placements.
The report highlights a significant shift in council spending over the past decade, with resources increasingly directed towards statutory care services.
County and rural unitary authorities spent £231 million on preventative services such as Sure Start centres and family support programmes ten years ago. By 2025, that figure had fallen to £142 million, representing a 39% reduction.
Meanwhile, spending on looked-after children and crisis intervention services has risen dramatically, increasing by £2.1 billion over the same period, a rise of 147%.
In contrast, metropolitan borough councils have largely maintained expenditure on preventative services while experiencing comparatively lower increases in crisis care spending.
The CCN argues this trend risks creating a damaging cycle in which councils have fewer resources available to support families early, resulting in more children requiring expensive intervention later.
The findings come as government presses ahead with reforms designed to improve early intervention and reduce pressures on children's social care systems.
Measures introduced under previous administrations, including Family Hubs and Regional Care Co-operatives, were intended to provide support earlier and reduce the number of families reaching crisis point. New legislation aimed at limiting excessive profits among private care providers is also expected to be implemented in the coming year.
However, the CCN argues county councils are being asked to deliver these reforms despite receiving reduced levels of government support.
The organisation is calling on ministers to restore "remoteness" funding within local government finance formulas. The factor previously recognised the additional costs associated with delivering services across large and sparsely populated rural areas but was removed from funding calculations.
County leaders argue that rural and coastal communities face unique challenges and that government funding arrangements should better reflect those realities.
The network is also urging ministers to ensure future local government reorganisation does not fragment children's services further, warning that structural changes could increase financial pressures and service delivery challenges.
Cllr Steven Broadbent, Finance Spokesperson for the County Councils Network, said:
“Children’s social care cannot be treated as an urban problem alone. Over the last decade, the costs and numbers of children in local authority care in county and rural areas has soared, forcing those councils to divert money from prevention into children who have reached crisis point and are in local authority care.
“That task has been made much harder after the government redistributed money away from counties to urban areas, leaving many county and rural councils with less government funding at a time of major reform to the system. Ministers are asking us to successfully try to implement these reforms when the numbers of children requiring services continues to rise exponentially.
“The new administration in government must press ahead with these vital reforms, which will create a better system. But ministers must also change tack from their predecessors and provide extra funding for county and rural counties in the Autumn Budget, allowing us to intervene early, prevent families from reaching crisis point, and provide good quality care for vulnerable young people. A child in need in a rural and county area is no less deserving than a child in a metropolitan city area.”
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