Spending by councils on supporting children in care has increased by around £1 billion a year over the past three years, according to new analysis from the Local Government Association (LGA).
The figures have prompted renewed calls for action to address shortages in care provision and tackle longstanding issues within the children's social care market, with councils urging the Government to ensure funding is focused on delivering high-quality support for vulnerable children and families.
Latest government data shows councils spent £9.5 billion supporting looked-after children during 2025/26, up from £6.6 billion in 2022/23. This represents an average annual increase of approximately £1 billion over the three-year period.
Even after accounting for inflation, spending has risen by 29.1 per cent, highlighting the scale of financial pressures facing local authorities.
The data also reveals a significant strain on council budgets, with authorities recording a cumulative £3.2 billion in-year overspend on children's services since 2022/23 as costs continue to escalate.
According to the LGA, soaring placement costs remain a key driver behind the increase. Previous research found that the number of children’s home placements costing £10,000 or more per week surged from 120 in 2018 to 1,500 in 2023.
The sharp rise is linked to growing complexity in children's care needs, a shortage of suitable placements, and ongoing challenges in commissioning specialist support.
Ahead of the Autumn Budget, councils are calling on the Government to provide sustainable long-term funding for children's social care that reflects growing demand and mounting cost pressures. The LGA is also urging ministers to develop a cross-government strategy for children, young people and families to ensure agencies are working towards shared outcomes.
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.”
Sector leaders argue that without meaningful reform and sufficient investment, councils will continue to struggle with rising care costs while attempting to provide the support vulnerable children need.
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