It is calling for emergency funds to protect the support of vulnerable children

The Chancellor has been urged to provide emergency funding to protect critical services after it emerged that the share of council budgets spent on protecting vulnerable children has risen, with funding in some of the poorest areas more than doubling in the past decade.

Amid warnings about the financial viability of many councils, research by the Local Authorities Special Interest Group (Sigoma), which represents 47 councils in the north, midlands and south coast, highlights the risks of rising costs and demand for support.

Sigoma's analysis, based on government data and released exclusively to the PA news agency, found its members now spend an average of 29% of their core spending power on children's services, up from 15% in 2011/12.

While all upper tier councils have experienced increases in demand and costs associated with children's social care, the proportion of resources spent on services varies across areas with different levels of deprivation.

All councils with social care responsibilities in England spent an average of 27% of their budgets this year compared to 14% in 2011/12.

However, Blackpool council, which serves the most deprived local authority in the country, has tripled its spending on children's services, from 15% of its funds to 45% over the period.

The figures come as the number of children looked after by councils continues to rise to record levels, with 83,840 in care in March. This is a 42% increase since 2001 and a 30% increase since 2010.

The rising cost of children's services is a key driver of financial struggles across local government.

Recently, one in five Sigoma members said they were considering following councils, including Birmingham and Croydon, in issuing a Section 114 notice declaring actual bankruptcy next year.

The market for home support is dominated by private firms that command large and rising fees, with some specialist placements for the most vulnerable children commissioned by Sigoma members costing up to £1m a year.

Meanwhile, the rising cost of placements is leading to an expected combined overspend of £160m by London councils on children's social care this year.

Calling on Chancellor Jeremy Hunt to provide emergency funding for children's services this year and next, Sigoma chairman Sir Stephen Houghton, who is Labor leader of Barnsley Council, said the market was “broken”.

He said: “As more and more funding is spent on social care, there is less funding for preventative services that can save money in the long term and the other services that residents value most.

“These demand pressures are leaving councils financially stretched and at breaking point. The King's Speech earlier this month gave no confidence or reassurance as to how councils can be helped out of this desperate situation.

“The Autumn Statement is one of the last opportunities to give our members the support they need for the coming year and we urge the Chancellor not to miss this opportunity by providing additional funding for children's services.”

Jim Hobson, Blackpool's Labor cabinet member for children's services, said the Government would face a crisis in critical services if it did not act soon.

He said: “Since the government started cutting funding to local authorities and particularly those facing significant deprivation challenges like Blackpool, balancing the books has been difficult.

“Each year we are expected to save tens of millions of pounds without any reduction in demand for our most important services, such as children's and adult social care.

“The government really needs to wake up to these challenges and stop pretending that the number of local authorities issuing a section 114 notice is just down to bad luck or bad management. A fair funding approach is long overdue and now a matter of urgency.”

The government really needs to wake up to these challenges and stop pretending that the number of local authorities that have issued a section 114 notice is just down to bad luck or bad management

Blackpool Cabinet Member Jim Hobson

Mike Short, head of local government at trade union Unison, said the pressure on social care staff due to rising demand was compounding the financial challenges.

He said: “Children's social care is complex, important work that provides a lifeline for a generation. But the overwhelming pressure on staff means there are huge levels of vacancies, with local authorities relying on expensive agencies to fill the gaps.

“The Chancellor must provide significant extra funding to all councils to deal with these costs, without forcing cuts elsewhere, so that children get the support they need.”

The government has been approached for comment.