Nationally spending on children’s social care and services for young people has increased from £7.1bn in 2010-11 to an expected £10bn next year to meet demand, the analysis by the Association of North East Councils shows (see graph below).

At the start of this period councils were provided with £5.7bn from central government through the specific children’s formula, the early intervention grant and other grants, equivalent to 80% of overall spending. However, the analysis estimates cuts to central government funding means cash from Whitehall has reduced by almost half (49%) and now accounts for just £2.9bn, or 29% of overall spending.

This means councils have had to find an increasing amount of funding from other sources, including council tax, reserves, funding reductions from other services and the use of other income, such as business rate growth, Anec said.

The amount councils have contributed themselves has risen from £1.4bn in 2010-11 to an estimated £7.2bn next year, an increase of 414%.

Anec’s chief finance officer Paul Woods, who produced the analysis, said: “In simple terms to put it in context, a reduction in grant funding for children’s social care of around £2.7bn is equivalent to the amount that would be raised by holding a Children in Need appeal at least every week (£48m was raised last year).

“At the same time demand and costs have been rising by more than the cost of adult social care and councils are now having to fund around £7bn from local funding.  This is putting huge pressure on council’s budgets and other services.”

The research also illustrates the limited impact of the social care support grant, which was worth £420m in 2019-20, and the extra £1bn announced in the spending round for next year. Both funding streams could be spent on both adult and children’s social care.

If half of this was sent on children’s services, this extra money would be worth just 2% of the overall £9.7bn spent on children’s services this year and will cover 5% of projected spending next year.

Since 2010-11 there has also been a steep rise in the numbers of looked after children, with significant regional variation.

Nationally there were 54 children in care per 10,000 of the child population in 2010-11 compared to 65 in 2019, an increase of 20%.

The North East saw the biggest rate increase of 66% from 61 to 101, followed by the North West where the rate grew from 70 to 94 (34%).

However, rates of looked after children in London fell over the period, the only region to record a decline.

Inner London boroughs recorded a decrease from 76 to 56 (26%) while in outer London boroughs the rate fell from 53 to 46 (13%), according to government figures.

This compares to sharp rises in the proportion of looked after children elsewhere.

Mr Woods said the scale of the children’s social care challenge has not been widely recognised by the government, MPs or the public, with ministers focus on the relatively small amount of extra money being made available, rather than the dramatic reduction in grant funding over the last decade and the growing funding gap that councils are expected to meet.

The findings come as the government prepares to introduce a new funding formula for children’s services from April 2021 under the fair funding review.

In its response to the technical consultation on the 2020-21 local government finance settlement, Anec said changes in the distribution of need and spending pressures have not been reflected in the distribution of government funding since before 2014-15.

It added the association understands work to replace the current children’s social care needs formula under the fair funding review is almost complete.

“We expect that the results will also clearly show a significant difference in the distribution of need across the country compared with the current and out of date children’s social care [relative needs formula],” it said.

Commenting on the reduction in rates of looked after children in the capital, a London Councils spokesperson said the city has significant levels of deprivation and need.

They added: “In recent years London boroughs have invested a great deal in children’s services – particularly social work staffing.

“While London’s overall numbers are down, there is clear variation between the boroughs. London is also home to at least a third of all the unaccompanied asylum-seeking children in England, which brings a massive cost burden.

“Children’s services represent a key funding concern, with London boroughs currently overspending on children’s social care by more than £100 million.”

The Department for Education has been approached for comment.