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ITEM EX8

EXECUTIVE – 1 OCTOBER 2002

ALLOWANCES FOR CHILDREN LIVING AWAY FROM HOME

Report by Interim Director of Social Services

1. Currently, Oxfordshire has 430 local children in the looked after system, with a further 36 children looked after who are unaccompanied minors (asylum seekers). Although the number of local children in the looked after system has been slowly reducing over recent years (from 478 in 1999), the children themselves are not a static population. Each year, there are approximately 100 admissions to and 100 discharges from the looked after system. Some children are able to return home, sometimes after only a short period of being looked after. For others, long term plans can include adoption or care by a foster carer or relative outside the looked after system, but endorsed by the Court through a Residence Order. In order to facilitate increasing numbers of discharges from the looked after system in this way, the authority has arrangements to pay adoption allowances according to the provisions of the regulations, and also Residence Order allowances according to local policy guidelines.
2. Our success in discharging children from the looked after system in this way means that increasing numbers of these allowances are being paid, and these are creating a pressure on the budget. It also means that those that are left in the looked after system have greater needs. This will be analysed further in the following report.
3. For those children that remain in the looked after system 70% live in foster homes. With increasing demands placed upon foster carers to raise standards of care, with the children concerned presenting increasing levels of difficulty, and with private independent fostering agencies (IFAs) offering considerably higher levels of payment, many foster carers see themselves as offering a service for which an element of remuneration is appropriate. Oxfordshire’s position is that it now pays less than the National Fostering Network’s recommended rates to its carers. Some Councils and the IFAs are developing and paying allowances above the National Fostering Network’s recommended rate to retain existing carers and to recruit new carers.
4. This report identifies the need to raise the maintenance allowance for foster carers to bring these up to the agreed National Fostering Network recommended rates, and also outlines the current system of Adoption and Residence Order Allowances and their implications in terms of the benefits for the children and the cost to the Authority.

Adoption Allowances

5. These were originally introduced by the Adoption Act in 1976, but have subsequently been amended by new regulations as part of the Children Act provisions in 1991.
6. It was recognised that there were some prospective adopters who would be available to care permanently for children who were in long term foster care or residential care, but who were prevented from coming forward because of their financial circumstances. The provisions of the Adoption Allowances regulations are that where adoption is in the best interests of the child, where the adopters are judged to be able to provide appropriate permanent care for that particular child, and where their financial position would prevent them from so doing, then local authorities are able to assist by way of an allowance. It is subject to means testing through the Income and Assessment Section of the Social Services Department and the Department’s contribution is re-assessed each year. It is paid at a lower level than fostering allowances and adopters are able to claim Child Benefit for any adopted child, which is not the case with children who are fostered.

The Benefits of the Adoption Allowance Scheme

7. The Adoption Allowance Scheme has clearly enabled the local authority to place children in adoptive families where this opportunity would otherwise be denied to them. Some adopters are of very limited income. Some foster carers who adopt their foster children have the demands of other children in the family to meet. Some adopters take on three, or even four, siblings at a time with the financial liability this involves. The Government has been very clear about its view on the advantages for individual children of an adoptive home, citing research on improvement outcomes across emotional attachment, social integration, educational achievement, and self esteem. For the local authority, the alternatives to placing children in adoptive homes are usually that the child remains in long term foster care or in residential care. The costs of this arrangement to the authority include the direct cost of the fostering allowances or the residential unit, but also the indirect cost of ongoing staff time to support the carers, to visit the child, to undertake statutory reviews, and visits to the child on a regular basis through his/her childhood.
8. In addition, the Government’s attention and research into issues affecting children in long term foster care has demonstrated that many of these children lack a sense of belonging and identity, which is detrimental to their emotional development. It is therefore both in the best interests of the child, but also economically a better outcome for the County Council, to promote adoption and where appropriate, to support this financially.

Numbers of Adoption Allowances

9. Over the past ten years, the numbers of Adoption Allowances paid for children in adoptive families has increased from 15 in 1992 to 85 in 2002 (for details see Annex 1). Because of our increasing focus on adoption and increasing numbers of children being adopted from the looked after system, the number of new allowances each year is in excess of allowances ending because the child has reached the age of financial independence, or 18 years, whichever is the sooner. The numbers of Adoption Allowances predicted to end in the next three years is seven (for details see Annex 2).

Budgetary Implications

10. This presents ongoing pressure on the Adoption Allowances budget. As a result of the budget activity analysis in early 2002, the budget for Adoption Allowances was increased from £209,000 to £307,800 for the financial year 2002/03. However, the predicted cost of the 85 allowances already in place is in excess of this budget at £318,000 for this financial year. The average Adoption Allowance paid is £72 per child per week. This is significantly less than a fostering allowance, which will be in excess of £100 for all children, rising to £160 for those who are 16 and 17 years of age.

Residence Order Allowances

11. Increasingly, as the Department looks to promote kinship care, the care of young people by extended family, the Department is able to identify relatives as long term carers for children who cannot remain with their own birth parents, or whose birth parents are not able to parent them appropriately.
12. In other cases, foster carers may seek to demonstrate their attachment and commitment to their foster children by looking for a more legally secure arrangement, whereby the child might remain with them but without the finality of adoption, which some older children find difficult to accept, and which is not always appropriate. In such cases, the Department is able to assist by way of a Residence Order Allowance. For foster carers, this represents a decrease in income that would previously have been made available through the fostering allowance scheme but does continue to provide for the child’s needs, and therefore the foster carer is not financially disadvantaged by the fact of the child leaving the looked after system. For relatives, the authority can make an allowance where it would not otherwise be possible for them to care for the child concerned. Currently, Oxfordshire pays this allowance at a lower rate than that which it pays to foster carers, but it still aims to ensure that care by extended family is promoted and supported in circumstances where the child(ren) would otherwise need a placement with stranger foster carers.

Benefits of Residence Order Allowances

13. The arguments for supporting Residence Orders are similar to the arguments in favour of supporting adoptive placements. The economic arguments are similarly advantageous to the County Council. The issues for the child of having more legal security to their placement, and carers, who demonstrate a clear attachment and commitment to them, enabling them to be cared for outside the looked after system, represent a move in the child’s best interests.

Numbers of Residence Order Allowances

14. As policy and practice has led staff to seek to increase the number of placements made with extended families, so the number of Residence Order Allowances is increasing. Oxfordshire’s policy on this issue was revised in 1997, and the number of allowances payable has risen to 51. Due to the number of children in the looked after system who are currently placed with relatives, which is approximately 10% of the total of children currently looked after, this number is expected to increase.

Budget Implications

15. The Residence Order Allowance budget for the financial year 2001/02 was £110,000 and as a result of the activity analysis in early 2002, this budget has been increased for the financial year 2002/03 to £155,000.
16. The age profile of the children in respect of whom Residence Orders are made and allowances paid, is increasing because of the use of this option. Numbers who are reaching the age when the allowance will no longer be payable are quite small over the next few years, and will be seven in the next three years (for details see Annex 3).
17. Currently, the average Residence Order Allowance paid to a foster carer who seeks a Residence Order is £75 per child per week. For a relative who takes on the permanent care of a family member as an alternative to the child being looked after, the current average payment is £50 per week. The cost of the allowances that we are currently paying comes to £168,000 for this financial year, which is in excess of the budget at £155,000 and does not take account of any new Residence Order Allowances which may be made this year.

Summary

18. For children to leave the looked after system to become adopted or subject to a Residence Order operates in their best interests, given that such an outcome will only be sought where the local authority has judged it meets the needs of the individual child. The costs of meeting these children’s needs through a supported Adoption or Residence Order placement are significantly less than the ongoing costs of maintaining the child in the looked after system. It is these policies and strategies which have enabled the authority to be successful in reducing the numbers of children looked after.
19. The costs therefore represent a better situation than if the children were to remain looked after. It is also the case that the numbers in the looked after system, and the number of new entrants, are such that this reduction in the numbers of children looked after does not offset the costs of the increasing numbers of Adoption and Residence Order Allowances. It is anticipated that this will be an ongoing pressure on the budget, and given the small numbers of older children currently receiving Adoption and Residence Order Allowances, this will continue to be a pressure for some years to come. It is anticipated that the growth rate in these allowances is in the region of 15 Adoption Allowances and 10 Residence Order Allowances per annum.

Fostering Allowances

20. Fostering Allowances in Oxfordshire have until April 2002 kept pace with the National Fostering Network’s recommended rates. The allowance has two elements; a maintenance allowance payable to all carers and an additional payment to carers fostering children not previously known to them. This is in recognition that there are additional responsibilities and expense in caring for children in this case. For example the child may present challenging behaviour because of their unique circumstances. The additional allowance payment is for carers taking children, and on occasions a succession of children, outside their friends and family network.
21. The maintenance allowance referred to, has fallen behind the National Fostering Network’s recommended rates. This is particularly worrying in a climate where foster carer numbers are not being sustained to meet demand for placements. The development of IFAs who pay carers from £350 to £550 per week, and charge Local Authorities £700+ per week for the placement, is creating greater competition in this service. For example in Oxfordshire the allowance rate for a child aged 16 years plus is approximately £163 per week. This is made up of two elements: basic maintenance allowance £131 per week and an additional allowance of £32 for the task of taking a child not previously known to the carer.
22. The total budget for fostering allowances for 2002-03 is £3,365,000, and the current projection for this financial year is an overspend of £26,127. This overspend relates to current Oxfordshire Foster Care Allowances. As previously indicated Oxfordshire’s current allowance rate for a child 16 years plus is £163 per week. The National Fostering Networks recommended rate, introduced in April 2002, recommends an allowance rate of £187 per week. This represents a different of £24 per week for a child 16 years plus.
23. On the basis of our current looked after population, and children placed with foster carers and kinship carers, it is estimated the Fostering Budget should be increased by approximately £67,000 to enable the authority to pay the current National Fostering Network allowance rates to carers. This increase would bring all allowances/rates to the National Fostering Network’s recommended levels. As indicated earlier some authorities have increased their allowance/rates beyond the National Fostering Network rates as part of their recruitment and retention strategies.
24. During the 1990’s Oxfordshire paid the National Fostering Network recommended rates plus 25%. Because of the Council’s challenging budget position, this has been eroded over the past few years, to the current position of paying less than the National Fostering Network’s recommended rate.

RECOMMENDATIONS

25. The Executive is RECOMMENDED to:

1. note the contents of the report;
2. endorse the strategy currently followed by the Social Services Department with regard to the support of children in families;
3. note that the findings pressures in this area exceed the current level of budget provision.

STEPHEN WILDS
Interim Director of Social Services

Background Papers: Nil

September 2002

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