The bailout of independently-run Sandwell Children’s Trust, which last year predicted it would be £3.6m in the red by April, has been approved by new Sandwell Council leader Yvonne Davies.
The overspend comes despite the council allocating the service £58m last year – £13m more than was allocated in 2017/18 - and more than £220,000 being spent on staff bonuses.
Since April 2017, care numbers have increased by 50 per cent from just over 600 to more than 900 – which Ofsted has described as “the highest level ever experienced by the local authority”.
More than 200 of these children are victims of repeated attacks, while 85 are victims of sexual abuse or exploitation.
Chaired by former home secretary Jacqui Smith, Sandwell Children’s Trust was set up in April 2018 after responsibility was taken away from the directly-run council service following two inadequate ratings from Ofsted.
Earlier this year, Ofsted criticised the new service for delays which led to some children not being brought into care, while others who could be discharged remained in the system.
'Flawed business case'
Councillor Davies, who became council leader in May, said: “One of the first tasks I was faced with was agreeing an extra £5 million for the Children’s Trust, and you can imagine that would make me very, very nervous.
"The trust has gone through a number of difficulties, one of which was the flawed business case that was set out in the first place.”
The extra cash will come from reserves and will not affect other services, according to council chiefs who said the authority’s revenue budget "remains secure".
Councillor Davies said there needed to be greater emphasis on preventative measures which will help avoid the "last resort" of taking a child away from its family.
Saying changes in staffing and an underestimation of the numbers of children the trust had to cope with had contributed to the funding crisis, she added there would be more focus on earlier intervention but warned the responsibility finally rested with the council.
Councillor Davies said: “We will also have, from my point of view, a closer overview of where the finances are going and how the finances are being turned around.
"And, I think, that in two years time we will have a Children’s Trust that will be able to operate within the parameters it has set itself and by the council.
“But make no mistake, ultimately, if the trust fails it is the failure of the council.”