One child’s social care placement cost Cambridgeshire County Council £85,000 a week, the authority’s chief executive has revealed.

Stephen Moir said the children’s social care market was “broken” and that providers had a “stranglehold” causing costs to increase.

The county council is currently predicting that it will spend £8.2million more than it had budgeted for on its children, education and families services.

This comes at a time when the authority is estimating it will face a £23million hole in its budget next year.

A report to the strategy, resources and performance committee this week (October 31) said a small number of high-cost placements for children was contributing to the overspend.

Mr Moir said the county council was currently spending £200,000 a week on providing care for six young people due to the nature of their high needs.

He highlighted one example where the authority had been paying £85,000 a week for just one child, because the support they needed required seven staff members just for them.

This placement has since been reviewed by officers, Mr Moir said, and they were now in a new regulated placement that costs £30,000 a week, but still met their needs.

Mr Moir said there was a “national market failure” for children’s social care. He said: “What do I mean by market failure?

“Well first of all we have the situation, slightly perverse if you ask me, that crisis placements for children and young people that need residential secure support for complex needs – particularly those that may have behavioural difficulties, mental health issues, or indeed maybe violent or aggressive as a result of their conditions – those placements continue to cost this council and exorbitant amount of money, because the national market is broken.

“We have six young people, because of the high acuity needs they have, costing this council currently £200,000 a week because of the nature of their placement needs.

“That is replicated across all upper tier local authorities in England.

“This is a substantial problem and we see that coming through in our financial reporting this year and indeed other county councils in our own network are in exactly the same place.

“This system is one that from a financial perspective and a delivery perspective is without doubt, in my view, in crisis nationally and something needs to be done to better support the people that we have a statutory duty to serve.”

Mr Moir said the county council was doing everything it could to manage the crisis placements to try and bring costs down while still meeting the needs of the young people.

However, he said central government had not taken opportunities to help improve the situation.

Mr Moir said the recommendations made by the independent MacAlister report into children’s social care had not been acted on by the government, which he said was “really quite concerning in terms of the impact on children”.

The MacAlister report said a “comprehensive reform programme” costing £2.6billion over four years was needed to “turn the tide and give children and their families what they need”.

The report said the current children’s social care system was on a “trajectory of rising costs” with more children being looked after and “continually poor outcomes for too many children”.

Mr Moir also said further constraints had been put in place by the government – highlighting the ban on using unregulated placements.

He said these placements should not have been used anyway, but said all upper tier authorities had used a “small number” of unregulated placements at times to cope with demand, however he said this route had now been closed.

Mr Moir said: “That has in my view strengthened the monopoly, or dare I say the stranglehold, that providers in the children’s social care residential market have, which has led to cost increases rather than cost management by government nationally.”

Mr Moir added that the Chancellor’s Autumn Statement did offer the government another opportunity to help address the situation.

Councillor Lucy Nethsingha, leader of the county council, said the costs being faced to provide children with appropriate social care placements was an “enormous risk” for the authority.

She said that there only needed to be a small number of children with high needs added to raise the costs even higher.