5.1 This research clearly demonstrates a significant gap in UASC funding. The results of the financial analysis above give an average cost to local authorities supporting UASC in their care as £55,194 per UASC per annum. By comparison with the weighted average Home Office reimbursement per UASC per annum of £30,231, a current funding shortfall to East Midlands local authorities of £24,963 per UASC per annum can be identified. In other words, present Home Office funding levels cover just over half (54.8%) of the costs incurred by local authorities in support of the current UASC cohort.
5.2 It should be noted that this approach assumes that the costs incurred by local authorities are, on average, equivalent for legacy and enhanced rate cases. However, whilst parity is assumed for the average costs, the funding shortfall between the two cohorts will be different due to the differing Home Office funding rates. Local authorities are required to submit separate UASC funding returns for their legacy, National Rate, and Kent Referrals UASC cohorts. Based on the demographics of UASC in the East Midlands in early 2017, the weighted average funding shortfall for legacy cases is calculated to be £27,387 per child per annum, whereas for each National Rate/Kent Referrals case, the weighted average shortfall per year is £19,570.
5.3 By providing enhanced funding tariffs for UASC arriving in the UK from 1st July 2016 or transferred through the NTS compared to ‘legacy’ case funding, the Government indicated that it “recognises the burden placed on local authorities as a result of the increase in numbers of UASC.”5 However, the significant financial burden which local authorities continue to incur in support of legacy cases is not recognised by these enhanced rates. It is not unreasonable to postulate that parity of funding across all UASC categories at the enhanced rate might support local authorities currently unable to participate in the NTS on funding grounds to review their decisions. Therefore, a request arises through this research for the rationale for different funding tariffs to be reconsidered.
5.4 Clearly, over time, the proportion of National Rate/Kent Referrals cases will increase, reducing the extent of the impact of the legacy funding shortfall. However, any financially beneficial effects of this will be likely to take some significant time to become appreciable: legacy cases comprise 69.0% of the current regional UASC cohort, with 21.6% of the legacy UASC cohort being under 16 years old. Moreover, this should be considered in the wider financial context discussed in this report, which overwhelmingly suggests an upwards pressure on costs. It is also important to recognise that local authorities will, in many cases, continue to have legal responsibility for legacy UASC as they become Care Leavers, for whom the current levels of funding are considered by local authorities to be a significant budgetary risk (see 4.18, below).
5.5 These results were based on a sample size of 299 unaccompanied migrant children and young people, which equates to a funding shortfall to the East Midlands of £7.46 million per year. Within this overall cohort, as at the end of March 2017, 85.3% were ‘spontaneous’ (or ‘clandestine’) arrivals within the East Midlands. Local authorities have a statutory duty of care for these UASC, which represent £6.36 million of the overall funding shortfall. National Transfer Scheme cases comprised 11.0% of the cohort (representing £0.82 million of the funding shortfall), and ‘Dubs’ cases (s.67 of the Immigration Act 2016) accounting for the remaining 3.7% of the total cohort (£0.28 million of the funding shortfall). Therefore, those local authorities within the region which are, or were previously, participating in the NTS and ‘Dubs’ arrangements are incurring a combined £1.1 million funding shortfall per annum through the voluntary participation in these schemes.
5.6 It should be noted that this shortfall is based on the full quantifiable costs to local authorities in supporting UASC, and includes certain local authority healthcare and education costs, both of which are currently excluded from Home Office UASC funding criteria (see Appendix C). However, these excluded costs combined equate to £4,097, and represent only 7.4% of the total identified costs. Indeed, the weighted average Home Office funding figure of £30,231 per UASC per annum does not fully cover the regional average placement costs alone (£40,850). As noted previously, the costs identified in this research do not include several unit costs that are included within Home Office funding guidelines, particularly finance salaries and premises costs. Although not included in the regional average calculated in this research, the Home Office’s current maximum level for premises costs are £1,095 per UASC per annum (Appendix C), which when combined with indicative finance officer costs (£309.00, see 3.4 above), add a further £1,404.00 to the overall actual costs.
5.23 In this context, the need for the provision of adequate funding levels to enable local authorities to ensure that they are able to provide suitable and sustainable support to meet the needs of UASC, some of the most vulnerable children and young people within society, has never been greater. Not only would increased funding levels assist in local authorities’ statutory responsibilities to support UASC arriving ‘spontaneously’ within their boundaries, but it would support the case for on-going voluntary participation in the National Transfer Scheme. All participating local authorities have identified costs as a risk factor in their continuing participation in the NTS13. Moreover, two local authorities within the East Midlands have identified present funding levels as a determinant factor in their current non-participation in the Scheme. If the NTS is to continue to expand to facilitate increasingly equitable distribution of UASC across the country, the case for funding levels which reflect the actual costs to local authorities in support of UASC, as well as former UASC Care Leavers, must surely be an urgent priority.