What DCSs can learn from Steve Carell and “The Big Short”
The financial backdrop to the 2008 crisis and the rising SEN debts looks remarkably similar – and may offer lessons
The challenges of SEN will be familiar to anyone working in children’s services – demand has doubled in 8 years, Councils, Children and Families are set-up for conflict within a combative legal system that rewards families with resources to challenge and underrepresents children without advocates to speak for them. Local Authorities have largely been left to attempt to absorb the challenge alone, at a time where cost pressures across all council departments are stark.
Wall Street Traders and Directors of Children’s services may have fundamentally different values and goals, yet the underlying challenge is remarkably similar – how to deploy resources in the context of wider system failings. This is not just a question of resources, it’s a question of perverse incentives, short-term financial sticky tape and ultimately – poor outcomes for recipients of the services. Whereas Steve Carell’s character was concerned with jobs, pensions and the lives of “ordinary people”, DCSs must consider the impact to the most vulnerable people in society; children of families with complex needs.
Just as reckless financial innovation led estate agents to issue the risky NINJA loans (No Income, No Job, no Assets) that collapsed the financial system, councils are forced to use the “Statutory Override”, which hides SEN debts off council balance sheets. SEN provision drives High Needs Block (HNB) costs, which are legally held off the books by being markedas “allocated reserves” by accountants. While this enables councils to maintain spending levels on other services – it hides the growing problem.
In reality, this “unallocated reserve” has already been spent. If the council doesn’t have the cash to fund the spending, it must borrow, which incurs interest payments. Last year alone, Norfolk council spent £7m last year on the interest payments for it’s HNB debts. The announcement that 90% of outstanding debt will be paid off by the government is positiveand solves the short-term financial challenge – but does nothing to address the underlying budgetary pressure.
So what can be done?
Here perhaps, Steve Carell can help. If the system is not functioning, skip the noise and speak to those on the frontline of the services. The defining moment of Steve’s journey in The Big Short comes when speaking to an exotic dancer, discussing her two mortgages on her one house. As the story unfolds it is revealed she owns 5 houses… and a condo.
It was this insight that enables Steve to place his “Big Short” – cutting through system noise and considering what is fundamentally happening in the system. For Steve, it was housing debt. For DCSs, it’s effectively and efficiently identifying and preventing escalations in the needs of vulnerable children.
Early indications suggest the white paper will remove the binary EHCP / No-EHCP outcome for students and create a 4-tier system based on scaled levels of need. This will change how demand is managed, but won’t change the fundamentals we are seeing on the ground in councils across the UK:
Cost-effective digital tools drive human-centric conversations and address underlying service pressures right now.
Just as in “The Big Short”, addressing the challenges faced by Children’s services will require a combination of creativity, collaboration and a deep understanding of what really drives system pressure.
Come and join the conversation.
TVI supports councils to cut through the system noise and meaningfully invest in low cost, early help initiatives that improve outcomes for children and young people and create a sustainable financial platform. If you’d like to discuss some of the proposed solutions in this article further, please contact henry.stgeorge@triplevalueimpact.com
