Council plans to save £2.9 million by reducing costly children's care placements have been unsuccessful so far, councillors have been told.

Stoke-on-Trent City Council's budget for 2026/27 included proposals to reduce reliance on external residential placements for children in care through 'targeted step-down activity'.

But three months into the year the authority is predicting that none of this saving will be achieved – potentially meaning spending cuts will have to be made elsewhere.

The city council has more looked after children than most other authorities in the country, which has put it under huge financial strain in recent years.

While the number of children in care in Stoke-on-Trent has fallen over the last 12 months from 1,118 to 1,057, this has not yet translated into reduced spending on placements.

Members of the children and family services scrutiny committee were told that this was largely due to a shortage of foster carers in the city, meaning more children have to be placed with private sector providers, which have increased their charges.

Neil Macdonald, corporate director for children and family services, said that excessive 'profiteering' in the sector is a big problem for local government nationally.

He said: "We continue to look at whatever efficiencies we can make, and address the sufficiency challenges. But ultimately, our primary objective is to safeguard and protect children, and we have to be able to do that. That doesn't mean we're not working extremely hard to reduce spending.

"Ultimately the challenge we face is a national challenge. We can address part of it, but it also requires central government, including limiting profiteering in the private market. We're getting more and more examples nationally of individual children in care costing a million pounds a year."

Mr Macdonald said the council has various 'levers' to reduce spending on private sector placements, such as moving older teenagers into supported accommodation where appropriate.

He added that the authority is also keen to increase the use of 'kinship carers', where a child is placed with a member of their extended family.

This has the advantage of building on a pre-existing relationship, while also keeping the child in a family setting.

But Mr Macdonald explained that access to foster care remained the biggest challenge for the service.

Sarah Jane Colclough, cabinet member for children's services, said: "We're in challenging times. We just don't have sufficient capacity. The numbers have slightly reduced since this report was written. But there's still a long way to go."

Committee members quizzed Mr Macdonald on how the budget gap would be filled if the planned saving on external placements cannot be achieved.

Mr Macdonald said officers would continue to work on the budget proposal, as well as looking for other potential savings across the directorate.

He also told the committee that the main reason to cut use of external placements is to ensure better outcomes for children, rather than it simply being about saving money.

The city council has had to request more than £60 million of bailout loans from government over the past three years, mainly due to its high spending on children in care.