Can strict budget adherence influence child protection decisions?
Strict public regulations to reduce budget overruns may leave local governments with a potential trade-off between adhering to fiscal budgets and supplying critical welfare services like programs to protect vulnerable children.
Governments all over the world struggle to curb public expenditure. Tight budgets combined with severe economic sanctions for budget overruns have led to fiscal restraint at the local administrative level across all domains of public services in the last decade.
Budgetary austerity has in some countries, like Denmark, led to improvements of public budgets, providing the foundation for a reserve buffer. An important part of public budget savings can be ascribed to budget reductions at the regional and municipal level, as a substantial proportion of public budgets are delegated to local government levels. However, imposing strict budget adherence can leave local governments with a trade-off between providing critical services such as child protection and overrunning the budget.
In new research published in PLOS ONE Petra Gram Cavalca, Mette Ejrnæs, and Mette Gørtz investigate the trade-off between budget adherence and supplying child protections in Danish municipalities. The analyses investigates if budgetary constraints influence child protection decisions using high-quality register data.
The results show that the introduction of fiscal sanctions to improve budget adherence contributed to a sharp decline in budget overruns on child protective services by reducing the number of children in out-of-home care. The results suggest that a budget overrun of 10 percentage points by mid-year leads to a 1.2 percent reduction in the number of children in care over the remaining part of the fiscal year.
Municipalities reduced child protection expenditure by choosing cheaper types of care and ending placement for children in out-of-home care, particularly for children turning 18.
The research highlights that enforcing strict budget adherence may be in conflict with social policy goals. The research raises an important discussion about centralization versus delegation of critical public services.
“Trading off fiscal budget adherence and child protection” by Petra Gram Cavalca, Mette Ejrnæs and Mette Gørtz is published in PLOS ONE and available from Thursday March 24, 2022.