Potential innovation risks being hampered by inflexibility in the wider system of children’s social care. The Department intended the Innovation Programme to both improve outcomes for children in the social care system and produce savings. Residential care in children’s homes is especially expensive, while outcomes for children appear better for those supported in kinship settings. The Department intends its response to the Independent Review of Children’s Social Care to promote support for keeping children in kinship groups or foster care as preferred alternatives. However, we have seen many examples of local barriers to supporting children in these settings, including inflexibility around the costs required to accommodate children taken into kinship care or foster homes, and help around the work and lifestyle changes required to effectively support them. The local government funding system is not always good at adapting to these needs, which risks resulting in more expensive residential provision being required. Recommendation: The Department should work with the Department for Levelling Up, Housing & Communities and HM Treasury to develop plans for addressing the local funding boundaries and barriers that stop children getting the help they require.