A cash-strapped council in the south is having to pay out more than £1m to private agencies because it does not have enough foster families on its books.

There has been a six per cent rise in the number of children in the city being taken into care which has used up all available placements with Southampton City Council's own foster families.

The influx of new cases has meant the authority has had no alternative but to pay private agencies to provide suitable families, said social services director Dr John Beer.

A child placed with a council foster family costs £4,000 a year per child but with a private agency the charge can be as high a £31,000 a year per youngster.

The council currently has 35 youngsters being cared for by private agencies, according to a report in the Southern Daily Echo.

Dr Beer said the council had orginally planned to reduce the numbers of children in care but instead of going down, they went up.

"About February of this year we ran out of our own foster carers and we found it hard to recruit more, so we had to start using private agencies and that requires very significant levels of support," he told the Echo.

The council has agreed to give social services an extra £1.5m a year to help tackle this year's £3.5m overspend. It has also given the department an extra one-off payment of £2m from reserves.

Overall, the council is said to be facing debts of up to £22m next year and the outlook for social services in 2001/2002 is bleak with a predicted shortfall of £4.6m.

The cause of the overspend has been blamed on insufficient Government funding and a spokesman for the council said the authority was in no different position than many social services departments up and down the country.

"In common with almost every other local authority, pressures on the city council's finances are severe. Again in common with other similar authorities, the greatest cause of this is the demand on social services, which is outside the control of the council."

The spokesman added: "The revenue pressures relate to social services and job evaluation and range from an estimated £7m to £10m from next year. The council is currently considering ways to close this gap. The council has not tried to hide this and has previously released information explaining this situation."