The second edition of this annual publication surveys the impact of spending changes during the period 2011-12 on those who engage with Action for Children's services and considers this in the light of significant research which has taken place over the same period. The Red Book 2012 outlines the policy context within which Action for Children are working. The report recognises the coalition government’s wider policy objectives that aim to support early intervention, reduce the number of troubled families, tackle youth unemployment and increase social mobility and considers how these policies are being implemented at a local level. Alternative policies are explored, underpinned by long-term sustainable funding streams, that could enable the shift to early intervention. The report shows that there has been a sharp increase in children and families facing more severe problems than they were at this time last year and calls for a transformation in children’s services that can weather political change and can provide greater protection for society’s most vulnerable citizens in bad economic times as well as good.