TORONTO - Premier Dalton McGuinty promised to work with struggling Children's Aid Societies to deal with what he acknowledged were real funding issues Wednesday, after 11 agencies took the desperate step of going to court to ensure vulnerable children aren't being put at risk.

The premier acknowledged there was a "real issue" when it comes to funding the agencies, and questioned why the challenges persist despite increased government funding and a drop in the number of children in care.

"Both sides agree there's an issue, I'm not sure we agree in terms of where the answer's going to be found, but we're not taking our eye off that ball, we know there's a real issue here," McGuinty said.

The Ministry of Children and Youth Services is looking into the problem, he added, and has asked for advice on how to resolve it.

Jeanette Lewis of the Association of Children's Aid Societies said the agencies didn't make the decision to ask for the judicial review lightly, but noted the step was needed to ensure proper care.

It's true that fewer kids fall under the care of the CAS, she said, but that's only because they are increasingly being placed with relatives following an government overhaul.

That arrangement, she said, still requires funding.

"The funding formula wasn't designed so much to work in the current system that was put in place by the government," Lewis said.

"It's those costs that are not really being accounted for."

Last year, Children's Aid Societies had a $32.5-million shortfall, forcing boards of directors to use lines of credit or delay payments to vendors to fund a required service. Several branches have also laid off staff.

Last fall, 37 CASs requested a formal ministerial review of their budgets. Many agencies have also sought budget reviews and repeatedly lobbied the government for ways to deal with the funding shortfalls.

Lewis said CASs are very much aware of the economic pressures that Ontario is under, but at the same time, now is the time when the agencies' services are needed most.

"People who were laid off from manufacturing jobs are now exhausting their EI benefits and are turning to other sources of income, possibly Ontario Works," she said.

"This increases the family stress, it leads to a lot of parenting issues, often it leads to child neglect or the risk of abuse."

Minister of Children and Youth Services Laurel Broten said the agencies were within their rights to launch the legal challenge, but noted the province was already in talks with the various CASs about how to keep them on solid footing.

"Some Children's Aid Societies maybe need to look at the partners that they could work with in their communities: Do they exclusively have to do all of the work that they're doing, could they partner with Children's Mental Health, could they partner with folks that are experts in developing parenting programs," she said.

"That's much of the work that we're doing in examining the world of better streamlining services."

The government's key priority, Broten added, is protecting children, and it will do all it can to make sure they're not put at risk.

NDP Leader Andrea Horwath said there was no doubt the safety of children was being compromised, calling the "entire mess" a direct result of the government's own actions.

"They changed the mandate of CASs several years ago, they transformed children services in this province, but they refused to recognize that that transformation was going to cost some money," she said.

The services required of the agencies are labour intensive, Horwath said, and include things like counselling and the provision of clothes and food.

"We don't want our most vulnerable children abandoned in the street, and that's why we have to provide those services, and that's in fact why they're mandated by law," Horwath said.

The 11 agencies seeking the court review are in Brant, Chatham-Kent, Durham, St. Thomas and Elgin, Kingston, Haldimand and Norfolk, Huron Perth, Oxford County, Timiskaming, Nipissing and Parry Sound, as well as Timmins.