Really really sorry fmtmany at the way you are being treated. Please don't take this the wrong way, but viscous cuts are being made by this govt to all LAs and all public services. The only choice they have is where they make the cuts and whilst I have no idea how they do this, I imagine they are looking for "soft targets" and think one of them is foster carers. I know in my area they are closing respite care homes for people with disabilities to give their carers a break, closing day centres, luncheon clubs for the elderly etc.
I can well imagine someone saying that foster carers get paid well so they should buy their own equipment (which of course is grossly unfair) but I have sat through meetings with senior managers and I know how their minds work. (Well some of them anyway) and of course they are being pressured by their managers etc. The social workers and middle managers have no chance at all of changing things - unless they are prepared to stand up to their managers and even that won't really help - I have never experienced in my lifetime such viscous cuts being made. No one's job is safe any more, particularly if you are a public service worker.
Getting back to fostering, you could find out about IFAs in your area, as I think I am right in saying that babies of up to 6 months should share a bedroom with the carer. The only trouble is of course is that it is unlikely that LAs are going to have to use IFAs for young babies.
Some of the things your LA are doing though have nothing to do with finance -
refusing to do CRB checks on people who could care for your child in an emergency, both parents to attend support groups at 7.00 in the evening - are they MAD - don't they know about children getting tired and grouchy at teatime and that it is bath and bed time. It wouldn't be so bad if they were asking just one parent to attend, but to expect both to attend at that time is simply ridiculous. Trouble is some of these managers don't have children of their own, so know very little about childcare.
If you do resign I would make it clear in a letter to the director why you are resigning, and mention the false economy of providing equipment against the enormous costs of paying for an IFA.
Have you thought of child minding. Mind I gather they too now have to jump through all sorts of hoops but at least you would be doing what you like, looking after children, who go home at night!