More children social care providers will drive up standards and reduce costs

Pubished by Professional Social Work magazine, 4 May, 2022

The problem

Pre-pandemic, local authorities in England were already under significant pressure, as budget cuts made the increasing number of children being placed into care difficult to manage. Following nearly two years of Covid restrictions and lockdowns the problem has been exacerbated. In its interim report, The Independent Review into Children's Social Care has highlighted concerns such as a shortage of appropriate children's social care places, the high cost of placements for these children, and a lack of variety in providers leading to excessive profits within the sector. 

These are systemic problems that need to be tackled before we reach crisis point.

The issues explained

A shortage of appropriate places and a lack of planning - long-term budget cuts mean that there is currently a severe shortage of appropriate places for vulnerable children and a lack of a range of placements. Short-sighted decisions by local authorities, including children being placed without planning in any available home across the country, regardless of where they are from, has led to poorly matched placements which can result in difficult or dangerous incidents and disruption.

In some cases, this lack of matching means that children are not provided with appropriate support. Alternatively, they are put in placements with more support than is necessary and therefore denying a place for a child who does need that level of care.

Cost of care - despite councils increasing budget in the past two years, and eight in ten councils in England overspending in 2019/2020, the impact of long-term budget cuts mean there’s still not enough funding to deal with the ever-increasing demand for children's social care placements. The high cost of placements in children’s homes means that at age 16 children are often rushed into moving on to cheaper alternative accommodation before they are ready.

Excessive profits due to lack of variety of providers - the interim report raised concerns over the largest 15 independent providers earning significant and persistent economic profits. Due to the current regulatory framework, that makes it extremely difficult for small organisations to set up and as a result, the sector is monopolised by a few large organisations. This lack of competition allows these providers to set their fees high and limits the options available for placements for children in care.

The solution

A change in decision-making - even with limited budget, decision-makers need to invest now in support services within the community to prevent vulnerable children reaching the point where they end up in care.

If children are placed into care, it is essential that there are carefully thought-out planning processes to match children to the best homes for them and the community. There needs to be investment from central government to allow budget for this crucial forward planning and matching.

Multiple providers - we need to see a wider variety of organisations providing residential care and children’s homes. Currently, due to the planning approach and high cost of buying property, a third of residential care homes are provided by the ten biggest organisations in the country - these are the corporations that can afford to navigate the planning process and foot the bill for property. Unless these regulations and processes change, no smaller organisations will be able to establish themselves, competition will remain low and fees high.

In a well-regulated sector, it does not matter whether placements are independent or state-run. It’s outcomes that matter, and having a more varied range of providers will give local authorities the choice that they desperately need and create competition that will in turn mean providers have to be competitively priced, preventing a select few large corporations from making excessive profits.

But more important than profits, a diverse range of providers will also drive up the standard of care as local authorities will have more choice. This will ultimately support the long-term improvement of the sector, and ensure that costs reflect service levels and lead to better outcomes for the children in care.

For the benefit of the vulnerable children in our communities, we need to act now to solve what is becoming an ever more pressing issue.