Watchdog launches study of children’s social care provision after calls from Review Chair

The Competition and Markets Authority launches a study of children’s social care provision to establish why a lack of availability and increasing costs could be leading to the needs of children in care not being met.

12/03/21

Watchdog launches study of children’s social care provision after calls from Review Chair

The Competition and Markets Authority (CMA) has today (12 March) launched a study to examine the lack of availability and increasing costs in children’s social care provision, including children’s homes and fostering.

The CMA is a non-ministerial government department responsible for preventing and reducing anti-competitive activities and strengthening business competition. Due to its powers, the CMA says it is in a unique position to “lift the lid on this complex sector” and find solutions to problems it uncovers.

Depending on what it finds, the CMA can issue guidance to businesses and the public, make recommendations to the industry or to government or, if appropriate, launch a full investigation into the market.

In England, Scotland and Wales, around 99,000 children live under the care of their local authority, with the majority of children in care – approximately 65,000 – living in foster care.

Around 16,000 children live in residential care, including children’s homes and independent or semi-independent living accommodation, with the remaining 18,000 in a range of other types of placement, including with their parents or placed for adoption.

Children’s homes can be provided directly by local authorities, by the private sector or by charities – however 70% of children in care are placed in private sector, with the figure in Wales rising to 78%.

According to data from the National Centre for Excellence in Residential Childcare, costs charged to local authorities for independent provision of children’s homes have soared by 40% from £2841 per week on average in 2013, to £3970 per week on average in 2019.

“We are concerned that some children are not getting access to the right placements due to a lack of availability in the system, and that rising prices are putting further pressure on stretched local authority budgets,” Andrea Coscelli, Chief Executive of the CMA said.

“The CMA is in a unique position to use its powers to look into this. But children’s care is not a market like any other – our clear and overriding priority will be about identifying ways children can get better care.

This will include examining the concerns raised about the role of private sector providers, which has grown in the last few years, as well as the role of public and third sector providers.”

The launch of the study comes after concerns were raised by social work and social care leaders around the high profit margins of the private children’s home market.

In January Josh MacAlister, then Chief Executive of Frontline and now Chair of a wide-ranging review of children’s social care in England, wrote to CMA Chief Executive Andrea Coscelli saying an investigation by the authority would “provide invaluable evidence to my review”.

Read more: www.socialworktoday.co.uk/News/Watchdog-considers-opening-investigation-into-children%E2%80%99s-social-care-market

A recent Local Government Association (LGA) report also found that some independent providers of children’s residential and fostering placements are achieving profits of more than 20% on their income.

It also asked the Government to look into the impact of increasing private equity and stock market involvement in the system, after research showed that the six largest independent providers of placements made £219 million in profit last year.

Read more: www.socialworktoday.co.uk/News/LGA-reveals-scale-of-%E2%80%98concerning%E2%80%99-profit-margins-in-children%E2%80%99s-social-care-market-

Similar questions had been raised by then Children’s Commissioner for England Anne Longfield in her 2020 report ‘Private provision in children’s social care’, as well as in a 2019 report from the Housing, Communities and Local Government Select Committee.

According to the CMA the study will examine whether high levels of profit have been made at the expense of investment in recruiting and retaining staff, and providing quality services.

However, Chief Executive Officer for the Independent Children’s Homes Association Peter Sandiford, responding to the news said that Ofsted inspections show that independent sector provision is of “at least as good quality” as local authorities’ own homes.

“Whilst of course there are outliers the vast majority of registered children’s homes are in fact cheaper to place in than the independently assessed cost of in-house local authority provision.”

“Given the way residential child care is frequently used in this country as a ‘last resort’ is it surprising that it is expensive?” Sandiford said, adding: “many of the children, as well as having significant early life trauma, have then undergone the additional trauma of successive fostering placements.”

Responding to the claim that children are not getting access to the right placements due to a lack of availability, Sandiford said that while there is a lack of the right placements in the system, the answer is in the whole residential sector responding.

“The majority of private and voluntary providers would want to contribute to improving sufficiency if commissioning was undertaken on a more relational basis than is happening now.

“When we start to drill down into individual referrals what we all too frequently see is them being based on problems and needs with little or no recognition of the child’s strengths and potential.”

The CMA will look at how well the current system is working and provide a ‘health check’ for the market.

In particular, the study will look into the supply of placements, including the balance of local authority, private sector and third sector provision; prices charged by providers and variation between prices paid for similar types of placement; the way commissioning of places is carried out; and the environment for investing in the system to ensure sufficient appropriate places are available for all children who need them.

Market studies, like this one, can lead to a range of outcomes, ranging from the CMA giving the market a clean bill of health, to taking consumer or competition law enforcement action, or making a reference for a more in-depth market ‘investigation’.

The children’s social care system is currently the subject of significant policy attention across the UK, including through the Independent Review of Children’s Social Care in England, headed by Josh Macalister, as well as the implementation of the Promise review recommendations in Scotland and the Improving Outcomes for Children programme in Wales.

The CMA says this study will take into account the policy context of each nation.

Comments on the issues raised can be submitted in the CMA’s Invitation to Comment by 14 April 2021: https://www.gov.uk/cma-cases/childrens-social-care-study#launch-of-the-market-study

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