Residential child care futures - we are stuck, no closer to a solution after years of reports

The narrative shared by responses, though from varying perspectives, is a combination of high inflation, rising demand, ‘broken’ care provider markets, and historically high overspends.

Each LGA report has offered solutions and advice that are disregarded and unacted upon by the parties to whom they refer, both provider and purchaser. Each year the responses manoeuvre to defend a position. Each year early intervention and higher-level needs are pitted against each other. The researched reality is that edge of care needs do not necessarily become higher level needs. Deprivation is different to trauma, different cohorts of children.

We are stuck, no closer to a solution after years of reports. 

The Care Review had no Theory of Change. It left the predicament of children's homes funding unaddressed, preferring to cloak its credibility with the impractical proposal of regional care cooperatives, a means by which the savings to pay for its other reforms would seemingly be made by local authorities curbing fee levels for independent sector placements. If implemented totally it was predicted the reforms would achieve a reduction of the use of residential options.

The Theory of Change for Residential Child Care options has to start from recognition that demand for high-level high-cost services/placements is increasing. This suggests there is a systemic issue that needs a systemic response rather than the current continuation of the piecemeal propositions of government’s Care Review implementation.  

We need real life not rhetoric. A starting point for the Theory of Change is the reality if the making of profits is to be addressed is that around 80+ per cent of homes are now privately owned. This presents a major logistical challenge, as is being encountered in Wales as it pursues the desire for not-for-profit services. To open or convert the numbers of homes required is a funding, organisational, logistical challenge of a scale not undertaken ever in the history of children's care anywhere. Even if we had these capacities we would need leadership able to conceive and deliver the outcome. It would need a courageous Secretary of State to argue the case.

Purposeful planning is required, destabilisation is to be avoided, care needs a secure base from which to operate. The potential for investor flight and closure of homes has recently been made reality as one provider recently closed 25 homes.

Local authorities’ funding levels rarely allow investing in their own new homes, when they do, analysing recent openings, they are often more of the same. More council homes needs Department for Education funding. The DfE funding is currently too little, making the arrival of new homes too few and too slow to meet demand. National responsiveness is unaffected. 

Inconvenient evidence for those of us who argue for not-for-profit is that research shows councils homes have been consistently shown to cost 33 per cent more. 

The complexity continues. New local authority homes would need to link with NHS child mental health to provide aggregated services. Here we have the same workforce lack of supply of personnel and services. Private homes can buy in psychology and psychiatry and therapy, but many councils cannot, and children are stuck in waiting lists. And another masked factor, we act as though the NHS is publicly owned but actually is provided by a multitude of contracted private services.

Local authorities bid for government funding but there is no national data on needs to be met and so no planning possible for planning of what we need and where. 

We have no method of trend forecasting so are always reactive. The theory of a market is that it is supposed to be responsive, but we see higher level of numbers and needs of children not being met by a market response of registered homes resulting in a new mega-costly sector, perhaps an emerging market, of unregulated staff-intensive settings to warehouse children.

We do not have a public database to enable planning for vulnerable children. We need a granular database connecting what needs, how many, where needed, trends likely in two years. Does the DfE now possess such a database? This would be DfE being on the front foot. A publicly available granular database with the results of a needs audit across all local authorities is the bedrock upon which policy and funding decisions need to be made by governments, local authorities and providers. The secure emotional base needs a secure expenditure base.

Without such a database we can have no consistent monitoring of outcomes, no workforce planning with regard to training or pay, terms and conditions that are drivers to change the current recruitment crisis.

The idea of procurement is that it does not matter about who provides if outcomes can be achieved cheaper through privatisation, checked and directed by regulation through inspection of standards. The cost of children's services today then must also factor in inspection cost, it is not fully recovered by registration costs to providers. The cost of inspection has not been included in any analysis.

The LGA reports opacity of independent providers accounts. Opacity applies to all parties. Establishing clarity is crucial. Do independent providers also gain from providing feeder services to their provider entity? Do local authorities accounts also distribute costs across budget heads?

Voluntary organisations are often fielded as the cavalry that will square the care and cost circle. There are few now involved with residential child care and if not now a provider are not signalling a desire to open homes. Reputational risk and high investment and expenditure are active deterrents. 

As to solutions, there are many untried. The only fully conceived alternative is the soon to close through lack of funding Children England's Carebank. There are others, targeted block purchase or partnerships can be successful. The key is specificity of need not sufficiency of number. Development of co-operative ownership have been few, there is only a small activity currently.

The situation is more complex than is frequently presented. Simplification suggested by a sole focus on ending profit making prevents the urgent future-oriented sophisticated thinking and action needed.

There is always next year, but every year is closer to too late and the point of no return. 

Jonathan Stanley is manager of National Centre for Excellence in Residential Child Care (NCERCC).