Drawing on evidence from the Competitions and Markets Authority (CMA) that found care packages too often fail to meet children’s needs or deliver good value, the Care Review puts forward plans for an overhaul of how social care placements are planned, commissioned and delivered.
Central to the proposals are the creation of regional care co-operatives (RCCs), new bodies that would consolidate functions currently performed by individual local authorities. RCCs would be responsible for ensuring there is sufficient care provision in an area and planning for future needs; establishing and running new public sector fostering, residential and secure placements; and commissioning voluntary and private sector provided care.
Matching children’s needs
Under the plans, local authorities would have direct involvement in the running of RCCs and children would continue to be in the care of councils. By working at greater scale, the review says RCCs would be better able to shape the type and availability of care packages in a region and ensure this matches the needs of children.
“The RCC will be better placed to do this than individual local authorities because it will have a better understanding of the needs of its population and financial confidence to pay for the ongoing capacity safe in the knowledge that there will be enough children with similar needs who will need the home,” the review states. “If homes are unoccupied then the region can share the costs of having available capacity. Providers will lose dominance because they will need to deal with fewer commissioners rather than 152 local authorities.”
Andy Elvin, chief executive of Tact Care, supports the RCC model proposed by the review and says it should help increase the range of care packages available locally.
“Currently, we have a system where a [council] care placement officer is left with one choice and often that involves sending a child miles away from where they live,” he explains.
“To have a body with the one responsibility for commissioning for residential care and foster care, in my view, gives local authorities greater freedom of choice and easier decision making about the best placement for a child.”
Commissioning expert Andrew Rome says the move to a regional approach is recognition of councils’ weak position when purchasing care places. However, he warns that such a move “does not address the fact that many of the larger providers have services that will map onto multiple regions, and already deal with multiple regional commissioning consortia”.
He adds: “Yet another structural reorganisation misses the opportunity to focus on harmonised approaches to identifying need.
“Neither the review nor the CMA investigated in any detail the biggest challenges for regional commissioning. Agreeing focus and commitment levels among the participating local authorities is as much of a challenge as the commissioning of providers.”
Mark Owers, whose 2018 government-commissioned review of fostering in England recommended the creation of regional commissioning consortia of foster care places, backs the move to RCCs.
“Even though local authorities have always had 100 per cent of the children and 100 per cent of the money, they have lost control of the market,” he says. “They need government help to take back control of the system. Legislation alone will not be enough – it will require significant cultural change, more authentic relationships between commissioners and providers, and a higher degree of proficiency in codifying needs, demand forecasting, commissioning and commercial negotiations.
“Providers themselves will need to have an integral role in sufficiency planning, defining value and be given greater opportunities to develop the market. Data collection and analysis will need to be used more intelligently, for example through drawing on past referrals or correlating needs with spend.”
The review blames the dominant position of private sector care providers – 83 per cent of residential children’s homes are privately owned and 41 per cent of fostering families are in the independent sector – for many of the current problems with the shortage of places. It cites CMA analysis showing that annual profit margins among the private children’s home providers and independent fostering agencies studied averaged 22 and 19 per cent respectively.
Provider concerns
Organisations representing independent fostering agencies (IFAs) and children’s home providers question many of the figures used by the review and CMA to base their conclusions. They say the review did not properly engage with the provider sector and fails to reflect the many constructive relationships they have with local authorities.
Rome has sympathy with these concerns. He says: “The language used by the review is of purchaser control and ‘getting a grip’ on markets. This mindset is responsible for the picture we see today. How to effectively partner with the emerging highly efficient providers to share risk will require breaking away from such outdated language and attitudes.”
To fund the move to a regional commissioning system, the review recommends levying a windfall tax on the profits made by the 15 largest children’s home providers and IFAs.
Owers says that while a windfall tax is “an obvious answer” it would not be straightforward.
“The relationship between service delivery and profit in the 15 largest organisations is complicated,” he says. “Any windfall tax must take account of the impact of such measures on existing and future services delivered by the companies. They will have to find the tax payments from their existing budgets which will inevitably cut out their operating margins.”
