A survey of senior decision-makers and commissioners working in local authority children's social services has highlighted support for government moves to curb the profit levels of private care providers but scepticism the measures will improve the quality and availability of residential placements and reduce costs.
The online survey undertaken by CYP Now in partnership with Hexagon Care Services, aimed to gauge trends in the needs of children entering residential care and how local authorities are responding to this in terms of developing their in-house provision and commissioning independent sector providers.
The survey, conducted throughout February, also sought views on reforms to how residential care is purchased by councils, particularly the creation of regional care co-operatives (RCCs) to commission placements across a wider area, and government plans to curtail the profit levels of private sector providers.
Crucial time
It comes at a crucial time for the sector following the publication last November of the government's white paper on children's social care, Keeping Children Safe, Helping Families Thrive, which includes proposals to reduce costs by encouraging more charities and not-for-profit organisations to open new residential care provision, so councils are less reliant on the private sector.
While children's services leaders have welcomed the measures, some care providers have warned that the moves could lead to existing providers leaving the market, destabilising the sector, and that a partnership approach is needed (see expert view).
Survey responses
The CYP Now State of children's residential care survey was completed by 82 respondents with a further 171 partially responding. Of the 158 respondents who gave their role title, 22% were senior leaders in children's services, 15% local authority commissioners, 10% middle managers in children's services and 17% frontline social care practitioners. The remainder were from a wide range of roles including mental health social workers, youth workers, children's home managers and regulation 44 independent visitors.
Half the 159 respondents who gave their employer details worked for a local authority, 26% worked in the private and independent sector, 15% in the charity and not-for-profit sectors, and 9% in the public sector. Responses came in from every region of England, with most from the South East.
Placement practice
Most respondents (40%) used commissioning frameworks for the majority of their residential care placements, with 35% preferring spot purchasing for most places and a quarter using an even mix of both types of placement.
Of the 95 respondents that replied, 68% assessed their forecasting of placement demand as accurate while 32% didn't.
When asked what changes would help to improve placement forecasting, several respondents highlighted better auditing of children's needs at a local and regional level as important, in particular the “different profiles of need that co-occur”. More partnership working between councils and providers was cited.
Several respondents were hopeful RCCs could help improve residential care placement management but 15% were confident it would bring costs down compared to 34% who were not optimistic.
Cap on profits
The government plans a cap on the annual profit private providers of social care placements can make following concerns of profiteering in the children's home sector. A sizeable majority (77%) of the 93 survey respondents backed the plans. However, most respondents didn't back a complete ban on profit-making providers as has been called for by some campaigners. Linked to this are concerns – expressed by two-thirds of respondents – that the introduction of a profit cap could reduce the supply of residential care places locally.
Those supportive of system reform put forward several suggestions on alternative models for commissioning residential care places including the development of social enterprise provision and community-run homes.
“Community projects have more freedom on pay, training and additional staffing incentives so may be cheaper than local authorities running their own homes,” one commented.
Children's needs
The survey also asked for views from the sector about children's evolving needs and how best to meet them. Some 83% of 90 respondents said the needs of children in residential care are getting more complex and 78% thought this was a factor in the recent rising cost of care fees.
Respondents were also asked to give details on what types of needs are increasing in their local area, with 63 submissions flagging a wide range of issues including harmful sexual behaviour by children, mental health problems caused by trauma, and challenging and aggressive behaviour.
Other issues professionals said are on the increase include exploitation by gangs including children being sexually and criminally exploited, undiagnosed learning difficulties including autism and ADHD, and more children being held under deprivation of liberty orders.
One respondent said: “The amount of issues young people have when coming into residential care is increasing.”
New council provision
Just over half of survey respondents said their council had opened at least one new home in the past three years. The main reasons for this included to improve the quality of residential care (25%), to save money (24%), to gain more control over placements and costs (22%) and to boost capacity due to rising demand (21%).
More than nine out of 10 respondents said small homes containing one to four bedrooms are most in demand due to children not being able to be accommodated together.
EXPERT VIEW COLLABORATION IS THE ONLY SOLUTION
Simon Hammond, chief executive, Hexagon Care Services
The survey paints a stark picture of the children's residential care sector: escalating complexity, spiralling costs, and a system under immense strain. While the survey elicited thoughtful responses from sector experts, it revealed a concerning lack of clarity on how to address this crisis.
A central issue is the sector's struggle to adapt to the increasingly complex needs of children requiring specialised care. Simply increasing solo placements is not sustainable; a focus on pathways to step-down care from high-cost provisions is crucial.
The proposed regional care co-operatives (RCCs), intended to reform the children's social care system, face scepticism. A significant 84% of survey respondents expressed uncertainty or lack of confidence in their ability to reduce placement costs. More clarity is needed on how RCCs will deliver tangible value.
The sector must move beyond the adversarial narrative of local authorities versus private and non-profit providers. The focus should be on delivering high-quality, value-for-money care. This requires investment in a trauma-informed, resilient workforce and prioritising local placements for local children, regardless of provider type.
There is a call for fair pricing structures that are essential for sustainable operations, ensuring funds are reinvested into services rather than excessive profit-taking. We support this and the call for financial transparency, which we practice through open-book commissioning.
Successful partnerships are achievable, and we have our own example of our work with local authorities in the North East which demonstrate the value of collaborative efforts between local authorities and providers in creating services tailored to complex needs.
The complex, interconnected nature of the sector's challenges necessitates a collaborative approach. No single decision-maker can effectively address these issues. Failure to act risks the future of children's residential care and the vulnerable children it serves.
Challenges and reforms
When asked about the biggest challenge facing residential care, 41% of respondents highlighted the shortage of the right type of placements while 22% identified workforce pressures.
Respondents were asked how confident they were that planned reforms to placement commissioning and the curbing of providers' profits would provide more good-quality places and less cost to local authorities by 2030. Just 22% said they were confident compared with 35% who weren't and 44% who were unsure.
When asked to suggest solutions to the sector's problems, dozens of suggestions were put forward by respondents. These included improving assessment practice, private providers only being used for the most complex cases, more transparency in placement costs, better pay for care professionals, a more even distribution of settings across the country and more investment from the government to name a few – highlighting the complex and multifaceted nature of the issues facing the sector.
