The first report by the government-commissioned Care Review, published in June, raised concerns about the way the residential care market operates, while a recent submission in response to the initial findings by the North East region of the Association of Directors of Children's Services (ADCS) has urged wholescale changes.
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"A radical rethink is needed of arrangements to provide safe and loving homes for children who cannot live with their birth family," the response by the North East ADCS region states.
"The dysfunctional ‘market’ for children’s residential care must be dismantled or radically overhauled and profit-making eliminated or capped. Capacity to actively manage regional markets and improve commissioning is a priority. Government must invest in more local provision.
"Children and young people’s outcomes should be the primary focus for all providers operating within the care system. The concept of a care ‘market’ is fundamentally flawed. The role for the independent sector in the provision of fostering and residential care is highly problematic. Fees are increasing at a rate that is unsustainable and measures to cap rates and set a fair price for care are needed."
But children's homes providers have hit back - arguing that the suggestions made by the North East ADCS region would do little to improve the system.
"Local authorities, despite their massive infrastructures, do not currently run their homes any better or more cheaply than independent providers," a statement published by the Independent Children's Homes Association (ICHA), said.
"There is nothing to suggest that returning homes to local authorities will miraculously change this."
ICHA has said that, instead, there should be a change in how homes are used.
"Early use with collaborative foster care that enables children to transition better and have improved outcomes is just one way," it said, "stopping using homes as a last resort is another."
ICHA also addressed concerns about the level of profit made by private children's homes - with the North East ADCS region calling for profit making from children’s residential and foster care to be "eliminated or capped".
"The North East prides itself on collaborative working," the ICHA said.
"Perhaps there is a need to look at how providers are able to make a profit whilst keeping costs lower than local authorities. Maybe more collaborative working to better understand money management is in fact part of the way forward?"
