Care commissioning is an emotive issue. Following a decade or more of austerity in the public sector, it is understandable that children’s services and charity leaders bristle when reading about soaring profits among private sector providers.
In a sector with not enough residential or foster care placements it is inevitable that rising demand will result in prices going up. It is also inevitable that some providers have taken advantage of this, particularly where unplanned placements are made.
However, in most cases care providers operate on low profit margins and deliver good quality care. Independent sector associations also point out that many do this while working within multi-year agreements that restrict their ability to raise rates in line with rising costs (see special report).
Some campaigners called on the Care Review to recommend banning for-profit providers to reduce costs to councils. Despite criticism of the for-profit sector, the review’s final report stopped short of that and instead recommended a windfall tax on large private providers’ profits. It seems unlikely this will be taken up by ministers.
The review also recommends removing the commissioning of care placements from individual councils to regional bodies which, through having a wider geographical reach, would have greater purchasing power. Experts are unconvinced this will deliver the sea change needed to shift the balance of power, with some calling for a move to national commissioning of placements.
The review uses terms like “taking back control” and “getting a grip” to justify measures to give commissioners the upper hand in negotiations. While market conditions currently favour providers, if the pendulum swings too far the other way, it will simply drive away providers at a time when demand is set to rise further. The reality is that commissioners and providers need each other.
There are plenty of examples of where council commissioners and the independent sector are working constructively together. Plymouth Council worked with providers to develop a framework that gave them assurances on income and regular rate increases. This stimulated the placement market so that children who would have been placed outside the area are now cared for locally and at a lower cost (see practice example).
Such pragmatic approaches – along with cool heads and calm words – are what will solve the current problems, not divisive language and utopian solutions.
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Derren Hayes, editor, Children & Young People Now
