The findings show there is widespread support among local authority senior managers and practitioners for government moves to cap the profit levels private children's social care providers can make through measures in the Children's Wellbeing and Schools Bill.
Such a stance is understandable. Amid a crisis in local government finances, it is unsustainable for councils to continue spending £500,000 a year on individual care packages and ministers hope this will tackle it.
However, there was concern among the survey respondents that the introduction of a cap could see some providers leave the sector resulting in a decline in residential places, which are already in short supply. Reforming the care sector while maintaining placement stability is a fine balance and will require careful handling by ministers. Taking a “them and us” approach that pits private versus state provision is unlikely to work, as sector leaders have warned.
Instead, a partnership approach should be pursued in the short term. This would see independent providers work with care commissioners and civil servants to establish a rate for residential placements that is sustainable and fair for all parties. This would consider demand projections over a three-year period and meet the anticipated needs of children, which are becoming ever more complex.
In the longer term, councils must be given state funding – or freedoms to access private investment – to develop more of their own children's homes, run by themselves, not-for-profit entities or charities. Alongside this, councils must be given more money in June's Spending Review to invest in early help and prevention services, a point the Local Government Association makes in its submission to the government.
With fewer children entering the system and greater capacity coming on stream, the residential care sector should have a more diverse range of providers and councils will no longer be at the mercy of market forces.
Survey respondents had little confidence the government's reforms would lead to savings for councils or better-quality placements by 2030, but that is the challenge facing ministers and what vulnerable children need them to deliver.
