Most care commissioning involves developing contracts with independent providers from the voluntary and private sectors to provide places in residential children's homes and foster families. There is a shortage of places in both settings. In 2019, the Fostering Network estimated a shortfall of 8,000 foster carers in the UK and an Ofsted report last year highlighted the shortage of carers with the right skills to match to a cohort of looked-after children who are generally older and have more severe emotional and behavioural needs.
In recognition of a shortage of foster carers with the right skills, Staffordshire County Council has cast its net countrywide as part of a pilot project with private provider National Fostering Group to find foster families able to care for adolescents that would otherwise be cared for in residential care (see practice example). What long-term impact the Covid-19 pandemic has on the recruitment and retention of foster carers is also still unclear. Councils have reported foster carers being unable to maintain existing or take on new placements due to health concerns – two-thirds of foster carers in England are aged over 50 putting them at greater risk of experiencing severe Covid symptoms – but interest in the role has also emerged from previously untapped communities and groups keen to help during the pandemic.
Lack of provision has also been a growing problem in the residential care sector in recent years. This is more acute in the South East of England, particularly London, than other regions such as the North West. It has led to commissioners developing more regional approaches to sufficiency planning and is a key reason that only one in four children are placed in a setting in their home authority, while a fifth live outside their region (see graphics).
Other indicators from last December's Independent Children's Homes Association State of the Sector Survey show how commissioners are working in a market where the balance of power is weighted towards the providers of residential care. Half of providers report rising fee levels, the proportion reporting occupancy levels in homes at 95 per cent of capacity or above rose from eight to 23 per cent in 2020, while most providers reported referrals from councils outstripping supply.
The situation has led to rising concerns among local authority leaders that large independent providers are exploiting the market conditions to charge high fees and boost profits. This is partly borne out by research by Revolution Consulting which shows the 20 largest providers of children's social care services have a profit margin of 17 per cent (see research evidence). However, the ICHA argues that for most of these larger providers it is the reinvestment of the profit that enables them to invest in innovation, new provision and frequently provide services to the children local authorities are finding most difficult to place. The issue is one of the elements of a study by the Competitions and Markets Authority (CMA), which will feed its findings into the Independent Review of Children's Social Care and could lead to sector reform (see ADCS view, below).
Collaboration and outcomes
Collaboration on commissioning between councils has traditionally been geographically based, such as the Pan London and the North West Placements initiatives. Almost all of these regional frameworks and dynamic purchasing systems – a shared approach used by regional consortia to procure places – looked to create ways for local authorities to comply with public procurement regulations through access to spot placements on terms agreed through a tendering process. Recently, these systems have failed to keep control of costs resulting in some councils moving to more locally focused purchasing of care placements.
“Focusing on smaller geographical areas and partnering only with neighbouring authorities may appear a more manageable option from an individual authority's perspective,” says Andrew Rome, managing director of Revolution Consulting, but “as commissioners disaggregate their combined purchasing power, they also begin to lose the ability to influence and shape the supply side of the sector”. Rome adds that another consequence of this disaggregation is that providers are opting out of engagement with them.
However, where collaboration does appear to be making headway is in areas that are looking to develop procurement partnerships that involve providers in the process of developing contracts. On example is the approach being developed in West Sussex, where the council is working with the ICHA on an equal footing to devise contracts that deliver on its sufficiency plan and gets the support of children's home providers (see practice example).
Commissioning for outcomes has been a buzz term in the care sector for years, but some experts such as Mark Kerr, chief executive of the Centre for Outcomes of Care believe councils know too little about what care packages work best for looked-after children. Evidence of this can be seen in high rates of inappropriate referrals to providers from councils, says Kerr. This is particularly evident in children with complex needs including mental health and offending behaviour, he adds. “In terms of the shortage of placements for some adolescents, control lies with the providers, who stated they generally accept placements when they are confident in the referral information, can meet the needs, can mitigate the risks and improve outcomes,” Kerr says.
Key policy reviews
The Care Review and linked CMA study look set to shape care commissioning over the coming years. The latter was announced in March in response to a request by review chair Josh MacAlister. The study is set to examine the lack of availability and increasing costs in children's social care provision, including children's homes and fostering. It will also investigate concerns around high prices paid by local authorities and inadequate supply of appropriate placements for children in their care. The study will look at placement supply; prices charged by providers and the widespread variation; how effective councils are in commissioning placements; the regulation in the sector; and what factors influence providers' investment decisions. Following its research, the body can issue guidance to businesses and the public, make recommendations to the industry or to the government or launch a full investigation.
Many in the sector have welcomed the study as a way of curtailing the role of private providers, but some such as Ray Jones, emeritus professor of social work at Kingston University, warns the CMA's remit to promote competition means “it is hardly likely to conclude that care for children should be a public service rather than a commercial profit-generating business”.
The Care Review is largely focused on understanding the experiences and needs of children and young people, but is also looking at the system response, including who is best placed to provide care, the most sustainable and cost effective way to deliver services and what improvements are needed in response to changing needs. The review began work in March and is currently gathering evidence. It is unclear when it will produce findings, although the government contract to undertake the work is for a 12-month period. A key figure could be civil servant Shazia Hussain, who has been appointed head of the review team. Hussain was previously the Department for Education's lead representative on Sir Martin's Narey's 2016 independent review of children's residential care, which included a recommendation to move to a national system of commissioning children's home places.
Other ongoing pieces of work that have the potential to influence how councils commission and purchase care services include a “spotlight inquiry” into the care system by the all-party parliamentary group for looked-after children; the education committee inquiry into children in care homes; and the children's commissioner for England's Childhood Commission. Meanwhile, the Cabinet Office green paper Transforming Public Procurement could also introduce major changes to how councils contract with providers. It proposes treating all social care in the same way as anything else for example, tables, chairs and works and removing the “light touch” regime. According to local government legal specialist Leonie Cowen the implication of this for the commissioning of services is that it could make it far more difficult to commission for outcomes and achieve partnership working. Cowen argues for the consideration of more innovative solutions, including the creation of a specific children's services procurement framework (see expert view).
The next year could be crucial in defining the commissioning environment for the rest of the decade with the stakes high for the quality and sufficiency of care placements available to councils.
ADCS VIEW COMMISSIONING AND CHILD-CENTRED PRACTICE
By Charlotte Ramsden, ADCS president 2021/22
There is a lot bubbling away in relation to children's social care at the moment; the Department for Education's independent review, the education select committee's inquiry on children's homes, and the Market and Competition Authority's study into the children's social care “market” to name just a few. I'm sure the local authority role in the commissioning of services for children in care will be considered in each of these exercises as it has been picked up in previous reviews in this space, including Children's Residential Care in England (2016) and Foster Care in England (2018).
Commissioning activity has an important role to play in ensuring that local authorities are able to secure the services that children and young people need. Critically, our market shaping and procurement activity must be led by strong needs analysis, supported by flexible systems that can quickly respond to changes in the level and types of presenting needs.
Children in care are not a homogeneous group, and, over time, we have seen an increase in the number of adolescents with complex and overlapping needs coming into care as they can no longer safely live with their families. Our commissioning practices haven't always been responsive to the needs of this group nor has the offer from providers. Put simply, the system wasn't designed to provide highly tailored, bespoke placements to meet social, emotional and mental health needs meaning spot purchasing is increasingly common.
While better commissioning practices may be the answer to some of the challenges we currently experience, commissioning is not a panacea: we also need child-centred practice and regulation that enables us to respond to these changing needs; we rely on highly individualised placements because registered providers can be unwilling to accept a referral for a young person in severe distress.
Our current system of regulation is prohibitive and doesn't flex in the ways we need it too. So, we need to continue to strive to think beyond organisational and service boundaries if we are to be truly child-centred. Registering providers rather than physical settings, similar to the approach taken in fostering and adoption services, could offer part of the answer.
Those who are poorly served by the current regulation system require a multi-disciplinary support response. There is a clear expectation running throughout the special needs arena of the need for joint planning and commissioning across local authority and health services. And while there is more to be done in this space, there is also some great learning that we could build on to improve our joint commissioning of other services in children's social care. To do this, we need to acknowledge and work through the barriers in a health system that is set up to respond to diagnosed clinical needs and the reality of the breadth of emotional health and wellbeing challenges children face. I look forward to continuing the conversation about how we can best work together to make sure that as a wider system, our commissioning activities work for children and young people.
