And failing local authority children's departments could be forced to take on services from these or other private bodies under new powers in the Children Bill which aim to toughen up Whitehall intervention.
The proposal to set up the private "trading companies" is an idea mooted in Next Steps, which was published alongside the bill.
In it the Government said: "We will commission a study to scope the current and potential market for providing children's services to inform a more detailed strategy for promising greater contestability.
"This may include incentivising excellent local authorities or other organisations to set up trading companies or other organisational models able to franchise or contract to provide a successful business model."
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