The Big Debate: Can regional care co-operatives solve the placement shortage?

Panellists

Kevin Gallagher, managing director, Amberleigh Care

Kevin is a manager, social worker, trainer and organisational consultant who runs therapeutic independent schools.

He has a leading role in promoting the delivery of theoretically informed, therapeutic care and education and supports, developing and promoting therapeutic childcare across the UK.

Rob Finney, chief operating officer, Tristone Healthcare

Rob has more than 25 years’ experience working in the social care sector, largely with looked-after children. He has accrued operational and strategic management experience in the public, private and third sectors.

A qualified social worker, Rob joined Tristone in 2017 after spells with Manchester City and Kirklees councils.

Harvey Gallagher, chief executive, National Association of Fostering Providers

Since 2011, Harvey has been CEO of the NAFP, which represents the interests of independent fostering agencies with local/national governments across the UK.

Harvey has spent 30 years working for local government, charities and a non-departmental government body, and as an independent consultant.

What do you feel about the idea of groups of local authorities working together to commission places from independent fostering agencies?

Harvey Gallagher: “In principle, it’s a good idea but not a new one – it’s been tried and tested in many shapes previously. That was one of the questions I had over [Care Review chair] Josh McAllister’s original recommendation – I didn’t get a sense that he looked at the strengths and weaknesses of previous regional commissioning.

What it can potentially work well on is bringing systems together. So rather than 10 or 12 or 20 local authorities all doing their own thing, or variations on a theme, if they more or less all did the same thing that should create efficiencies for them and IFAs.

Each IFA is perhaps working with 20, possibly more, local authorities. That’s 20 different contracts, 20 different agreements, 20 different sets of monitoring. They can do all of that, but it costs them money and administration to do so and they have no option but to add the cost of that onto the fee charged to a local authority. Every local authority that wants something different from its neighbour is paying for it.

If I was them, I’d want to do the same as my neighbour so I was paying a bit less for it. I think they’re choosing to do their own thing because they can, rather than because it’s a good idea.”

What’s been the experiences of providers taking part in previous regional commissioning initiatives?

Kevin Gallagher: “Local authorities set up regional consortium, and most of the frameworks are regional or sub regional. In the early days, the ideology around that was almost like ‘we’re going to come together so that we have collective bargaining power, and we’ll have more leverage to drive down prices’. That was very much how it was approached. That’s a procurement approach of buying volume and forcing prices down.

If you base commissioning 70% on price, you know what influence that’s going to have on the market. But if you base it 90% on quality, for argument’s sake, then you’re going to massively drive up the quality.

So what you’ve seen over a period of time is lots of providers coming off frameworks, or local authorities finding they can’t get the right placement and so have to go off framework. Some providers will say the contracting arrangements on the framework are not very realistic – some of them went several years without any fee increases. It’s not realistic in terms of how these services are set up and function.”

Do you think the DfE’s advisory body on profiteering in children’s social care could play an important role in helping identify where regional commissioning can add value?

HG: “They’ve got a really important role to play. But I’m concerned because of the lack of transparency about this. The use of the term profiteering is a bit vague; it’s going to be hard to define.

And in terms of value for money, there’s been a real terms decrease given inflation, in what local authorities are paying [in care fees]. I haven’t been getting 8-9% uplift for the past couple of years from local authorities, so the fees have been decreasing in real terms.

So, if Steve Crocker [advisory body chair] was to recommend no profit making in the sector, I guess I would say fair enough if that was based on personal values.

But you certainly couldn’t argue it’s a good thing from the perspective of services to children or value for money for the public purse. I would say that the evidence suggests that if you take profit out, our children will do worse and it will cost more money.

If he thinks that the ethics of this are the most important thing, I’ll respect that. But it’s a system, therefore there could be unintended consequences – you’re likely to make things worse because private [provision] means good or outstanding foster carers themselves.”

Could regional care cooperatives help local authorities share best practice in care commissioning and improve the quality of provision?

KG: “We’ve only got one buyer, the state, with local authorities holding the purse strings. And if they were really demanding customers, if they said ‘we only want theoretically informed evidence-based residential care and we’re not going to put our children in anything else’, that’s what the market would deliver.

They do have significant power to pull some levers to change what’s being offered, and they have a part to play in delivering that. But the narrative, such as in Wales, to get rid of the private sector and imagine it’s all going to be delivered somewhere else and do it in two years from a standing start… it’s pie in the sky and has been catastrophic for children.

The English conversation seems to be more nuanced. I get it – I’m concerned about overseas’ ownership, about the scale of private equity [ownership], about levels of debt, about profiteering. I’m not a lone voice. There are swathes of people, mostly in the private sector, who are pleading to do this differently, because we don’t want to see this happening, getting tarred with the same brush.”

Does the shortage of residential care placements in some parts of the country reflect a broken system?

Rob Finney: “I understand the concern that the market is broken. I think my worry is that within all of that there is a political dynamic in terms of people talking about the private sector being bad, public sector being good. The research shows that the private sector, generally speaking, is not more expensive, and is not worse quality. I think we’ve kind of lost that in the narrative.

Everything we do is based on quality and being brilliant for young people. In terms of local authorities, though, I absolutely think they could commission better and shape the market better. Quite often local authorities are forced into a position of purchasing as opposed to commissioning because they are under-resourced and the placement teams are just desperately trying to find numerous placements. I don’t think there is the emphasis on how to shape the market.”

The plan is for RCCs to involve care providers in their decision making. Is that something you think could work?

RF: “It’s got potential. Our approach is to work individually with local authorities to say, ‘we want to open a children’s home in this area, we’ve got a business that wants to expand, we think that we can see there’s a high level of referrals, tell us what you need’.

You can block book homes to make them cheaper, we can be flexible with the economic models that we put in place for you. We want to provide you with quality at the right price and provide value for money. We do that on an individual basis, but if you had great quality data and information coming from a group of authorities working together with providers, that could work too.

My worry having spent 10 to 12 years in local authorities is traditionally local authorities don’t work well together. I spent some time running a voluntary adoption agency when regional adoption agencies were put together. I could point to examples of where years down the line they together had spent hundreds of thousands of pounds on project managers and consultants to put the regionalised adoption agency together, and still weren’t functioning.

You could put a commercial case together to say, we’re going to spend millions putting a cooperative together to drive efficiency, but the reality is it will probably take twice as long and cost twice as much as they initially stated. You have to start asking what’s been the actual saving? How effective is this commissioning model? What is it going to deliver for young people?”