Policy: Commissioning – Placement Planning

Ensuring there are sufficient high-quality placements to meet the ever-changing needs of vulnerable children and young people is one of the key roles of a children’s services commissioner.

There are three key elements to the task: understanding the needs of looked-after children, understanding what provision is available and where there are gaps, and developing a service specification for the care placement. Once these fundamentals have been achieved, commissioners can assess what care settings are best placed to deliver services.

What sounds a straightforward process becomes anything but once demographic, social, political and financial pressures are factored in. Finding a solution that fulfils all of these demands while meeting the needs of children is a challenge for every local authority commissioner.

CYP Now’s special report on care commissioning analyses the key social, policy and economic factors influencing placement planning among local authority commissioners, the impact this is having on care placements, and what policymakers are doing to tackle this.

It also highlights key research on how commissioning practice is evolving and hears from experts in the field on attempts to develop partnerships between commissioners and providers across regional and organisational boundaries to develop a more effective system.

Meanwhile, two examples of innovative practice in placement planning are profiled to illustrate how change is achievable.

Policy context

Over the past decade, the number of children in care has risen by 28 per cent. On 31 March 2019, there were 78,400 children in care, compared with 60,900 in March 2009. The rate of looked-after children in the English population has also grown from 55 to 65 per 10,000 children.

In the decade between 2009 and 2019, there was a 53 per cent rise in the number of children on a child protection plan – an additional 18,160 bringing the total to 52,260 at 31 March 2019.

From 2009 to 2019, there has been a 139 per cent increase in Section 47 enquiries, where a local authority believes a child may be suffering, or likely to suffer, significant harm.

The number of cases grew from 84,100 in the year to 31 March 2009 to 201,170 in the year to 31 March 2019.

Not only is the looked-after child population a growing one, its demographic has also changed. In March 2009, 62 per cent of children in care were aged 10 or over, with around 40 per cent aged 10-15. By 2010, the proportion aged 10 and older had fallen to 60 per cent and that downwards trend continued until March 2013 when the proportion of older children was 56 per cent. By March 2019, the proportion of looked-after children aged 10 and over had risen to 63 per cent. In the 12 months to 31 March 2019, the proportion of males older than 16 in care had risen, a trend primarily driven by the rise in unaccompanied asylum-seeking minors being cared for by councils.

Another significant change over the past five years includes a fall in the number of children leaving care both to return to their families and being adopted.

Children's needs

The recent rise in the overall size of the looked-after child population and the age of those in the system has meant children’s services leaders and commissioners have had to adapt the care packages they provide so they meet the needs of older children. Young people coming into care when they are older tends to indicate that they have been exposed to neglect and abuse for longer. Children’s social care services have reported a rise in levels of childhood trauma over recent years, with the Association of Directors of Children’s Services (ADCS) highlighting the growing impact of domestic abuse, parental substance misuse and mental health problems on children in its Safeguarding Pressures 5 report in 2017.

Department for Education data shows that 56 per cent of looked-after children have a special educational need or disability (SEND)compared with 46 per cent of children in need and 15 per cent of all children. At 31 March 2019, 27 per cent of looked-after children with SEND were in receipt of an education, health and care (EHC) plan because their needs were assessed as being at the higher end of the spectrum.

Separate DfE data on the outcomes of looked-after children shows that social, emotional and mental health is the most common primary type of SEND, covering 40 per cent of those with an EHC plan, and 47 per cent of those with lower-level SEN support. For the child population as a whole, this is the primary need of only 13 per cent of those on an EHC plan and 18 per cent of those with SEN support.

Mental wellbeing assessments of children aged five to 16 who have been in care for at least 12 months shows that 39 per cent recorded a concerning score on the strengths and difficulties questionnaire (SDQ), while a further 13 per cent recorded “borderline” scores.

That looked-after children have much higher levels of mental health problems than the average is not a new development, but as rates of children’s mental health problems rise among the general population they are rising among those in care too.

Over the past five years, the government has placed much emphasis on reducing the numbers of children coming into care. In the one sense this has worked – the number of children coming into care on an annual basis fell two per cent in the year to 31 March 2019. However, this success is not reflected in the overall care figures because the number of children leaving care also fell last year by two per cent. There are a range of reasons for this including the fall in adoptions since 2015 and the fact that it is harder for older children to leave care by returning home.

In terms of mental health support for looked-after children, government policymakers have developed a number of initiatives in recent years. Statutory guidance governing the health and wellbeing of looked-after children requires local authorities to undertake mental health assessments by a medical practitioner when a child enters care, with these being reviewed regularly by a nurse. These should form the basis for the child’s individual health plan. Meanwhile, the DfE has funded a group of organisations, led by the Anna Freud Centre, to work with Action for Children, Child Outcomes Research Consortium, Research in Practice and NSPCC, to deliver up to 10 local pilots over two years to improve therapeutic support for children in care. The programme will look at which professionals should be involved in the assessment and develop best practice that ensures the child’s unique needs are at the centre of the process.

Trends in placements

Approximately 55 per cent of all looked-after children are in placements provided by local authority or public provision, with the remainder cared for by private or voluntary sector providers.

When deciding the most appropriate placement for a child in question, authorities must, insofar as is reasonably and practically achievable, ensure that the placement fulfils criteria such as being near the child’s home, not disrupting their education, allowing siblings to live together, meeting disability needs, and being within the authority. Which of these criteria apply and how they are balanced varies with each child.

The most common placement type is foster care. DfE figures show that 72 per cent of looked-after children were fostered at 31 March 2019 – 13 per cent with a friend or relative and 58 per cent with a carer unknown to them.

A further 12 per cent were living in residential care including children’s homes, semi-independent accommodation or secure units. Over the past five years, there has been a shift from foster care to residential placements with the proportion of looked-after children being fostered falling three percentage points since 2015, while children’s homes places have risen from nine to 12 per cent.

Placement stability is also important – most children in care (68 per cent) had one placement in the year but 10 per cent had three or more. Research suggests that the more moves a child has the greater the disruption there is to schooling and relationships. Some suggest this can be because of a shortage of the right kind of placements for children and indicates a failure in commissioning practice.

In 2018/19, placements inside the council boundary accounted for 58 per cent of all placements, with 41 per cent outside the council boundary. Around 20 per cent were placed more than 20 miles from home with the type of care placement and the child’s needs influencing this decision – four in 10 children in residential care were placed more than 20 miles away while just 16 per cent of foster placements were.

The 2018 Silent Crisis report by the Social Market Foundation notes that in the vast majority of cases, proximity and continuity will be prioritised, thanks largely to DfE reforms in 2013 to reduce the number of children placed at a significant distance from their home.

“In practice, each service will have a variable level of success, cost and effectiveness,” it states. “In particular, placements will vary in both their general quality, as well as their suitability for a given child. The result is a wide diversity of different placement types. How these are distributed has been fairly consistent over the past five years.”

Placement sufficiency

Sufficiency is at the heart of the placement planning debate. Local authorities must ensure they can source sufficient care placements, preferably in their area and as close to the child’s home as possible, and that the providers offering those placements have the requisite skills to meet children’s needs.

Latest data from Ofsted on foster care placements shows that on 31 March 2019, there were 88,370 fostering places available, an increase of one per cent over the year. Of these places, 54,870 were filled, a rise of three per cent over the year. Local authority foster carers provided two-thirds of places and independent fostering agencies (IFAs) the remainder.

The largest six IFA providers own a large portion of that market – 38 per cent of all IFA places, although this has fallen from 44 per cent in 2018.

After three years of decline, the number of fostering households increased by two per cent to 44,500, a third of whom are approved to care for two children. However, campaign organisations such as the Fostering Network warn that there is a shortage of foster carers with the skills and experience to look after the growing number of children with high levels of trauma. The National Association of Fostering Providers has also warned that Covid-19 could compound the shortage.

IFAs tend to provide higher allowance payments and more support and as such are often turned to by councils when struggling to place children with the highest levels of need. This is either through a framework agreement where the council agrees to purchase a number of places from an independent provider over a set period of time or, increasingly, on a “spot contract” basis – where the council looks to place an individual child when the need arises.

The NAFP says this latter approach by commissioners “makes for an inefficient and unmanaged sector economically” because the unpredictable nature of this makes it hard for IFAs to plan for the long-term and recruit more carers. In a 2018 report, the NAFP called for council commissioners to move to a form of block contracting.

“Traditional block contracts move the occupancy risk away from the provider and onto the purchaser,” they state. “There are clear examples where that shift has resulted in better outcomes for children allied to lower prices for the purchaser and stability of income for the provider. A clear win-win-win situation.”

However, in recognition that council commissioners are sometimes put off block contracts because of the risk they may end up paying for unfilled places, the NAFP proposes the development of “soft block contracts” to help “manage that risk” by introducing more flexibility into the contracting process between IFA and commissioner.

“Through thoughtful analysis of the elements of current contracting practice, it is possible to engineer a new form of block contract that gives all parties the opportunity to manage any anxieties they may have about the commitment they may be making,” it adds.

One way of measuring the success of placement planning is how often a child experiences an unplanned move. During 2018 to 2019, the proportion of fostered children who experienced an unplanned ending decreased from nine to seven per cent. Children placed with local authority foster carers were slightly less likely to experience an unplanned ending compared with children placed with IFA carers. However, Ofsted raised concerns over a rise from 21 to 31 per cent in the proportion of fostered children who experience at least one move within 24 hours of the decision to end the placement early.

The picture for children’s homes is similar to the one for foster care. The number of children’s homes rose six per cent last year, although there was only a one per cent rise in the number of beds, continuing a pattern over the last three years of the number of homes increasing at a faster rate than places. However, the increase is not evenly spread across the country with the North West seeing an 11 per cent rise but the South East recording a three per cent fall.

For commissioners, this uneven regional distribution of placements has resulted in places costing more in parts of the country where they are at a premium. It has inevitably seen some authorities, predominantly in London and the South, place more children in other local authority areas. Ofsted notes that “this includes some children being placed a long way from their original homes, especially children from the South West and London”.

A large children’s homes provider is one that owns 10 or more homes. On 31 August 2019, there were 35 large children’s homes providers, which owned 47 per cent of all private or voluntary-run homes. Their market share has remained stable since 2018, although it again varies across the regions.

The growth of large independent providers, particularly in some parts of the country, has made placement planning harder for council commissioners. Larger providers tend to charge higher rates, which, when combined with rising children’s needs, is a factor in councils spending £1bn on independent children’s residential care last year, compared with £778m with IFAs, according to Local Government Association figures (see graphics).

Faced with this difficult economic situation, councils have sought alternative approaches to ensuring sufficiency including increasing their use of unregulated semi-independent accommodation for 16- and 17-year-olds who require supervision but not care. These placements can be cheaper and offer councils another option – particularly as some IFAs and residential settings will not take 16- and 17-year-olds with complex needs – but their use has been criticised by campaigners who argue that such settings are unsuitable as all under-18s require care of some description. A government consultation on their use promises to produce improved standards of settings and greater clarity on when they can be used (see practice example).

Councils have also developed step-down programmes where children in residential care are able to move to foster placements with intensive support put in place. These are cheaper and focused on better preparing young people for moving to independent living (see practice example). In addition, some councils have begun investing in their own provision again in an attempt to reduce their reliance on independent providers and their exposure to market forces.

The commissioner's dilemma 

The overriding consideration when commissioning a care package is to identify the placement that best meets a child’s needs. The rise in the number of older children in care in the past five years could explain the growth in the use of residential care placements over that period. After many years of austerity, the past year has seen council expenditure on children’s social care rise by £500m to a total of £9.4bn, £800m above budget.

While this is partly due to a rise in the number of children in the system, figures from the Independent Children’s Homes Association (ICHA) shows the additional expenditure is also translating into higher rates for residential care providers. Its State of the Market survey 2020 shows two-thirds of providers reported a rate rise in 2019.

Previous ICHA market reports had highlighted the challenges operators faced in securing rate increases that reflected rising expectations on the quality of care being provided, which in turn strained relationships and proved a disincentive for providers to expand capacity.

This was reflected in ICHA’s 2018 report Onside on One Side, which highlighted the contradiction pushing care commissioning towards a crisis: where growth of placement supply cannot occur without expansion of providers’ current profitability, yet local authorities need to manage or reduce spending within a financial climate of austerity.

The paper advocates for a shift in the financial, emotional and professional environment that promotes “everyone working in a focused, child-led way”. This call for action echoed messages from the NAFP that there was too much of a focus in local authorities in making savings, with a risk that commissioners did not understand the cost-benefits of making child-led placements. The ICHA paper emphasises the impact on sufficiency of such procurement-focused commissioning practices.

Some commissioners argue that they recognise the dilemma all too well, but in the absence of transformative levels of funding, the best solution is to work in partnership with providers to develop a more intelligence-led system (see expert view).

There are signs things have improved in the past year. The 2020 State of the Market report found 39 per cent of providers reporting improved relations with commissioners and just four per cent a fall. The report also shows that there is an appetite among many providers to develop more long-term partnerships with commissioners with 47 per cent using framework agreements and a quarter open to developing block contracts or other options (see graphics). Report author Andrew Rome says developing partnerships will provide more stability for both councils and care providers but that for this to be effective it is best done on a regional or national basis where economies of scale can be achieved. This is already being tested with regional and national frameworks for unregulated provision (see practice example). A more stable commissioning relationship should improve outcomes for children.

ADCS VIEW: Outcomes at the heart of commissioning

Jenny Coles, ADCS president 2020/21 and director of children’s services at Hertfordshire

Local authorities are ambitious about providing high-quality services for children, young people and their families, but our ability to improve children’s experiences, and their outcomes, is being hampered by a sustained period of budget reductions coupled with rising levels of need in communities. There is wide variation in the scale of commissioning services across the country. For a while, greater outsourcing was pursued, but the pace and scale of change in society and in how public services are arranged makes innovation and change a necessity. Fixed contracting arrangements can make it difficult to flex and meet changing needs, so for some, there is a move towards bringing services back in-house.

Supporting children in care often involves a complex array of commissioning arrangements for care packages and placements. Consortia frameworks have become more sophisticated, but there is real variation in usage and approaches, which must be confusing for providers too. Children’s services have long operated in a mixed economy with private, voluntary and community providers being involved in the delivery of services locally, the entry of private equity into the provision of fostering and residential care placements is a source of worry. Multi-million pound mergers are commonplace and the speed at which acquisitions take place can make it difficult to understand lines of accountability. I hope this will be a key line of enquiry in the government’s forthcoming care review.

I’m hopeful that the collaborative working we’ve seen in response to Covid-19 could provide a platform for us and our partners to challenge and support each other to embed children’s outcomes at the heart of commissioning. One way we can do this is by involving young people in the process, from the initial scoping stage to assurance and evaluation. I would like to see some proactive support in joining up with health on this front. There has been hard won progress in some local areas, but we have not yet shifted the dial on systematic commissioning between health and children’s social care. The complex governance structures in health make things difficult, with some services being commissioned locally, regionally or nationally. Typically, NHS England commissions very specialist and costly services, such a Tier 4 mental health services, but this practice is not replicated by the Department for Education on secure welfare beds.

Although local authorities are the only purchasers of placements, it often does not feel like the power sits with us because we are in competition with each other. Successful commissioning depends on a clear assessment of needs, tangible goals and an outcomes framework, as well as regular monitoring and evaluation. Evidence has an important role to play in ensuring scarce funds are being used to greatest effect. Government has a role in helping to build the conditions for successful commissioning to take place, on this front there is more to do.

EXPERT VIEW: Regional and national commissioning is a must 

Andrew Rome, Revolution Consulting

Imagine a sector where the legal and commercial arrangements between local authorities and provider organisations have been established long before a placement-related decision has to be made; where long-term partnership agreements between the parties facilitate consideration and respect between the childcare professionals on all sides. Decision making around the child or young person would be entirely based on assessment of need, evidence, and the experience and know-how of those professionals.

Such long-term partnership agreement approaches should bring significant elements of stable income to service providers. Security and stability will result in the overall cost to purchasers being materially lower than current practices operating through volatile spot market conditions. This should be the goal of strategic commissioning.

Most single local authorities do not have the volumes of purchasing with individual providers to take this approach on their own. Regional contracts are likely to be the minimum level of demand aggregation, though national contracts should be contemplated for some services and relationships. Such aggregation also re-establishes some greater parity when public sector meets the largest of country-wide providers. Inter-authority collaboration to achieve this will see fully pooled budgets and resources and commitment with fellow authorities, with leadership from a national level.

EXPERT VIEW: Base procurement decisions on intelligence 

Toni Badnall, commissioning manager, Bedford Borough Council

One key message from providers is that greater strategic commissioning activity is needed – not just purchasing packages of care on a placement-by-placement basis but establishing a clear picture of future need for volumes, types and outcomes of placements.

A number of local authorities such as Essex and Suffolk are now making use of predictive analytics to forecast where children may be in need of early intervention, and this method can be equally well-applied to project and map demand for care placements.

Making better use of intelligence in commissioning strategies would enable both local authorities and providers to respond more proactively to demand. If we as commissioners know that over the next five years we will require, for example, 300 independent fostering agency placements, an average for how long these placements will last, and the levels of need carers must cater for, then we can make a business case for a longer-term commitment of resources or more stable contract. Even under a framework or dynamic purchasing system, clear and open communication of needs to the market offers security to providers wishing to develop their business to meet demand – and may provide the much-needed stability to avoid a crisis.

FURTHER READING

• State of the Sector, ICHA, February 2020
• Soft block contracts, Andrew Rome for NAFP, August 2019
• Onside on One Side: A New Future for Children’s Care Procurement and Commissioning, ICHA, November 2018
• Silent Crisis, Social Market Foundation, August 2018
• A Review of Commissioning Arrangements for Looked After Children in London: Final Report, Institute of Public Care, July 2018