Commissioning Care – Research evidence: Sufficiency report

What Works for Children’s Social Care
Tuesday, June 21, 2022

This report provides analysis of all up-to-date local authority sufficiency strategies with a focus on identifying the main perceived challenges for councils to meet their sufficiency duty, what actions are being undertaken or planned to improve commissioning outcomes, and perceived negative consequences associated with using certain commissioning or market shaping approaches.

The sufficiency duty requires authorities to do more than simply ensure a sufficient number of placements be provided. Picture: NDABCREATIVITY/Adobe Stock
The sufficiency duty requires authorities to do more than simply ensure a sufficient number of placements be provided. Picture: NDABCREATIVITY/Adobe Stock
  • What Works for Children’s Social Care (March 2022)

This work was commissioned by the Independent Review of Children’s Social Care. What Works for Children’s Social Care analysed 81 sufficiency strategies covering 84 English councils.

It is known that commissioning practices vary across authorities, but how specifically they are addressing these challenges and engaging with the residential care market is not well understood. Research by the Local Government Association in 2021 identified sufficiency – the ability of councils to secure suitable accommodation and care that meet the needs of children in care – to be the main problem facing children’s residential provisions.

This is often attributed to poor co-ordination between councils and providers and issues related to the severe lack of residential supply. Several commissioning innovations and frameworks have been developed such as regional and sub-regional frameworks to address this problem and to help authorities access the residential provisions they need. However, the success of these efforts to improve commissioning outcomes is currently unclear. Moreover, little is known about what other activities are being employed by councils to ensure sufficiency, and to what extent commissioning innovations and frameworks have supported authorities to achieve better outcomes for children.

Meeting the ‘sufficiency duty’

Section 22G of the Children Act 1989, which was amended by the Children and Young Persons Act 2008, requires local authorities to ensure sufficiency of residential social care provisions within their area to the extent that this is “reasonably practicable”.

The sufficiency duty requires authorities to do more than simply ensure a sufficient number of placements be provided. Placements and care support must meet the needs of children, and authorities must have regard for the quality, location and type of provision.

The 2010 statutory guidance considers commissioning and market stewardship as the key mechanisms through which to ensure sufficiency and improve outcomes for children. To monitor sufficiency, the guidance reports that inspectors are required to evaluate evidence which “[…] specifically includes commissioning strategies relating to looked-after children.”

These plans are typically formulated in sufficiency strategies and statements, which are also evaluated by Ofsted when inspecting local authority children’s services.


Researchers searched local authority websites to retrieve all publicly available sufficiency strategies. Strategies were considered “up-to-date” if the expiry date was at the end of financial year 2020/21 or later. In total, 103 strategies were identified through this process, 72 of which were up to date. Researchers emailed 76 authorities whose individual or joint strategy either was out of date or not publicly available, receiving 11 strategies (representing 14 authorities) in response, of which nine were up to date. This created a sample of 81 sufficiency strategies covering 56 per cent of authorities in England at the end of 2020/21.

Results – pressures


Of the 81 sufficiency strategies, 34 reported a change in the local demand for children’s residential care. Of these, 56 per cent reported that demand went up, 24 per cent reported demand to decline, and 21 per cent reported demand to be stagnant or to fluctuate too much to assess the direction (see graphics). In total, 17 sufficiency strategies characterised demand as acute. Factors influencing demand for residential care included: increasingly complex needs of children in care and a lack of fostering capacity – some described both pressures happening simultaneously.

Supply and access

Few strategies provided an initial assessment of whether they have enough residential places to accommodate the number of children in care requiring a residential placement. In total, 23 of the strategies provided either a clear statement of whether they were over- or undersupplied, or numerical information on the number of places and placements. A further nine strategies stated they were experiencing “insufficiency” or that demand for residential care was exceeding supply, but this was often described in general terms without much detail on factors driving this.

Of the 23 strategies that provided information on both supply and demand, 14 reported having a surplus of residential places within the authority, whereas the other nine reported that they did not have enough local places to meet demand.

Local provision

One or more barriers to accessing local supply were reported by 25 sufficiency strategies. Of the strategies that reported on this, the most commonly mentioned barriers included competing with other councils for placements, practical difficulties of not being able to match a referral to the available local vacancy, and so-called “bed blocking” by reducing the utilisation of supply due to high-need placements.

Another aspect of the sufficiency duty is whether the provision in an authority meets the specific needs of its children in care. In total, 23 sufficiency strategies identified at least one reason for why their local supply of residential care was not entirely able to meet demand. Reasons mainly related to issues with the type of provision available locally. For example, 18 of the 23 strategies described local provision was unsuited to accommodating emergency, specialist, or therapeutic placements.

Costs and expenditure

The cost of residential care was discussed in more than half of the sufficiency strategies, but price trends were only discussed in 12 out of the 47 strategies providing information on costs. Of these, seven reported an increase in average prices, four reported fluctuating or stable prices, and one reported a decrease in average pricing. Nine strategies discussed trends in overall expenditure on residential care. Eight of these reported spending more than in previous years on these provisions, and seven even reported exceeding their budget.

One of the most mentioned factors impacting on costs were children in need of expensive placements with high staffing ratios and capacity to meet complex therapeutic needs. Even though this often only involved a low number of places, this was reported to substantially impact the overall budget.

Results – efforts to achieve sufficiency


In total, 33 sufficiency strategies used and presented forecasting estimates to inform their strategy, and 20 reported doing this specifically for residential placements or costs. In eight of these 20, the forecasting on residential placements was calculated based on existing data and using a transparent methodology, whereas this was unclear for the remaining strategies.

Commissioning frameworks

Most sufficiency strategies reported using at least one commissioning framework. These were typically regional or sub-regional membership networks which enabled access to providers using a transparent and shared contracting framework. The main reasons for being part of a framework were to ensure sufficiency (for example by accessing independent providers and ensuring more stable placements), achieve better value for money (for example by improving market leverage and purchasing places at more consistent prices), improve information sharing among the authorities subscribed to the same service, and to reduce the reliance on spot purchasing. However, numerous authorities found that being part of a commissioning framework did not enable them to secure local placements nor to achieve sufficiency. This was often explained by local providers not being signed up or not participating in the commissioning framework.

Market shaping activities

Three-quarters of the sufficiency strategies discussed at least one market shaping and/or engagement activity. This usually entailed hosting provider events and forums, in order to foster better relationships and information sharing between providers and authorities.

Of the 60 strategies reporting on this, a quarter wanted to create new independent supply locally and 13 per cent wanted to access existing local supply. Meanwhile, 13 strategies reported that better monitoring, quality assurance, and information sharing practices were needed in order to meaningfully shape the market. Specifically, authorities wanted more information and monitoring data about the outcomes of residential placements.

Reduce demand and increase supply

Half of sufficiency strategies described plans to actively reduce demand for residential care. This usually involved activities such as the recruitment, retention and development of foster carers to ensure there are carers suitable for children with more complex needs, and to enhance “edge of care” programmes or alternatives to residential placements. Some of these approaches were already reported to have produced positive results.

A total of 36 strategies reported developing new residential supply. Some of the approaches underway included increasing capacity but also reconfiguring in-house provision to better meet the needs of children. For example, Bristol reported replacing larger homes with smaller establishments to provide a more adaptable offer to meet complex needs.

One frequently cited area for development was block contracts, which was discussed in 21 strategies. These were commonly highlighted as a promising approach to improve access to local provision and several authorities reported that this enabled them to achieve more local placements (see practice example p34).

Reducing costs

A third of sufficiency strategies reported an action plan on how to reduce costs or optimise expenditure. This was usually through reducing placement costs and improving commissioning processes. Many authorities considered it a priority to reduce the number of high-cost placements – this involved retrospective activities, such as reviewing expensive placements, renegotiating contracts, and changing the care package.

Implications of findings

One recurring barrier to councils achieving the desired level of sufficiency is the location of placements. Authorities are consistently aiming to place children close to their homes, as this is considered integral to children’s wellbeing, cheaper, and is also part of their sufficiency duty. However, it is not currently possible, because each authority is competing with other authorities for a scarce number of children’s home places. The market currently leaves many councils struggling to access local placements, even before competition from other areas is taken into account.

One of the main areas for improvement, indicated by many of the authorities themselves, was in forecasting and planning for future provision. Here, difficulties in having the resources to perform quality analysis of universally collected data may soon be alleviated by the ‘Demand Modelling Tool for CLA Placements’ recently released by the Data to Insights team. However, improved data alone will not improve commissioning outcomes.

Local authorities are working to overcome their sufficiency challenges in many different ways. From methods of increasing the availability of residential home placements to improving value for money or reducing the number of children requiring residential care. Several described their own unique (but often untested) commissioning responses. This variation in commissioning approaches provides an opportunity for further research evaluating the outcomes associated with different approaches.

Read more in CYP Now's Commissioning Care Special Report

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