Back in November 2021 we reviewed the Competition and Markets Authority's interim report into its market study into children's social care provision.
Now we have their final report. It comes in at a weighty 134 pages. The points in the interim report are echoed in this final report.
The CMA remind us that the market study was triggered by concerns that local authorities were too often unable to access appropriate placements to meet the needs of children in their care and secondly, that prices paid were too high, placing significant strain on budgets. This is a market affecting just over 100,000 children where the costs in England are £5.7bn per annum. In England the number of Looked After Children increased by 14% between 2016 and 2020 (see pages 28- 30, 33 and 35 – 36 for more statistics).
There is lots to take on board.
The CMA summarise their report as follows:
- There are significant problems in how the placements market is functioning (chapter 3, pages 40 – 57).
- A lack of placements of the right kind, in the right places, means that children are not consistently getting access to care and accommodation that meets their needs.
- The largest private providers of placements are making materially higher profits and charging materially higher prices than the CMA would expect.
- Some of the largest private providers are carrying very high levels of debt, creating a risk that disorderly failure of highly leveraged firms could disrupt the placements of children in care.
As a result they make three types of recommendations:
- To improve commissioning by having some functions performed via collaborative bodies, providing additional national support and supporting local authority initiatives to provide more in-house foster care (see pages 11 -17 and 58 – 86).
- To reduce barriers by reviewing regulatory (see paragraphs 56 and paragraphs 5.8 – 5.16, 5.21 – 5.31 and 5.37) and planning requirements and supporting the recruitment and retention of care staff and foster carers (see pages 17 – 20 and pages 87 – 112).
- To reduce risk of children experiencing negative effects from children’s homes, providers exiting the market in a disorderly way by creating an effective regime of market oversight and contingency planning (see pages 20 – 23 and pages 113 – 121).
They make it clear that whilst some respondents argued that the presence of for profit operators is inappropriate in itself, the legitimacy of having private provision in the social care system is one which is for elected governments to take a view on. The CMA have also decided against recommending steps like a Special Administration Regime or giving a regulator power to control the level of debt that a provider is permitted to carry.
Government is who many of the CMA recommendations are aimed– see paragraphs 4.71 (forecasting), 4.81 /4.82 (market shaping) ,4.83 (leadership and support), 4.91 (national contracts), 5.58 (planning) 6.17 (market oversight) and 6.27 (contingency planning).
The full set of recommendations are set out at chapter 7 (see pages 122 -134). Eight of these relate to England:
- Larger scale market engagement
- National support for purchaser engagement with the market
- Support for increasing local authority foster care
- Review of Regulation
- Review of planning
- Regular state of the sector review
- Monitor and warn of risks of provider failure
- Contingency planning
Many of the points made in the CMA report echo recent judgments; you can read our blogs on these judgments here and here.