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Children’s Homes and the Role of the Private Sector

EHP Consultancy

Portfolio for legislative and regulatory compliance, commercial knowledge, operational and strategic governance & management in children & social care UK

Children’s Homes and the Role of the Private Sector

A recent study by researchers at Oxford University (Outsourcing and Children & social care:

A longitudinal analysis of inspection outcomes among English children &homes and local

authorities - ScienceDirect) has been reported in the Guardian’s editorial. (The Guardian view

on outsourced children’s homes: the wrong model | Editorial | The Guardian ).

The study suggests the ‘outsourcing’ of provision to the private sector generally fails to meet high

service quality of care. The paper calls for substantial long-term planning and that the future of

children’s social care should include local authority ownership.

However, it is clear that the focus of criticism are predominantly the larger providers, i.e. the 15

largest providers often being used as an example: not the individual small homes that are being caught up in the net.

The Guardian’s article in particular again raises the issue of children being placed outside of their

home support networks, (although fails to acknowledge that for many children, this is for

safeguarding reasons.) It also, raises the issue of ‘excess’ profit margins.

In previous blogs, EHP Children’s Homes Consultancy has reported on the Competition and Markets Authority (CMA) investigation. However, the CMA stopped short of recommending any end to ‘for- profit’ provision or price caps. The sector now awaits the investment of £200m in a series of pilot projects, including regional commissioning hubs, to “strengthen councils’ position

relative to suppliers.” It will be interesting to see how such recommendations will improve the & position’ of local authorities – and in fact, what that actually means.

At EHP Childrens Homes Consultancy, we place emphasis on the provision of placements for children within their own local area where possible. Also, on a sustainable and transparent business model that stands up to scrutiny – including any criticism regarding profit margins. Regarding the latter, financial margins are of course necessary and generated through re-investment back into the service to improve provision – the Guardian article fails to acknowledge this. Such re-investment held in children’s homes’ accounts also provide the necessary funding should the home encounter significant financial problems, i.e. to enable the cost of the home to be sustained while appropriate alternative placements are found for the children/young people: considering ‘disorderly exit’ has been a criticism of some (large scale) providers (and understandably so in some cases), this is an issue that should be acknowledged.

We also suggest improved (regional) professional relationships between smaller homes and their

local authorities. Other areas that we believe should be a focus for the sector, rather than just the

criticism of private investment, is the role and performance of Ofsted (i.e. not only its criticised role in Education as recently reported in the media), and the professionalisation of the care workers’ labour market with a development and salary framework comparable with the NHS.

One issue from the report regarding location of homes and new suppliers gravitating to areas where property and salaries are less expensive appear to be a cause for concern (albeit not one experienced by EHP Children’s Homes Consultancy). The Guardian states Blackpool has 40 children’s homes where London has 146, i.e. disproportionate ratios to population. However, it is not the private providers that place children – but the local authorities. Therefore, such placements are very much in the local authorities’ control, and an area where they could take responsibility to influence the marketplace to encourage greater geographical spread.

The Guardian article suggests what is needed is a long-term plan to develop alternatives, which could include not-for-profit as well as council-run homes. However, it does not suggest where the funding would come from for either. In our view, a model of not-for-profit homes and the subsequent withdrawal of private funding from the marketplace will simply make the situation worse, not better. We anticipate this to be the case in Wales and Scotland should they choose to go ahead with this strategy.

At EHP Children’s Homes Consultancy, we support new providers in an ethical approach to children’s social care – while understanding investors are running a business - and investment requires returns. However, this is not done at the expense of the EHP architecture to deliver a model for high quality care through policies, processes and most importantly, practice.

Is your consultant continually ‘horizon scanning’ to keep your potential business up to date?

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