Foster care market ‘in crisis’, Notts service director says

A council director has described the foster care market as ‘in crisis’ after an investigation found some private-sector companies are recording a 20-33 per cent profit rise on placements for looked-after children.

Tuesday, 23rd November 2021, 8:37 am

Nottinghamshire Council’s finance committee chairman spoke last week about recruitment issues for in-house foster carers, causing the authority to look towards private agencies for its most vulnerable children.

Now concerns have been raised after the Competition and Markets Authority, a Government-backed agency, lay bare the stark challenges faced by councils in funding children’s social care.

Colin Pettigrew, council corporate director for children’s services, told councillors some local authorities are seeing costs for a residential placement surge due to a reliance on the private sector.

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Nottinghamshire Council's headquarters in West Bridgford.

It comes as the council recorded a 2.4 per cent overspend in its children and young people’s budget, equating to £2.2 million, relating to issues with placements for looked-after children in the county.

The average cost for an in-house placement is £4,000 each week, or £210,000 per year, but Mr Pettigrew spoke of his concerns private companies are making a ‘high level of profit’ from the placements.

One council in the East Midlands, he says, was quoted £45,000 per week for one placement – equating to £2.3m per year for a single child.

The CMA investigation, Mr Pettigrew said, found the private sector is ‘providing too few places at too high a cost’, and he told councillors he, too, has concerns about the ongoing picture in care.

He said: “I think the market is in crisis, that’s the finding of the CMA and the independent review into children’s social care.

“There is a high level of profit in that the CMA saw a range of 20 and 33 per cent profit margins in looked-after children.

“People may have a view as to whether anyone should be making that level of profit.”

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The council confirmed last week it plans to ramp up its recruitment drive for in-house foster carers, which would provide ‘better outcomes’ for looked-after children than the private sector.

It comes as the CCN, a collective organisation of upper-tier authorities, warned major reforms and extra funding are needed to prevent a surge in the number of vulnerable people being placed into care.

The organisation believes this figure could reach almost 100,000 by the middle of this decade, up from 69,000 in 2015.

Council figures show the county has 993 looked-after children requiring care, with the authority needing to find 554 placements since April 2021.

Speaking in the finance committee, concerns were raised about private sector ‘profiteering’.

Coun Tom Hollis, member for Sutton East, said: “We don’t want to see profiteering in children’s services, and when you see numbers like 20-33 per cent, it’s stomach-churning.

“We could be making better bang for our buck and they shouldn’t be making a profit from a service we have to provide.”

Coun Mike Pringle, member for Ollerton, said: “I recognise demand will increase, so the profiteers will increase their profit, but there is something wrong here.

“Service provision should be the pride, we shouldn’t be talking about profit as it’s unbelievable.

“It is wrong using children as profit.”

Coun Richard Jackson, committee chairman, reaffirmed the council’s ongoing campaign to boost its in-house foster care numbers, which he says will bring down costs and support vulnerable children.

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