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Children England is the membership body for children’s charities, first founded in 1942 as 'The Constituent Societies of the National Council of Associated Children’s Homes' For nearly 80 years we have had an overview and detailed understanding of the services, conditions and systems affecting care for children, and we have a body of significant work over the last decade in particular that we believe is essential reading for the CMA in its important new inquiry.

Theme one: Nature of supply

1. How has the provision of children’s homes, unregulated accommodation and foster care for looked after children developed over time, what has driven this development and how will the wider environment shape it in the future?

Given that our organisation was founded in the 1940s as the collective body for charitable children’s homes at the time, Children England has always remained deeply concerned with the state and quality of care provision for children, even though charitable provision has shrunk significantly over the decades, to account for only 2% of all children’s homes today. We produced a historical analysis of how we ended up with the 'market' for children’s homes that we see today, and the nature of that market, in 2014 – called Correcting a history of market failure.

This includes examination of:

• the nature of care for children as a ‘public good’ (and therefore, already, a ‘market failure’);
• consideration of what type of inherently dysfunctional market has been created (at first we considered it an oligopsony, and later, in other documents we share in this submission, we were persuaded that it is a monopsony);
• the complete lack of market regulation, national planning or oversight (as opposed to service regulation, of which there is plenty)
• the reasons for widespread withdrawal of charities from their former dominance in children’s home provision, and how private sector provision grew into the spaces left by that withdrawal
• the irreconcilable distortion created by the ‘customer/consumer’ split in market approaches to children’s care
• the systemic forces, and negative views about children’s homes, that mean reliance on a competitive market approach will always fail to deliver optimal outcomes

That paper also makes recommendations for a long-term national strategic approach to addressing the problems of the whole care sector needed for children in care, spanning kinship care, foster and residential care, as well as adoption. We worked on our own ideas about what that national approach (and a new national market reform/regulation body) could look like, in our 2016 discussion paper Children in Charge: imagining systemic reform and redesign in children’s care commissioning. 

Our CEO also wrote a book chapter charting the history of the development of 'public service markets' and analysis of their inherent market structure, in the book published in 2016 by Triarchy Press Kittens are Evil: Little Heresies in Public Policy. In it she describes why and how competitive approaches to the procurement of public service lead inevitably towards market collapse, or to the formation of new provider cartels and monopolies, which is what we believe we are now seeing today in the significant growth of a small number of the largest equity-financed care companies, which in turn creates ever-present market pressures towards mergers and acquisitions of smaller companies and other types of provider who struggle to ‘compete’ with the giants. That chapter is here: Public Service Markets Aren’t Working for the Public Good… or as markets.

 

2. Are there significant differences in how providers operate, depending for example on the type of provider they are, their size or the geographic region in which they are operating?

As the membership body for children’s charities we believe it’s really important to stress the vital distinction between charities and private firms and private equity. No charity has any shareholders and by law all of their funds and assets must be devoted to the children and families they serve, rather than extracting profits, dividends or other private financial benefits from the work they do with councils to care for children.

Thirty years of the commissioning marketplace has rendered this important distinction almost invisible by suggesting it doesn’t matter who provides care as long as they can compete in a ‘level playing field’. But it does matter who provides, and how they make their money. The ‘market’ is not a level playing field for charities any more than it is for small local providers trying and struggling to compete with the most profitable giants.

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