Policy and practice Reports and research Correcting a history of market failure (2014) If a ‘public sector market’ could be said to exist wherever there is a regular exchange of funds and case referrals between the state and non-statutory organisations, then residential child care is by far the oldest public sector market in Britain. Centuries before the creation of formal statutory duties to protect and care for children in need and at risk, charities were looking after children in practical and financial collaboration with the relevant local town, community and church bodies, and royally-appointed authorities of their time. Children England was founded in 1942 by the leading voluntary child care organisations at the time, to strengthen the collective voice and share the learning of those charities that already had between them many centuries of expertise, assets, resources, and passionate commitment invested in the mission of looking after children who could not be with their parents. Voluntary sector organisations were without question the predominant type of child care provider, complemented by that time with a growing range of state owned and run services. The voluntary sector, it could be said, had the lion’s share of the residential care ‘market’ – to use today’s terminology. Fast forward 70 years to 2014 and very few voluntary sector organisations remain ‘in the business’ of providing residential care for children at all. Commercial private companies account for around three quarters of homes; state-run providers just under a quarter; and a vanishing proportion, around 2% – some highly specialist in nature – are now run by charities. Philanthropic giving to ensure that there is good residential care for children who need it has largely become a thing of the past. In early 2013, Children England started to talk with some of its members and commissioned a series of thinkpieces on residential child care. We felt it was vital that we should bring our distinctive historical roots back into modern debates and dilemmas facing the care sector. We wanted to ‘fill in the gaps in the story’ of more than a century during which the voluntary sector went from being the inventor, innovator and owner of most of Britain’s residential child care sector, to being a proportionately tiny, and often ‘niche’ competitor today. We have not looked to our history out of nostalgia for a utopian past when everything was right in the world of residential care. We know, perhaps better than any other sector, that there has never been such a time – indeed we know that such a historical perspective will also raise critical questions about some of our sector’s actions along that historical pathway. Rather we have looked to our historical role in the care sector in order to assess how we could possibly have got to the current state of affairs, in the hope of sharpening our collective eyesight and our observations as the nation discusses the future of residential care. This paper has been prepared to frame discussions with key decision-makers in today’s reform agenda for residential care, based on the issues, ideas and questions that have arisen from our analyses. It does NOT represent an agreed collective view from all Children England’s members – rather the views of its Chief Executive who has written this paper, informed by dialogue with a selection of its members and other sector leaders. Download the full paper: Correcting a history of market failure.