Children England responds to the publication of two reports on the children's care 'market' published Friday 29th January by the Local Government Association 

Children England welcomes the Local Government Association’s publication of two complementary reports illustrating in their different ways the profound precariousness of the 'market' of children’s social care, and the reasons why we should not expect market forces to deliver on society’s duties to children.

This new, updated analysis of the finances of the largest care providers shows growth and consolidation that is strengthening the cartel of the largest, private equity funded companies, even as the debts of individual companies rise. With more children needing care from the state and profits still increasing among those with the largest market share, care providers may be attractive to lenders, but the report paints a pretty ugly picture.

With local authorities already 'overspending' by £3 billion on children’s services over the past five years, and facing future funding shortfalls in the absence of sufficient central government investment, the only paying customers of this cartel (councils) cannot keep up with rising costs, and it is children who are paying the real price.

The largest private care providers made £219 million in profit last year, while the councils responsible for children in care struggled to even balance their books. That’s how chronically unsustainable this market is.

The Local Government Association’s other report published today, on the barriers to improving the dysfunctional market in children’s homes, is also helpful. We would emphasise our repeated warning that efforts to simply make the market behave 'better' - whether by making it easier to enter, reducing overheads or mitigating risk - will not ensure it treats children better.

Children England supports the call of the LGA for proper national oversight of care provision, and has described both the systemic issues and possible solutions in previous papers and statements.

It is imperative that the Care Review tackles the care market head on - and that means going beyond what would improve the market to accepting that it is inherently the wrong mechanism for ensuring children receive the care they deserve. But urgent action to start to reverse the worsening financial and power dynamics reported by LGA shouldn’t be left until the review reaches its final conclusions either – neither councils nor children can afford to wait that long.

For further information, please contact:

Chloe Darlington, Policy and Communications Manager 07980 262611