Debate News We welcome CMA diagnosis: government and children's sector must now learn and act Children England responds to the interim report of the Competition and Markets Authority on children's social care At Children England we have been reading and digesting the interim report from the Competition and Markets Authority since it was published last week. It reports on some of the most complex, systematic pressures and failures of the care currently provided for children – the ‘marketplace’ for placements - that we have been concerned about and urging reform in for many years. We welcome the interim report as a thorough, authoritative assessment of the state of the market and in their identification of a range of serious problems in it. The CMA identifies and evidences concerns that we have also shared and raised in evidence to them. These include: Insufficiency and geographical inconsistency of care for a rising care population, and acute insufficiency of certain specialist kinds of care Recognition that the growth in use of unregistered and unregulated settings is the outcome of a broken market system that won’t be solved (and could be made worse) by simply banning the use of it for under 16s Evidence of excessive profit-making by some care companies, which they describe as being higher than would be expected in a healthy competitive market Concerns over the debt levels underlying some large care companies, and the risks of any potential sudden business closures in what they would mean for children and the remaining sector Short-termism and systemic problems in longer term forecasting and strategic commissioning by local authorities, compounded by the lack of reliable council funding, and the impact of cuts to council spending power We appreciate the clarity of explanations of the complex dynamics and perspectives on both the intractable problems in the market, and possible solutions, without settling firmly or simplistically on any one answer. For example, while saying that insufficiency, forward-planning and market-shaping might be better addressed with a regional or national level body, the CMA also acknowledges that such reforms could create important negative trade-offs for the rest of the system, and particularly in how they could impact local co-ordination and practice. “While we are interested in exploring the benefits of carrying out some of the market engagement activities of local authorities at a higher scale of operation, we are also conscious that there could be trade-offs from reducing local autonomy, and the costs and benefits may vary for different functions. Some of these trade-offs may impinge on wider issues related to the effectiveness of the overall children’s social care system, but not related to the operation of the placements markets; policymakers will be better placed than the CMA to consider these. We recognise that the CMA may not be best placed to decide how these functions are best carried out, and we will explore what might be the most appropriate body to make such judgments.” We agree the seriousness of the problems caused by the market as it operates today means we should openly examine, and be able to debate, the potential benefits of new bodies and structures, while being careful to consider different views, alternatives and negative or unintended impacts at the same time. We look to the Care Review team for the facilitation of such an open, inclusive and mature sector-wide dialogue about potential reform ideas over the next phases of their work. We found it particularly helpful that the CMA clarified the limits of their role and remit regarding children’s care services. In particular they have made very clear that some vital matters and decisions are not for them to determine, and are matters for elected governments and representatives – such as the vexed question of whether profit-making should continue to be permitted in the care system. “Ultimately, we recognise that decisions around the appropriateness or otherwise of having services operated by the private sector are rightly for elected representatives across the UK to decide.” Over the decade of work that we have researched, discussed and developed on ‘care markets’ we have always returned to the fact that children require strong national leadership to grasp the problems, inadequacies and human damage caused by the way we currently provide and procure care. When the CMA launched their investigation we wrestled with the apparent affirmation that care for children is properly understood as a ‘market’ (when our values and beliefs tell us it should not be). However, we hoped that their expertise in market analysis might at least confirm that it’s a deeply dysfunctional market, in which children pay the price for systemic failures. And we hoped the CMA might use its authoritative role to tell the children’s sector, and the government responsible for children in care, that we need to work together in addressing these. This interim report from the Competition and Markets Authority appears to live up to our hopes for what was needed, while leaving the room and responsibilities for deciding the right paths clearly where they belong – in public hands, and policy-makers’ roles, rather than market forces. It rightly poses important questions as to how funding, regulation and governing structures can work to re-distribute power where it works best for children. While we look forward to the final report of the CMA in March next year, it is urgent that the Care Review and the children’s sector explore these issues now. We are committed to playing an active role in the dialogue that must follow from this interim report – with the CMA itself, but especially with colleagues across councils, care providers and government, as well as children and young people themselves.