Recommendations & Conclusions
14 items
1
Conclusion
61st Report - Financial sustainability …
Acknowledged
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Education (the Department) on the sustainability of children’s residential care.2 We also took evidence from the Children’s Commissioner, the Association of Directors of Children’s Services (a local government membership organisation), and …
Government response. The government agrees with the committee's introductory statement and outlines its ongoing decisive actions to address issues in the children's social care market, including £2.4 billion for early intervention, investment in fostering, creating over 600 specialist placements, and rolling out …
HM Treasury
10
Conclusion
61st Report - Financial sustainability …
Acknowledged
In recent years, the number of children reported to Ofsted as being placed in unregistered homes at some point each year rose significantly, from 147 during 2020–21 to 982 during 2023–24.20 More recently, the Children’s Commissioner found that as at September 2024, 775 children were in unregistered accommodation—around 10% of …
Government response. Acknowledges that placing children in illegal settings that are not inspected is unacceptable.
HM Treasury
11
Conclusion
61st Report - Financial sustainability …
Acknowledged
Ofsted cannot routinely inspect unregistered homes and local authorities are not obliged to inform Ofsted when they place children in unregistered care, even though it is illegal for providers to operate such homes.22 In such cases there are no formal checks to ensure that children receive high quality care and …
Government response. Acknowledges that placing children in illegal settings that are not inspected is unacceptable.
HM Treasury
12
Conclusion
61st Report - Financial sustainability …
Acknowledged
We asked the Association of Directors of Children’s Services how it could possibly be right for any local authority to place children in homes that are not inspected. It described this as a consequence of local authorities having an absolute duty to place young people who needed a home but …
Government response. Acknowledges that placing children in illegal settings that are not inspected is unacceptable.
HM Treasury
13
Conclusion
61st Report - Financial sustainability …
Acknowledged
The Department described the delays in Ofsted registering providers, and how this impacted the use of illegal provision. Changes to the law requiring the registration of those providing supported accommodation for 16 and 17-year-olds, strengthening oversight, led to a significant growth in home registrations and to delays. Ofsted has set …
Government response. Acknowledges that delays in Ofsted registering providers impacts the use of illegal provision.
HM Treasury
14
Conclusion
61st Report - Financial sustainability …
Acknowledged
There are disparities in the number and types of children’s home available in different areas across the country, particularly for children with more complex needs.29 For example, there are no secure homes across all of London, while South West England has disproportionately few homes with specialist provision for children with …
Government response. Acknowledges that providers of children’s homes are not offering the places needed locally, leading to children being placed in homes that do not meet their needs.
HM Treasury
18
Conclusion
61st Report - Financial sustainability …
Acknowledged
The Department told us that it sees reducing the need for residential care as key to addressing some of the drivers behind the increased cost. It plans to reduce the need by preventing children becoming looked after by a local authority, and then by increasing the availability of foster care, …
Government response. Acknowledges the Department is relying on there being more foster carers, but it has yet to address the significant challenges to increase numbers.
HM Treasury
19
Conclusion
61st Report - Financial sustainability …
Acknowledged
The Department has initiatives to increase foster carer numbers. It described, for example, launching 10 fostering recruitment hubs by 2024, covering around two thirds of local authorities.50 It explained that these hubs are boosting co-ordinated recruitment of foster carers between local authorities, and offering greater support for those becoming foster …
Government response. Acknowledges the Department is relying on there being more foster carers, but it has yet to address the significant challenges to increase numbers.
HM Treasury
22
Conclusion
61st Report - Financial sustainability …
Acknowledged
In 2024–25, 84% of residential care settings registered with Ofsted, including supported accommodation and children’s homes, were owned by private providers.57 The Department told us this accounts for 74% of residential care places, because privately-owned homes tend to offer fewer places than those run by local authorities and the voluntary …
Government response. Acknowledges that the Department does not fully understand the financial position of private providers.
HM Treasury
23
Conclusion
61st Report - Financial sustainability …
Acknowledged
As local authorities manage all provider contracts, the Department does not have direct visibility of contract and financial information. It does not fully understand what constitutes a reasonable price for residential care.59 The Department acknowledged that there is room to improve transparency and price sharing to strengthen the hand of …
Government response. Acknowledges that the Department does not fully understand the financial position of private providers.
HM Treasury
25
Conclusion
61st Report - Financial sustainability …
Acknowledged
The Department described the significant levels of profit for some suppliers as the reason it introduced provisions in the Children’s Wellbeing and Schools Bill for a profit cap.69 The Bill will also introduce a financial oversight scheme covering those providers deemed hardest to replace. The Department acknowledged that how it …
Government response. The Committee noted that the Department introduced provisions in the Children’s Wellbeing and Schools Bill for a profit cap and a financial oversight scheme. The government explains that the Financial Oversight Scheme will be established and will increase financial and …
HM Treasury
26
Conclusion
61st Report - Financial sustainability …
Acknowledged
When finding children’s homes places, local authorities must often look outside of their own area, putting them in competition with each other. Local authorities also often rely on finding places just at the time children need to be housed, rather than buying in advance. which can further increase competition and …
Government response. The Committee noted that local authorities often compete for available beds which increases prices. The government states it agrees with the Committee's recommendation and aims to implement the model nationally by Spring 2029, backed by over £10 million of funding …
HM Treasury
27
Conclusion
61st Report - Financial sustainability …
Acknowledged
The Department accepted recommendations to introduce regional commissioning made by the Competition and Markets Authority and Josh MacAlister in 2022. The MacAlister review recommended that local authorities should group together in regional organisations, taking collective responsibility for running public-sector residential care and fostering and for all commissioning.77 The Children’s Commissioner …
Government response. The Committee noted the Department accepted recommendations to introduce regional commissioning. The government states it agrees with the Committee's recommendation and aims to implement the model nationally by Spring 2029, backed by over £10 million of funding to support the …
HM Treasury
29
Conclusion
61st Report - Financial sustainability …
Acknowledged
The Department has not confirmed how it will test the full commissioning model, and stakeholders have highlighted the scale of change and the need for a strong evidence base.80 The Children’s Homes Association told us that it was unclear how regional care co-operatives would address barriers relating to property prices, …
Government response. The Committee noted concerns about testing the commissioning model and highlighted barriers related to property prices, planning permission and the workforce. The government states it agrees with the Committee's recommendation and aims to implement the model nationally by Spring 2029, …
HM Treasury