Recommendations & Conclusions
6 items
15
Conclusion
61st Report - Financial sustainability …
Not Addressed
Local authorities and private providers face barriers and lack incentives to open homes and create places matching children’s needs at the scale required.35 The Association of Directors of Children’s Services told us that the distribution of residential provision is based on where it is easy to open a home, often …
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Local authorities and private providers face barriers and lack incentives to open homes and create places matching children’s needs at the scale required.35 The Association of Directors of Children’s Services told us that the distribution of residential provision is based on where it is easy to open a home, often where prices are lower, rather than where the need is greatest.36 The Children’s Homes Association told us that the barriers included property prices, salaries and workforce issues, alongside difficulties getting planning permission.37 The Department told us that it is working with the Ministry of Housing Communities and Local Government to address barriers in the planning system so the system works in a way that reflects where new homes are needed.38
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Government response AI summary
The response simply restates the committee's conclusion from a different section.
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HM Treasury
16
Conclusion
61st Report - Financial sustainability …
Not Addressed
Homes require qualified staff to operate, including a registered manager, with staffing a significant issue for residential care providers.39 The Children’s Homes Association told us that staffing costs make up 60-80% of operating costs.40 The Children’s Commissioner told us that some providers react to taking children with complex needs by …
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Homes require qualified staff to operate, including a registered manager, with staffing a significant issue for residential care providers.39 The Children’s Homes Association told us that staffing costs make up 60-80% of operating costs.40 The Children’s Commissioner told us that some providers react to taking children with complex needs by increasing staff numbers without evidence that it leads to better outcomes.41 In 2024, 13% of homes with unoccupied beds felt issues recruiting and retaining staff led to places being unfilled. At March 2025, 19% of children’s homes in England that were active or suspended did not have a registered manager in post.42 The Department acknowledged the challenge and the need for better training and skills, despite the residential care workforce growing from 39,000 in May 2023 to 46,000 in September 2024.43
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Government response AI summary
The response simply restates the committee's conclusion from a different section.
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HM Treasury
17
Conclusion
61st Report - Financial sustainability …
Not Addressed
The Association of Directors of Children’s Services described inconsistencies in capital funding, and competition between local authorities for funding, as barriers to creating homes where they are needed. Where one local authority might be delighted to win several million pounds to develop in-house provision, another will have lost out. It …
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The Association of Directors of Children’s Services described inconsistencies in capital funding, and competition between local authorities for funding, as barriers to creating homes where they are needed. Where one local authority might be delighted to win several million pounds to develop in-house provision, another will have lost out. It told us that it would be in the shared interests of local authorities to have consistency of funding, 33 Q 4 34 Cambian (CCH0006) 35 C&AG’s Report, para 2.13 36 Qq 2-4 37 Qq 4, 20 38 Qq 81-83 39 C&AG’s Report, para 2.14 40 Q 18 41 Q 19 42 C&AG’s Report, para 2.14 43 Qq 85-91 12 assured over multiple years.44 The Department told us that its capital programme has focused on areas with significantly fewer residential places or with specialist needs, and that it is engaging with local authorities and potential social investors to develop its approach.45 It lacks a national picture of capacity to tell whether the places created are where they are most needed.46 44 Qq 15-16 45 Qq 84, 92 46 C&AG’s Report, paras 9, 13 13 2 Addressing pressures on the residential care system Barriers to increasing foster care
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Government response AI summary
The Committee noted that the Association of Directors of Children’s Services described inconsistencies in capital funding as barriers to creating homes where they are needed. The government's response discusses providers of children’s homes not offering the places needed locally, but doesn't specifically address the funding …
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HM Treasury
20
Conclusion
61st Report - Financial sustainability …
Not Addressed
The Association for Directors of Children’s Services explained that there are barriers to increasing foster care numbers. This includes insufficient fees and allowances for foster carers, the need for foster carers to adapt their 47 Qq 26, 59 48 C&AG’s Report, para 2.7 49 National Association of Fostering Providers (CCH0003) …
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The Association for Directors of Children’s Services explained that there are barriers to increasing foster care numbers. This includes insufficient fees and allowances for foster carers, the need for foster carers to adapt their 47 Qq 26, 59 48 C&AG’s Report, para 2.7 49 National Association of Fostering Providers (CCH0003) 50 Qq 36, 59 51 Q 59 52 C&AG’s Report, para 2.9 53 Q 61 14 homes, and societal changes making it more unusual to have a non-working parent at home to provide care and more common for adult children to return to live with their parents.54
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Government response AI summary
The response simply restates the committee's conclusion.
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HM Treasury
21
Conclusion
61st Report - Financial sustainability …
Not Addressed
We asked the Department how it intended to overcome these barriers, and those of the cost of living, given these would not be addressed through the fostering hub. It told us that local authorities have a lot of discretion over the support they offer foster carers. It has seen, for …
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We asked the Department how it intended to overcome these barriers, and those of the cost of living, given these would not be addressed through the fostering hub. It told us that local authorities have a lot of discretion over the support they offer foster carers. It has seen, for example, local authorities provide small capital grants to allow for conversions and extensions of homes, or offer deductions on council tax. It is also expecting its pilot regional organisations to go further with the model of providing incentives.55 However, it told us it does not yet systematically encourage and direct local authorities in their approaches.56 Monitoring private providers
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Government response AI summary
The response simply restates the committee's conclusion.
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HM Treasury
24
Conclusion
61st Report - Financial sustainability …
Not Addressed
We raised concerns about the high levels of profits of some private providers.64 The Competition and Markets Authority found in 2022 that the fifteen largest providers of children’s social care had average profit rates of 22.6% for children’s homes, and that their prices increased by an average of 3.5% above …
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We raised concerns about the high levels of profits of some private providers.64 The Competition and Markets Authority found in 2022 that the fifteen largest providers of children’s social care had average profit rates of 22.6% for children’s homes, and that their prices increased by an average of 3.5% above inflation each year.65 The Association for Directors of Children’s Services and Children’s Homes Association told us private-equity- owned providers were a particular concern because they were more likely to have excessive profits.66 The Children’s Homes Association told us that most of the small, micro or SME practitioner-led homes do not make vast profits.67 We asked the Department whether suppliers were price gouging. It acknowledged that in some places suppliers make a significant amount of profit.68
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Government response AI summary
The Committee raised concerns about the high levels of profits of some private providers. The government's response notes that despite private providers providing most care home places, the Department does not fully understand their financial position.
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HM Treasury