Recommendation 6

The Department has failed to address the problem of local authorities competing for places and the effect that has on driving up costs. A mismatch between the availability and demand for residential home places means local authorities compete for places, particularly when homes need to be found at the last minute. This has contributed to the exponential increase in costs, with residential care costs in England almost doubling over five years to £3.1 billion in 2023–24. Local authorities’ average spend per child had increased to £318,400, from £239,800 in 2019–20 (both figures in 2023–24 prices). Previous independent reviews in 2022 had recommended setting up regional bodies working together to collectively identify and plan for the places needed, as well as to create and commission places. This would help local authorities plan and smooth out volatile levels of demand. The Department accepted these recommendations. However, it has introduced regional cooperation pilots slower than planned, and these pilots do not test the full range of commissioning powers recommended. Stakeholders have identified concerns with regional commissioning, including how this would impact local authorities’ statutory responsibilities to support looked-after children, and the current model does not test the regional creation of places. It remains unclear what model the Department will introduce nationally or when, with its own documentation suggesting it could take ten years. It has offered some other commercial support to local authorities but has yet to determine how this will be rolled out more widely. recommendation The Department should clarify, as part of the Treasury Minute, the principles behind the collaborative regional approach it is working towards, by when it expects to implement its model nationally, and how it will support local authorities in the meantime. 6 1 Caring for looked-after children Introduction