Source · Select Committees · Public Accounts Committee
Recommendation 26
26
Acknowledged
Competition among local authorities for children's home places drives up costs significantly.
Conclusion
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 therefore the prices they have to pay.73 The Association of Directors of Children’s Services recognised that local authorities often compete for available beds which increases prices.74 That has contributed to the exponential increase in the cost of residential care, which almost doubled over five years to £3.1 billion in 2023–24. Over the same period the average local authority spend per child increased to £318,400, from £239,800 in 2019–20.75 We received written evidence from the County Councils Network which stated that to balance budgets and meet increased demand, councils had been forced to reduce non-statutory services including those which may help avoid children needing care.76
Government Response Summary
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 to support the setup of up to six new RCCs in 2026.
Government Response
Acknowledged
HM Government
Acknowledged
6. PAC conclusion: The Department has failed to address the problem of local authorities competing for places and the effect that has on driving up costs. 6. PAC 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 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2029 6.2 Every child deserves safe, high-quality care close to home. Regional Care Cooperatives will make this a reality by transforming the children’s social care system into one that is coherent, collaborative, and sustainable. 6.3 RCCs will harness the collective buying power of individual local authorities (LAs) and allow them to gain economies of scale. By pooling resources, improving forecasting, strengthening multi-agency collaboration, building expertise and capability and acting collectively as a single customer and provider, RCCs will transform care available for children. 6.4 In 2025, two RCC pathfinders were launched in Greater Manchester and the South- East. Ecorys UK have been commissioned to carry out an independent evaluation of the two pathfinders. The first report was published in 2025 and highlights the high potential of the RCC model. Learning from the pathfinders, the department now intends to accelerate the rollout of RCCs. 6.5 The department’s vision is for every LA to be part of an RCC. The department wants to work in partnership with local areas to drive forward the development of RCCs quickly. On 4 February 2026 the department publicly set out its vision for RCCs, building on the pathfinders. Following this, an Expression of Interest will be launched in Spring, backed by over £10 million of funding, with the expectation to be able to support the setup of up to six new RCCs in 2026.