In a report published earlier this year, the Competition and Markets Authority highlighted that there had been a rise in the costs of placements of 29% from 2016 to 2020, with some councils paying up to £1m a year for a single placement for a child with complex needs.
Additionally, these findings show the profit margins for these providers averaged at a staggering 22.6%. This has meant that local councils have had to spend a high proportion of their budget to ensure young people and children are placed into appropriate care.
To combat this, the Welsh government are committing to ‘eliminate private profit from the care of looked after children’ over the next five years. Although Wales has not yet stated how they will achieve this outcome, the core objectives are to remove profit from:
This means Wales wants to move to a care system that is fully provided by local authorities with the majority of care placements being in-house. In their view, this will provide more control and oversight over where children are placed; with the aim of tailored care provision for each child, keeping children closer to home, and increasing their voice within the process. But by going purely ‘non-profit’, does this solve what they are intending?
There have already been concerns from the Welsh community of Directors of Children’s Services that private-led placements in Wales may choose to go across the border if they are not able to operate in Wales. This could in turn mean that there are fewer placements available for children and young people. Unless Wales are planning to buy-out all private-led placements – which will have a high cost attached – a deficit in placements for children may occur.
While these objectives are in line with the consensus (that making profit from children’s placements is immoral) there is no certainty that a move to this model will improve the outcomes of children and their families. Will placements be of higher quality? Will it reduce costs in the longer-term? How will young people and children’s outcomes be monitored effectively and efficiently?
The shift to in-house placements will create a surge in complexity in matching placements to the needs of children, and will need to be monitored. At IMPOWER, we have supported councils through our innovative Valuing Care approach to capture needs in a more consistent way. This intelligence is then used to better match placements to the needs of children and young people.
Removing profit is an ambitious goal which, done in the right way, could enable better outcomes. It will be interesting to see how the Welsh government intend to make this shift, whilst ensuring that better outcomes and life chances for children and young people remain central to the change.
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