Fostering stocktake offers a great opportunity to improve services for children

By Mark Willis

Following its call for evidence, the Department for Education is now poring over the submissions of all those who contributed to the fostering stocktake over the past few weeks.

The stocktake aims to gather evidence, inter alia, on what works best in fostering settings to improve outcomes for children, what improvements could be made to the way fostering provision is commissioned and how children’s experience of entering foster care and transitioning between placements can be improved.  This focus upon improving children’s experience of fostering is to be welcomed and, in a climate of decreasing revenues for local authority children’s services departments, and increased demand, it is clear that changes are going to be needed to the way foster care is delivered over the next few years.

Publicly, however, much of the debate has focused upon the ever increasing role of independent fostering agencies (IFAs) in the market place with differing views expressed about whether such organisations are ‘profiteering’ from scarce local authority resources or conversely whether they provide a helpful, specialist alternative and offer a wider choice of placement to hard pressed children’s social care.

In this context it is worth reflecting upon some of the figures.  According to the DfE data, as at 31st March 2016 there were 70,440 children in care and of these 51,850 were in foster placements (74%).  The Fostering Network estimate there is a national shortage of almost 6,000 foster carers in England alone to ensure appropriate provision.

Moreover, local authorities are seeing more young people take advantage of the opportunity to stay with their carers into early adulthood through the ‘Staying Put’ initiative meaning the availability of foster care placements continue to diminish.

Recently the Association of Directors of Children’s Services (ADCS) has begun to publicly criticise the IFA market for making what they call ‘substantial profits from fostering’, largely as a result of fee increases to local authorities.  It also condemns the widespread practice of ‘Golden Hellos’ whereby an IFA induces a foster carer, often from a local authority, to transfer to them with a one-off payment, sometimes as much as £3000.

Sir Martin Narey’s review of residential care highlighted evidence of £41m profits from eight commercial fostering agencies in 2014/15.  The recent submission from ACDS to the stocktake commented ‘ACDS members believe it is immoral that such significant private profit is being made on the back of vulnerable children and young people’*.

Conversely the National Association of Fostering Providers claim their members provide a helpful resource to local authorities, giving a wider choice of placement which helps meet the individual needs of children.  They also challenge the claim that local authority in-house fostering provision is significantly cheaper, citing the National Audit Office’s (NAO) recent criticisms of how local authorities calculate such in-house costs.  In this respect the NAO said there were huge variations in costs quoted by local authorities meaning they can’t all be right.

The history of the rise of IFAs is an interesting one.  In the early 1990’s the government urged local authorities to focus upon reducing the numbers of children in residential care placements, often outside their area, and instead offer children family-based care ensuring they retained links to family, school and social contacts.  Thus, new legislation offered the opportunity for private or not-for-profit fostering providers to enter the market.

The early IFAs were typically small, locally based and often offered specialist services such as therapy or full-time education.  During my time as a social worker in this period I viewed them as a helpful resource for a small number of children I was working with.

However, the market in 2017 looks very different.  Large private equity backed companies now pre-dominate, one of whom in particular has over recent years spent considerable money acquiring small IFAs to build their growing portfolio.  Local authorities understandably fear that the dominance in the market of a handful of private firms will unduly influence pricing across the sector at a time when their resources are shrinking.

Notwithstanding the debate over true ‘unit costs’ of an IFA placement, what cannot be argued is the increasing use of IFAs by many local authorities (although there are wide geographical variations) across England.  The most likely outcome to the stocktake is therefore that local authorities will be encouraged to become more pro-active in recruiting and retaining their own foster carers wherever possible – it is hard to imagine that it will recommend increasing the use of IFAs, especially private for-profit companies, unless they can demonstrate especially high standards of care for children and specialist value-added services to improve the outcomes for children.

A re-balancing of the fostering market might ensure local authorities return to a more robust focus not only on recruitment and retention but also the ongoing training of in-house foster carers which is at best patchy across the UK.  As a result the aims of government legislation passed 25 years ago of keeping fostered children close to their family and social links has a greater chance of being fulfilled.  If it also means costs are reduced and re-directed to other services for vulnerable children then all the better.

*ADCS response to the national stocktake call for evidence, 16 June 2017