A study of children’s social care provision has been launched by The Competition and Markets Authority.

The study, which aims to obtain information to help build a better understanding of the children’s social care sector, will explore why a lack of availability and increasing costs could be leading to the needs of children in care not being met.

“Children’s care is not a market like any other - our clear and overriding priority will be about identifying ways children can get better care,” said CMA CEO Andrea Coscelli.

Using its statutory market powers, the CMA will examine concerns around high prices paid by local authorities and inadequate supply of appropriate placements for children in their care. This could be putting pressure on the ability of local authorities to provide the appropriate accommodation and care which children need.

The CMA can issue guidance to businesses and the public, make recommendations to the industry or to government or, if appropriate, launch a full investigation into the market.

Andrea Coscelli added: “Children in care are among the most vulnerable in our society and they need a system that does not let them down.

“We are concerned that some children are not getting access to the right placements due to a lack of availability in the system, and that rising prices are putting further pressure on stretched local authority budgets,” she added.

In England, Scotland and Wales, there are around 99,000 children in the care of their local authority.

- The majority of children in care, approximately 65,000, live in foster care.

- Around 16,000 children live in residential care, including children’s homes and independent or semi-independent living accommodation.

- The remaining 18,000 live in a range of other types of placement, including with their parents or placed for adoption.

A recent Local Government Association report found that some independent providers of children’s residential and fostering placements are achieving profits of more than 20% on their income.

The CMA will look at how well the current system of provision is working across England, Scotland and Wales and explore how it could be made to work better. In particular, it will explore:

- The supply of placements, including whether the current balance of local authority, private sector and third sector provision is working well for children and local authorities.

- Prices charged by providers and variation between prices paid for similar types of placement, with increasing prices potentially putting pressure on local authority budgets.

- The way commissioning of places is carried out, and whether local authorities could be more effective in securing appropriate placements for children.

- The environment for investing in the system to ensure sufficient appropriate places are available for all children who need them in the future, and whether any measures should be taken to improve this.

Comments on the issues raised can be submitted in the Invitation to Comment by 14 April 2021.