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CMA launches study of children’s social care provision

The Competition and Markets Authority has launched a study of children's social care provision to establish why a lack of availability and increasing costs could be leading to the needs of children in care not being met.

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

Using its statutory market study powers, the CMA aims to obtain information to help build a better understanding of the children's social care sector. Depending on what it finds, it 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.

In England, Scotland and Wales, around 99,000 children live under 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, with the remaining 18,000 in a range of other types of placement, including with their parents or placed for adoption.

Each local authority is responsible for contracting foster care and purchasing the required children's homes places. Children are placed with foster carers, either directly by the local authority or by independent fostering agencies, which can be run for-profit in England and Wales but not in Scotland.

Children's homes are provided either directly by local authorities, by the private sector or by charities, with 70 per cent of children in England and 78 per cent of children in Wales placed in private sector homes.

The launch of the study comes after concerns have been raised by other organisations about private sector provision of children's social care making high profit margins. 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 per cent on their income.

The study will examine whether high levels of profit have been made at the expense of investment in recruiting and retaining staff, and providing quality services.

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 look into:

Comments on the issues raised can be submitted in the Invitation to Comment by 14 April 2021. All updates on the CMA's work in this area can be found on the Children's social care study page. For a recent House of Commons Library research briefing on children's social care services in England, click here.