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CMA raises concerns as to dysfunctional market for children’s social care placements

In March 2021 the Competition and Markets Authority (CMA) launched a study into children's social care and the placements available to children. There are currently over 100,000 looked-after children in the UK with the current annual cost of social care being approximately £5.7 billion in England, £680 million in Scotland and £350 million in Wales.

The final report as to the CMA's findings was published on 10 March 2022. It found that there is a shortage of placements both in foster care and in children's homes, which results in local authorities often having to pay high prices to secure a placement. The profits made by some private providers of children's homes were higher than the CMA expected, which indicated that local authorities may be paying more than they need to, particularly in respect of fostering services.

The CMA has recommended that the UK government develops national and regional organisations that could support local authorities with their responsibilities in finding placements for children. The CMA also raised concern as to the 'financial resilience' of some private providers of children's homes, some of which have high levels of debt which could impact upon the care provided to the children within their placements.

Andrea Coscelli, Chief Executive of the CMA, said:

"The UK has sleepwalked into a dysfunctional children's social care market. This has left local authorities hamstrung in their efforts to find suitable and affordable placements in children's homes or foster care.

We have also identified issues with the financial stability of children's home providers. It is important to manage the risk of children's homes providers going bust and local authorities having to pick up the pieces.

Local authorities cannot be left to face these challenges alone. There are several areas where national governments should make changes to address issues in the sector, including new financial oversight of providers and the development of new bodies to support local authorities with commissioning. With children's social care currently being reviewed across the UK we want to see our recommendations reflected in any changes to policy."

For the CMA's press release, click here.

Julia Queen, Barrister, Coram Chambers