The UK’s competition regulator has called for local authorities to consider taking foster care in-house and for more state intervention in children’s homes, after castigating private providers for taking excessive profits and delivering services that fail to meet young people’s needs.
The Competition and Markets Authority said, in a report published on Thursday, that a shortage of places and a fragmented market meant that local authorities had no bargaining power with children’s homes and foster carers. They were therefore paying overly high prices.
Children were also being placed in homes too far from where they lived, or being separated from siblings, it added.
The CMA recommended that the UK government and the devolved administrations create national and regional organisations that could support local authorities to find homes for children and that “options are actively explored for bringing foster care in-house”.
The CMA also expressed concerns over the financial state of private providers of children’s homes, particularly those financed through private equity. High levels of debt could impact the care provided to children, the regulator warns.
The CMA’s study into the Foster care market focused on the provision of children’s social care in England, Scotland and Wales, where over 100,000 children rely on said services for care. The current annual cost for children’s social care services is around £5.7 billion in England, £680 million in Scotland and £350 million in Wales.
The government and local authorities should also “review the barriers” to the provision of children’s homes, it added. CMA chief executive Andrea Coscelli said the UK had “sleepwalked into a dysfunctional children’s social care market”, adding that local authorities were “hamstrung in their efforts to find suitable and affordable placements”.
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