Oxford research finds for-profit outsourcing linked to more children being placed away from local area

Research conducted by the University of Oxford has found that for-profit outsourcing is “consistently associated” with more children being placed outside their home local authority and greater placement instability.

The study examined how the outsourcing of children's social care to the private market has influenced placement locality and long-term stability over time.

The report claims that an estimated 17,001 out-of-area placements can be attributed to increases in for-profit provision between 2011 and 2022.

It was found that overall levels of for-profit outsourcing have, on average, increased steadily over the 10-year period. “By 2022, 38% of all children in care are placed with for-profit providers, including children's homes, fostering agencies, or other care providers, which is an increase of 9 percentage points since 2011”, said the report.

Looking at placement outcomes among children in care, the report found that the number of children in need of care being placed outside of their local authority has been “steadily increasing over the past decade”, and it was recently estimated that more than 40% of children in care are placed outside the LA responsible for their care (Foster, 2021).

The report describes this as a “striking development”, considering that Section 22C of the Children Act 1989 suggests that children should be placed within their home local authority to the extent that it is “[…] reasonably practicable”.

The study suggests that for-profit outsourcing is linked with “more unstable, short-term placements”.

It also points to research conducted by the Children’s Commissioner which found that out-of-area placements have been reported to make children “more vulnerable to exploitation and grooming”.

Concluding the study, the authors wrote: “Despite the numerous independent reviews and investigations, a significant proportion of children are still being placed in unstable or out-of-area care, exposing already vulnerable children to additional risks. Outsourcing and private sector involvement continue to be highlighted as promising avenues for LAs to achieve better outcomes for children.

“Our analysis shows that for-profit outsourcing is consistently associated with worse placement outcomes among local authorities. This suggests that increasing the already significant proportion of for-profit children's social placements may not be the most effective strategy to improve outcomes in the children's social care sector.”

In April, charity Become warned that one in five children in care are being placed “more than 20 miles from their local area”, and that it has seen cases of children being placed 500 miles away.

The charity found that children who are moved more than 20 miles away from home are more likely to have lower wellbeing and to experience emotional difficulties than children who are placed closer to home.

It called for a "national commitment" to stop children being placed miles from their home area when it is “not in their best interests”.

Commenting on the Oxford research, the Association of Directors of Children's Services (ADCS) President John Pearce said: “The findings from this report by University of Oxford are clear about the negative impact of the extensive privatisation of residential care for children leading to a growth in unstable, short-term placements. This is not in children’s best interests. The report is the latest in a long line raising similar issues around the role of privatisation in parts of children’s services and how some providers are making excessive profits from the care of our children and young people. As the Competition and Markets Authority (CMA) noted in its market study of children’s social care, the way the placement market is functioning is contributing to poor outcomes for children.

“We are the only purchasers of placements but providers can pick and choose which referrals to accept and set the price due to high levels of demand. Local authorities across the country are working hard to overcome the sufficiency challenges they face with many investing in their own children’s homes and in campaigns aimed at recruiting and retaining more foster carers, but this alone cannot solve the problem in either the short or longer term. ADCS continues to call for new legislation which prevents profiteering in children’s services and for the introduction of pricing bands and caps. The system must be driven by children’s needs, not maximising profits.”

The Department for Education has been approached for comment.

Lottie Winson