March 2022

Summary

Over the last 10 years, local authorities (LAs) have had to respond to an increasing demand for children’s services. Whilst it is known that the number of children in care is increasing and that commissioning practices vary across LAs, the capability and efforts of local authorities to respond to this challenge are less well understood.

Our analysis of the available and up-to-date sufficiency reports produced by LAs in England sought to better understand this response. Our findings reveal some nationally shared challenges dealing with increasing numbers of children in care as well as changes in children’s needs. Coupled with the increasing costs of services and difficulties forecasting future need, our analysis creates a picture of LAs struggling to navigate the marketised system of children’s residential care and to provide the quality of services which they strive to achieve.

We found a wide variety of responses to improve commissioning decisions and processes. Further evaluation of these should be undertaken to understand the outcomes associated with these approaches. However, the diverse needs and characteristics of LAs mean that strategies associated with positive outcomes in one setting will not by default transfer to another.

Objectives

This report provides analysis of all up-to-date LA sufficiency strategies with a focus on identifying:

1. the main perceived challenges for LAs to meet their sufficiency duty 
2. what actions are being undertaken or planned by LAs to improve commissioning outcomes
3. perceived negative consequences associated with using certain commissioning or market shaping approaches. 

How we went about it

We identified, catalogued, and synthesised all available up-to-date local authority sufficiency strategies in England (81 strategies, representing 84 local authorities in England). We extracted and analysed information related to demand, supply, access, costs, experience and use of commissioning frameworks, and market shaping activities. These key dimensions were informed both by wider literature on public service stewardship, previous research on sufficiency strategies, and in consultations with the Competition and Markets Authority and the independent review of children’s social care. We also extracted information related to whether and how service provider and user feedback was used to shape the sufficiency strategy.

Key findings

• Strategies generally reported an increasing demand for residential care, especially for children with complex needs, for whom residential provision is increasingly expensive. Numerous LAs described deficient local provision, unsuited to accommodating emergency, specialist, or therapeutic placements. It was reported that LAs were simultaneously under pressure from increasing demand for places for both high and low need children. The most commonly cited reason to explain this development was a lack of fostering services for children who needed them, alongside the increase in numbers of children with severe trauma and acute therapeutic needs. 

• Many LAs struggle to place children locally and to access local provisions, even though this was highlighted as a priority in most sufficiency strategies.

• It was generally reported that prices and unit costs of residential care places are increasing, especially among ‘independent’ (private for-profit and third sector) providers. However, the extent to which this is a result (or not) of changes within the children in care cohort was unclear.

• More than half of the LAs reported being part of a regional or sub-regional framework, in the expectation that this would improve their sufficiency by being able to access high quality and value for money residential services. However, LAs often reported that the effectiveness of these regional arrangements was limited.

• Many LAs indicated that their own forecasting projections were not very convincing and could therefore not be used to predict changes to the numbers of children needing care with any level of confidence. It is thus unclear how LAs can meaningfully engage with providers (which was often stressed as a priority) given that – based on the material presented in the sufficiency strategies – LAs do not have transparent and/or reliable information around future need.
  
• LAs are working to overcome their sufficiency challenges in many different ways. Several LAs described their own unique (but often untested) commissioning responses, but little is known about the outcomes associated with different commissioning approaches.

Implications

Based on our analysis, it seems that most LAs are experiencing an increasing demand for children’s residential care accompanied with rising costs for these provisions. LAs also commonly described challenges around placing children locally, even after joining commissioning consortia or frameworks. The ability of LAs to alleviate these challenges through market shaping and commissioning is likely obstructed by the fact that LAs do not appear, based on this analysis of utilised forecasting models, to have the capacity to reliably forecast (and thus communicate) their need to providers. LAs nonetheless described a number of actions designed to improve their access to high quality and value-for-money residential care provisions. Going forward, more work is needed to evidence the effectiveness of these efforts.

An important aim of this research was to analyse and appraise the toolbox of policy responses that LAs currently utilise to improve commissioning decisions and processes. This tailoring and adaptation of commissioning approaches by individual LAs brings a real opportunity for learning. This variation also provides an opportunity for future research evaluating the outcomes associated with different approaches. 

It should be noted that the extent to which sufficiency strategies depict existing practice is unclear. It cannot be assumed that improving the reporting and content of these documents will, in isolation, change commissioning outcomes. Moreover, the diverse needs and characteristics of LAs mean that strategies associated with positive outcomes in one setting will not by default transfer to another. 

Further research into specific commissioning innovations could usefully supplement our analysis. Without a learning agenda and a clearer connection between commissioning innovations and evaluation of their effects, it will remain challenging to identify and emulate best practice in the sector.

Next steps

This work was commissioned by the Independent Review of Children’s Social Care. The commissioner did not influence the reporting of our findings. The findings will be considered as part of the Review’s upcoming report and recommendations.

• Read the report