Town hall chiefs have hit out at the private children’s homes operators ‘fleecing’ local authorities for cash, branding the situation a ‘scandal’ and a 'tragedy'. The number of children in care in Stockport has risen significantly - from around 350 to 500 - largely due to the cost of living crisis and the fallout from the pandemic.
The council is currently £3m over its budget for ‘external’ childrens’ care placements - those not provided by the authority - including 75 youngsters in privately run homes and 47 in independent foster care. The average weekly cost has doubled to around £4,000 over the last five years, while the most intensive packages - for high needs children - has ‘rocketed’ from £10,000 to £14,000 a council scrutiny committee heard this week.
As part of a ‘recovery plan’ bosses are proposing to buy second hand properties and convert them into new children’s homes, allowing the council to provide in-borough placements ‘at a cheaper per bed per week rate for children with complex needs’. The ‘invest to save’ scheme would be funded by creating a new £2 million borrowing facility.
READ MORE : Big increase in number of Stockport children in care as cost of living crisis hits families' 'financial resilience'
Coun Wendy Meikle told the children and families scrutiny committee that rising cost of looking after children with ‘the most complex needs' was behind the approach. “If you invest to save, you will soon recoup that money after not a lot of years,” she said.
Coun Colin Foster said the council was hoping the government would tackle ‘the whole issue about how much local authorities are having to pay - substantially into the private sector’. “Quite frankly what’s happening is a national tragedy,” he added.
“We are at the end of that situation, having to pay for it - and it needs national legislation to actually deal with it. The council says there are enough children's homes in the borough to provide beds for local children - albeit only two are run by the local authority.
However these are often filled by children from outside Greater Manchester. This point was picked up by Coun Foster.
“What makes it more problematic for us is that we have one of the greatest concentrations of private children’s homes in the whole of the north west, within Stockport.
“There are children coming from all over the place - into the north west and into Stockport - just because people need places. And it’s not necessarily the best place, it's the place that’s available, that happens with a number of authorities.”
Coun Kate Butler agreed. “Yes, it is a tragedy - but it is also a scandal,” she said. “It’s a national scandal and I don’t know how and why it hasn’t been exposed yet.”
The Labour councillor added: “It is a scandal that local authorities and council tax payers are being fleeced by private operators that operate at a massive profit, regardless of what they would say.”
Ofsted has no direct role in the prices social care providers charge, but told the Local Democracy Reporting Service (LDRS) it 'has long been concerned around the sufficiency of care available for children, which can impact the prices local authorities pay providers'. A spokesperson said: "Limited choice means that commissioners are often in a difficult position to negotiate the best care and support for children.
"However, no single local authority can resolve these serious issues on their own. We have raised our concerns to both the Independent Review of Children’s Social Care and the Competition and Markets Authority (CMA) market study into children’s social care, and called for a national, cross governmental approach to addressing sufficiency. We expect the government’s response to both reports soon.”
Peter Sandiford, chief executive at The Children’s Home Association, says that, while there may be outlier individual cases, the independent sector on average costs less than local authority provision. He points to a recent report by the Competition and Mergers Authority (CMA) which says the evidence from regulatory inspections gives it ‘no reason to believe that private provision is of lower quality, on average, than local authority provision’.
“Turning to price, our evidence suggests that the cost to local authorities of providing their own children’s home placements is no lower than the cost of procuring placements from private providers, despite their profit level," it adds. However it also notes that ‘the largest private providers of placements are making materially higher profits, and charging materially higher prices, than we would expect if this market were functioning effectively’.
Mr Sandiford added: “It is our opinion that in most cases the cost of children’s homes placements is justified. The CHA is working closely with Greater Manchester local authorities, including Stockport, to explore alternative models of commissioning that ensure the best value and high-quality services.
Greater Manchester, as a region, is leading the way in developing innovative solutions to the current sufficiency crisis we face in children’s residential care.” Stockport council children and families scrutiny committee met at the town hall on Wednesday night (October 12).
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