Question to the Department for Education:

To ask His Majesty's Government what action they are taking in response to the final report of the Competition and Markets Authority's children’s social care market study published on 10 March 2022, particularly with regard to the finding on excessive charging by private providers of residential care homes for children in public care.

The number of looked-after children in the care of their local authority has increased by 2% to 83,840 at 31 March 2023 from 82,080 last year. The number of children in children’s homes has increased by 16% since 2019.

The department knows that the care system does not currently work for every child and that there are not enough of the right homes in the right places for children in care, resulting in some children living far from where they call home. Moving a child away is not a decision to be taken lightly and there are legislative safeguards around this. Directors of Children’s Services are required to sign off each decision and Ofsted can challenge where they believe poor decisions are being made. This is to encourage local authorities to place children locally wherever possible.

As the Competition and Markets Authority found in their 2022 market study, the largest private providers are making materially higher profits and charging materially higher prices than would be expected if the market was functioning effectively. The department recognises these issues, particularly around large providers with complex ownership structures, and agrees that sometimes placement costs can be too high.

In February 2023, the department published ‘Stable Homes, Built on Love’, which sets out a broad, system-wide transformation. This can be accessed attached. As part of this strategy, the department is:

• Investing £36 million to support over 60% of all local authorities in England to recruit and retain more foster carers.
• Investing over £142 million up to 2025 to implement new mandatory national standards and Ofsted registration and inspection requirements for providers who accommodate 16 and 17 year old looked-after children and care leavers, in addition to banning the placement of under-16s in supported accommodation.
• Working with the sector to co-design and develop regional care co-operative pathfinders, which will plan, commission, and deliver children’s social care placements.
• Investing £259 million capital funding for secure and open children’s homes.
• Introducing a new market oversight regime that will increase financial transparency across the sector, for example, of ownership, debt structures and profit making.

Finally, the department is supporting kinship families through the first ever national kinship care strategy, which is backed by the following funding: £20 million in 2024/25; over £36 million in a fostering recruitment and retention programme this Spending Review; and £160 million over the next three years to deliver the department’s adoption strategy, entitled ‘Achieving excellence everywhere’.