Secret report on future of children's services finally published


After a two-year delay, the Department for Education (DfE) has published the report it commissioned from LaingBuisson and Cobic, which sets out how children's social care services can be moved out of local authority control.

The DfE Advisory Panel, consisting of Professor Julian Le Grand, Professor of Economics, London School of Economics; Alan Wood, then President of the Association of Directors of Children’s Services; and Isabelle Trowler, Chief Social Worker for Children and Families in England, encouraged LaingBuisson and Cobic to be "bold" and "ambitious". Trowler is the only social care professional on the Innovation Programme Investment Board, which hands out innovation funding to local councils and others. She has been the lead champion of testing out deregulation in children's social care, which could be boosted by a Bill currently in Parliament.

Article 39 pressed for publication of this report, since we believed it might explain why the Government included radical measures in the Children and Social Work Bill to allow individual councils to be excused from their statutory duties in children's social care.

Yesterday's publication of the report shows we were correct to suspect links between the review and the exemption clauses, which were knocked out of the Bill by Peers last month. Members of Parliament begin debating the Bill on Monday.

The report points to:

  • "a clear appetite from a number of significant providers to enter new areas of the market including assessment and safeguarding [children] as long as it is underpinned by a clear policy direction from national government services and a sensible approach to costs and risk sharing"

    "There is strong interest by incumbents active in existing markets for looked after children (foster care, children’s homes and social work staffing agencies) to expand their range of business into ‘Assessment and Care Planning Services’ processes"

    "lack of direct experience [within profit and voluntary sectors] of delivering Assessment and Care Planning Services"

    These are policy areas the Government and a select number of councils have proposed as candidates for exemptions from local authority duties. The plan is for exemptions to be 'trialed' with innovation funding, presumably to enable independent contractors to develop their experience.

  • the willingness of independent contractors "to play the long game if consistent government support and requisite provisions were in place"

    This confirms our fears that exemptions from statutory duties were to be used as a stepping stone to children's social care services being moved wholesale from council control.

On privatisation, LaingBuisson and Cobic conclude:

"Although the current policy direction by ministers is not to generate a whole-scale marketisation of children's social care, we concluded that it is hard to envisage how significant additional capacity and diversity could be created without more services being exposed to market forces".

The two companies complain about the "reluctance by local authorities to engage the market and a lack of incentives for them to purchase services externally"

They state there is "strong evidence of endemic ‘in‐house first'" practices in relation to local authorities seeking to place children they look after with their own foster carers and in their own children's homes. They consider ways of overcoming this.

Discussions took place with companies in September and October 2014, revealing independent contractors perceive three main barriers to "market entry": reputational risk; commercial risk; and risk that government policy might change. The report states:

"One private equity investor we spoke to described this as a ‘Marmite test’ – some organisations will be highly averse to the risk of front‐page scandals if something goes wrong. Others are more phlegmatic."

And:

"The large, broad‐based outsourcing companies we spoke with said they were highly averse to reputational risk and would be unlikely to be early entrants to this market. In order to address this, government would need to be clear about the levels of responsibility, liability and accountability they would require from companies taking on the delivery of children’s services."

Despite the fear of reputational risk, LaingBuisson and Cobic state:

"We found a number of examples of suppliers demonstrating a keen interest in entering into complex and difficult child protection markets provided that accountability and responsibility was clearly articulated and risk appropriately shared."

And:

"two large providers were confident that there were enough good quality social workers available across England to deliver social care services via external companies."

LaingBuisson and Cobic dispute the general consensus that independent providers will not be attracted to running children's services that carry high risk:

"experience in other health and social care segments does not support the view that independent sector suppliers limit their interests to easy to deliver services. While that can happen, for example in elective surgery under ‘choose and book’, which is set up in such a way to allow independent sector providers to offer only the slots they wish to, there are other areas where the entire history of independent sector provision has been to supply specialised services for patients who are difficult to place. The most prominent example is mental health hospital provision."

The report includes a review of outsourcing in the United States, Canada, Australia and New Zealand. LaingBuisson and Cobic explain:

"most overseas governments intent on outsourcing have developed market capacity by issuing a regulation requiring certain specific services to be outsourced to a third party outside of state government. This has been achieved successfully in parts of the USA, New Zealand and Australia and has also been applied in both the NHS and adult social care in England and most recently in the National Offender Management Service. This mechanism could be rolled out in children’s services in England along similar lines... [It] could commence with the outsourcing of those services where there is already an established market, such as fostering placements, residential placements and adoption services, extending into other areas of provision."

Central government forcing councils to hand the majority of their children's services funding to independent contractors is one approach considered in the report. This is what happened in adult social care in the 1990s, LaingBuisson and Cobic explain:

"A requirement to outsource a proportion of the service could also be stipulated along the lines of the 1993 single transitional community care grant where 85% of expenditure was ring‐fenced to the independent sector."

They advocate "multi‐year" contracts "calculated on the predicted levels of population and service demand. As a consequence commissioners and providers are able to focus on improving processes and activities to achieve outcomes, with additional rewards for achieving the desired outcomes".

They recommend Children's Trusts become Children's Commissioning Trusts - "autonomous not‐for‐ profit commissioning organisation[s]" which only provide services to children and families "as a last resort". The Trust would "sub‐contract out support assessments for children, retain the decision‐making function (as it must) as to what support to provide to a child, and then engage a third party support provider to actually deliver the service".

This model, LaingBuisson and Cobic explain, would require the Trust "to retain significant expertise on the control of its statutory functions". It goes on, however: "If the children’s trust was to be created under a direction by the Secretaries of State there would be no such restriction to prevent onward delegation".

The report also states:

  • "There are no truly large-scale organisations, i.e. with revenues in excess of £1bn per year" operating in children's social care
  • Local authorities who are not struggling to meet their responsibilities to children could outsource their functions and "retain a thin commissioning and contracting function alongside all statutory responsibilities, with the functions being delegated to the trust"Under this voluntary model,"the Secretary of State could still reserve the right to remove the statutory responsibilities from the local authority and make the trust accountable to the Secretary of State"
  • the current Trust model (2014) has "fundamental impediments", including that they "have not been subjected to any market testing or procurement competition prior to contract award"; they are "in market terms, single monopolistic providers within a given geographical area with a guaranteed income stream and are free from any external competition"; and they are not forced "to market test or commission the services they provide and they continue, as do local authorities, to be conflicted in their roles of both provider and commissioner". LaingBuisson and Cobic conclude: "while we are optimistic that the trust model has the opportunity to provide a more social work focused model, we do not see it as a significant lever engaging the independent sector or leading to a growth in the market"
  • Action for Children and Barnardo's "on the face of it appear to be absorbing approaching half of English councils’ £441m (2012/13) spending on children’s social care supplied by voluntary sector providers".

The DfE's response to the 2014 report, also published yesterday and dated December 2016, states:

"this is an independent report and, in a number of areas, it goes beyond government policy. For instance, it sets out an option for how regulation might compel all local authorities to outsource all or a proportion of services. We will not be implementing this option... We want to support improvement by freeing up good local authorities to be innovative with the solutions they put in place, not by compelling them to outsource. We therefore reject those options which would either centralise the delivery of children’s social care services, such as the option to establish a National Children’s Social Care Commissioning Board, or allow profit- making organisations to deliver them."

Article 39's Director, Carolyne Willow, states:

"This suppressed report shows we and others were right to fear a hidden agenda on the exemption clauses. LaingBuisson and Cobic have told government that independent contractors are willing to play the long game in waiting for councils to hand over the majority, if not all, of their children's social care services. But first they need to develop their experience in key areas of working with children and families and supporting and monitoring the welfare of children in care. This fits exactly with the types of plans for exemptions from statutory duties we have been hearing about.

"This explosive report underlines in thick red pen the risk to children of Parliament allowing individual councils to opt out of their legal duties. We hope Members of Parliament will be robust in their defence of children's social care rights, and refuse to allow the clauses to be reinstated in the Bill.

"The Chief Social Worker for Children and Families has a vital and unique role in championing the rights of children and young people who depend on laws and the state to protect, look after and support them when their families are unable to do so. Since she had a pivotal role in recommending and steering this review, we believe it is now incumbent on Isabelle Trowler to set out her own vision for excellent children’s social care services."

The report and the Government's response can be viewed here.

The LaingBuisson project team comprised:

William Laing, CEO, LaingBuisson
Malcolm Newsam, Cobic Consultant Advisor
Elaine Redding, Cobic Consultant Advisor
Andrew Smith, Director of Finance, Cobic
Dr. Nicholas Hicks, Chief Executive, Cobic
Marie Tucker, Cicada Services