Care home procurement model fails vulnerable children

Parts of the country have a disproportionate numbers of care homes, with local authorities simply accepting what the market offers, by Colin Cram

Certain parts of the country, such as Rochdale, have a disproportionate number of care homes – with children coming in from different areas.

The government has promised action on this, saying it will make it harder for councils to send children out of their areas. It has also asked Ofsted, which is responsible for inspecting care homes, to inform the police of care homes in their areas.

The problem has been attributed partly to care homes being situated in cheaper parts of the country because of market forces, as 75% of care homes are run by private companies.

However, this is a symptom of a major failure in procurement of care places by local government. The heart of the problem is that local authorities operate independently, thus preventing any coherent approach to managing the situation and influencing the market.

Consequently they have to accept what the market offers, rather than determining how they want the market to operate. Local authorities vary widely in their procurement capability; contract terms and conditions and management will vary and in some instances they may be absent.

So what should local authorities be seeking? High quality care, appropriate to each child, in the right place and at a reasonable price would be a good start. But what is a reasonable price?

Five thousand children and young people are in residential care, costing £1bn a year, according to the children’s minister, Tim Loughton. This works out at an average of £200,000 per child per year.

It is difficult to imagine how an average annual cost per child of £200,000 a year could be considered reasonable. It looks as if everyone is getting a bad deal – children, local authorities, the taxpayer – except for some of those running the care homes.

Local authorities need to bear in mind that they are dealing with a commercial market. They are never going to manage this market effectively without setting up a properly resourced, skilled and empowered central commercial team to operate on behalf of all.

There must be coherent contracts, management of the market, awareness of the details of all care homes, how many children are in them at any one time and from which boroughs they are placed. The information should be provided weekly by each care home to the commercial team, with sanctions if it is not.

Such information is the norm for non-social care contracts such as the Government Procurement Service agreements for photocopiers. Are children not worth more than copiers?

Each care home should also be rated against both commercial and care standards, so there needs to be liaison between the team and Ofsted. Every local authority should be aware of the ratings of each home and take this into account when placing children.

The proposed central group should be monitoring the finances of each care home or organisation owning each care home. Signs of financial difficulty may indicate that corners may be cut. The group shouldensure well managed procurement agreements with care homes, ensuring that prices are fair and that contract terms and conditions are standard and robust. These should be made mandatory for local authorities.

They should also be researching likely future needs, plan how these can be satisfied and influence the distribution of homes so that they are more suited to local government needs. Local authorities will not be able to do this individually.

The current model fails vulnerable children. The model I propose ensures better care for children, more consistent standards, that care homes (increasingly) will be where they are needed, rather than where the market dictates, and that costs are controlled.

Colin Cram is a public sector consultant specialising in procurement and the former director of the North West Centre of Excellence.