Commissioning in Children’s Services – What Works?

Despite significant policy attention and political action, looked-after children and children with special educational needs and disabilities (SEND) remain some of the most vulnerable children in the country with their later life outcomes – social, educational and health related – remaining stubbornly poor. It is no coincidence that in Ofsted’s inspections of local authority children’s services departments from November 2013 to March 2016, three-quarters were given one of the two bottom ratings: ‘requires improvement’ or ‘inadequate’.1 These failings have profound impacts on the lives of children and young people.

Two sets of pressures are putting children’s services departments under considerable strain. First, demand for children’s social care is rising. Between 2008 and 2015, local authorities saw a 22 per cent rise in referrals and a 16 per cent increase in the number of children in care.2 It is not only the volume of demand but the kind of demand that is exerting pressure: the needs of looked after children are becoming more complex, and the introduction of Education, Health and Care plans (EHCPs), although a positive move forward, require local authorities to think more creatively about how they will meet the needs of children with SEND. Second, local authorities are facing continued and severe cuts to their budgets. Between 2011/12 and 2014/15, spending by England’s local authorities on children’s social care dropped by 18 per cent,3 resulting in staff reductions, increased workloads and less support for foster carers.

In short, local authorities need to do more with less, and perhaps unsurprisingly many struggle to achieve the quality expected of them by the government and regulator. In some areas, outsourcing services to independent providers4 has been adopted as a potential solution, while in others, ‘externalising’ (setting up an independent trust) has been used.

In some cases, these changes in governance have been forced on the local authority in response to what was seen as a failure in in-house delivery. However, there is some concern about the use of outsourcing in children’s services, particularly where it involves the use of for-profit providers. It is also a challenging undertaking to do well. Yet evidence suggests that when used correctly outsourcing has the potential to help local authorities deal with the pressures they face, drive up standards, and ultimately secure better outcomes for vulnerable children and young people.

Pressures to do more with less are likely to be exacerbated now Britain has voted to leave the European Union – it is too soon to judge the full effects of the referendum result, but domestic funding will most likely be impacted, and planning in the short term will become more difficult. As pressure to improve outcomes under resource constraints increases, it is likely that so too will the number of local authorities opting to outsource at least part of their children’s services. With this in mind, this report looks at domestic and international examples to identify some of the features common to outsourcing which seem to be working well, and possible pitfalls to avoid, to help inform this rapidly developing agenda.