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EXCLUSIVE Government to 'stocktake' fostering provision amid concerns over private sector profits

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The government is set to carry out a national ‘stocktake’ of fostering provision in response to concerns raised in Sir Martin Narey’s recent report into children’s residential care, LGC has learned.

The report, published earlier this month, found “increasing dislocation” between the types of foster carers being recruited and the needs of particular children.

Sir Martin also said there was evidence that the costs to local authorities of placements through private fostering agencies were significantly higher than those arranged in-house, with little difference in the quality of carers provided.

Dave Hill, president of the Association of Directors of Children’s Services, told LGC he had begun discussions with the Department for Education over the planned review, which is expected to be led by children and families minister Edward Timpson.

Mr Hill said he is pushing for the stocktake to examine the practice of some private agencies who offer foster carers large cash incentives to join, then pass the cost on to councils by charging higher fees.

Mr Hill, who is executive director for people commissioning at Essex CC, said the “common and very sharp practice” involved cash incentives of up to £3,000.

He added: “We think this is immoral. We bear the cost of assessment, training and approving [foster carers] and then the cost of these incentives is passed back on to us.

“The stocktake should take a long hard look at this. The agencies should only be not-for-profit.”

The Narey report cited evidence from Corporate Watch that a group of eight commercial fostering agencies made £41m profit between them in 2014-15 from providing placements to councils.

Chief executive of fostering charity Tact, Andy Elvin, said large venture capital firms had entered the market due to the relatively low risk involved.

He added: “From a local government point of view, they are right to be absolutely furious.

“The business model is not amenable to good practice as it is about maximising capacity rather than making the best decisions for children.

“People should not be making money out of vulnerable children.”

Mr Elvin said some councils should improve their fostering services to include better training and support for carers and establish new models of delivery by working closely with the voluntary sector.

Harvey Gallagher, chief executive of the Nationwide Association of Fostering Providers, which represents independent providers, said he was opposed to any “service disruption” that moves carers around the system unnecessarily.

He said discussions had been held with some member organisations that offered incentives, but added there was little evidence that removing commercial organisations would improve the quality of care or value for money for councils.

A spokeswoman for the Department for Education said: “The stock take…will consider three key areas - what good foster care looks like, the foster care workforce, and the foster care market.

“We expect this to involve engagement with the sector and for it to draw on external expertise.

“Findings will be published in due course.”

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