Children’s social care services are becoming “increasingly attractive” to private investors as councils look to outsource services in a bid to avoid “reputational risk” over the quality of provision, a new report by market analysts Laing Buisson has found.
The report on the children’s services market, published this week, predicts increasing moves towards more outcomes based commissioning on a large-scale, replacing deliverly by individual councils, due to the need to manage demand under tightening budgets.
It says that the “market” for children’s services, including safeguarding, fostering, adoption and residential care, grew to a value of £9.9bn in 2016 due to ongoing increases in the level of looked after children.
The report says: “The scale and maturity of the sector is making it increasingly attractive to investors, who have in turn invested capital and gained comfort with the challenge of getting it right for each looked after child in the face of limited funding, high levels of regulation and a politically sensitive market.”
The report’s author Philip Blackburn said the “twin goal” of value and quality is expected to drive forward more “dynamic contract partnerships” between local authorities and large independent sector providers.
He added: “Experienced providers which can offer scale and scope with their services have a track record of delivering high quality outcomes are likely to be in demand from local authorities looking for long-term solutions… ’winds of change’ suggest more large-scale contracting of services is on the doorstep.”
Laing Buisson’s chief executive Henry Elphick said increasing demand and a lack of supply made the appeal of the sector clear to market analysts, with the best providers able to attract the talent to deliver high quality services.
He added: ”The challenge is to deliver consistent, high quality services in a macro funding environment that has been negative until recently, and with the potential for significant reputational risk with an often unwanted appearance in national media if quality of service delivery is not maintained without exception.”