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'Underfunding poisons relationships between councils and children’s services outsourcers'

Simone Vibert
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As our report, Commissioning in Children’s Services – What Works? highlights, underfunding of services can seriously undermine attempts to protect some of the most vulnerable children in our communities.

And yet, in a time of fiscal constraints, it can be difficult to prioritise and make the tough decisions while also providing quality services.

Councils have been polarised in their responses to funding cuts. Some have scaled up their use of outsourcing, while others have brought previously outsourced services back in-house. Our research shows that the reason behind these polarised reactions is a lack of costs data, meaning that councils rely on their instincts or, in some cases, ideological convictions about how they can save money, rather than evidence.

Sadly, the impact of these decisions has often been instability, as decisions have been made very rapidly to move a child from one placement to another. As we showed in our previous report, In Loco Parentis, an unstable care journey is not only costlier to the council in the short, medium and long term, but it is also highly damaging to the lives and outcomes of vulnerable children and young people.

Underfunding also poisons relationships between councils and providers. When children’s services are underfunded, the kinds of conversations had between councils and providers shifts; inevitably, it becomes less about what support a child needs to succeed, and more about what the local authority can afford. This is not only damaging to the child, but to commissioner-provider relationships; trust is lost, as neither side feels it can live up to its responsibilities as a corporate parent. Furthermore, when dialogue between commissioners and providers is reduced, strategic planning and referral processes become more difficult to manage, as neither party knows what the other needs or provides.

Theresa May’s government has abandoned its predecessor’s aim of reaching a budget surplus by 2020 but what this means for the funding of children’s services remains to be seen. What approach should councils take in the meantime, in the context of continued budget cuts?

We recommend that councils and central government should adopt a proactive approach to outsourcing, seeing it not as a way to respond to failure or cut costs, but as a way to improve outcomes in a planned and strategic manner. It is a very natural response for a council facing continued budget cuts to look for ways to make savings. But our evidence shows that outsourcing works best when it is carefully planned and implemented gradually, giving commissioners and providers the time to establish productive working relationships, get the local community on board and engage in proper planning procedures. Councils seeking to protect vulnerable children from the brunt of budget cuts should avoid making knee-jerk changes to the way they deliver services, despite the sense of urgency evoked by austerity.

Simone Vibert, researcher, Demos

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