Recent months have seen a very worrying trend for local authority commissioning of foster care to set very low 'capped' prices. This means that the tendered contract for independent and voluntary sector fostering providers (IFPs) has a maximum price set against a notional idea of a unit cost (as if there's any such thing in reality as a 'unit' of a child! Children are different and need different kinds of support that cost different amounts of money - commoditising them is a flawed premise, in my view). If a provider cannot offer their services at or below that price, they cannot bid to be a part of the contract. This means that those foster care services not on the contract, regardless of their quality, value for money or appropriateness for an individual child, will only ever be used as a last resort.

I understand and acknowledge the huge financial pressures that local authorities are facing. But I would caution strongly against contributing to any kind of 'drive to the bottom' for children's services. Children should be supported in the way that's best for them, not what is cheapest. Not only could that deprive them of the childhood they deserve and need, but it is also very short term financial thinking, in my view. And I don't just mean the lifetime costs to society of care-experienced adults who come into contact with mental health services or the criminal justice system. But also the extra support and placement moves that cost children and local authorities more when we don't get it right first time. Here are five reasons to avoid capped prices:

  • It drives down the price which impacts on the quality of service that can be provided. Ultimately it places children and young people at risk.
  • It strains commissioner/provider relationships, particularly when capping forces providers to increase their fees for other neighbouring frameworks or for spot purchased placements. The risk of working within limits set by price caps is too high.
  • It limits capacity for innovation and for investing in new services.
  • It presents a particular risk to small and medium providers that do not have the economies of scale that larger providers have. Nevertheless, these providers still have a vital role to play in the sector and often provide services which are otherwise not available.
  • It restricts placement choice for children. Not all providers can afford to bid for a capped fee contract, but they may still have carers that would be best suited for an individual child. Social workers and placement officers will therefore be unaware of carers working for IFPs who are not on the framework contract.

Instead, let's start to develop trust between commissioners and all service providers, involving local authority in-house services in that conversation. Trust can be in short supply in these times. Collaboration around identifying needs and developing cost-effective services to meet those needs is the name of the game, not a drive to the bottom, not now, and not for children ever.