Memorandum submitted by the New Economics
1.1 This is the response from nef (the new
economics foundation) to the Children, Schools and Families Committee
inquiry into looked after children. It draws on nef's Measuring
What Matters programme, which is looking at how a system of measurement
which maximised social, environmental and economic well-being
would improve decision-making and create greater public benefit.
1.2 Our research has found that competitive
tendering within the commissioning process is jeopardising the
health and well-being of young people in care and in danger of
undermining the aims of Care Matters. As the National Centre
for Excellence in Residential Childcare (NCERRC) have recently
the White Paper acknowledges the need for a sufficient and diverse
range of care (including specialist residential) within each borough;
yet the bill currently before parliament does not make provision
for this. We know that local authorities are in fact making less
use of residential care where they can and believe this will create
greater instability and result in children being placed further
from home, or in unsuitable placements.
1.3 The problems in commissioning in this
area lie in the lack of strategic funding for the third sector
and a poor management of the market. An oversupply of beds (which
was originally the result of the large perceived profits that
could be earned in the sector) has put downward pressure on price.
Local authorities, under budgetary constraints and in the absence
of information on quality are being incentivised to opt for cheapest
rather than best value. This has squeezed smaller, niche providers
(often voluntary sector) out of the market, and compromised quality
across the board. Indeed, one of the providers participating in
nef's research in this area has had to scale back on their residential
care because they can no longer compete. This has been exacerbated
further by the ramping up of efficiency-savings targets that now
require 3% year-on-year "cashable" savings.
1.4 The introduction of crude, unfettered
market mechanisms into the purchasing of person-centred services
is putting some of society's most vulnerable young people at even
greater risk of exclusion. nef have calculated that this short-term
measure will generate huge costs to society in the long run through
the burden it will place on social services; more importantly
than this it will ruin lives of those that the state seeks to
1.5 Commissioning should be about achieving
greater public benefit not short-term "false economy"
savings. Social, environmental and economic outcomes can and should
be at the heart of the commissioning process to ensure the sustainability
of those organisations that are delivering greatest value and
to ensure every pound spent goes further.
2.1 This is the response from nef (the new
economics foundation) to the Children, Schools and Families Committee
inquiry into looked after children. This submission will focus
on the proposals for change in relation to:
1. health and wellbeing; and
It will conclude with a list of recommendations
for policy makers.
2.2 nef is an independent think-tank that
undertakes innovative research and thinking on economic, environmental
and social issues. This consultation response was co-ordinated
by the Measuring What Matters team at nef. Measuring What Matters
is a research programme investigating how government policy making
could be improved by measuring and valuing what matters most to
people, communities, the environment and local economies. It seeks
to move away from a culture within government that is short-term
and target-driven, towards one that enables the pursuit of real
social, environmental and economic well-being. One strand of the
Measuring What Matters research is focusing on children in residential
care, in particular:
(a) Examining how a more child-centred set of
indicators would change behaviour and bring about improved outcomes
for children and young people in care and
(b) Investigating the long-term costs and benefits
of investing in different models of care.
2.3 Two care providers and approximately
50 young people were involved in the research. The young people
took part in group work to help us develop a new indicator set
and also completed corresponding questionnaires. To develop the
economic analysis we drew on aggregate data from the providers
and published data.
3. HEALTH AND
3.1 In this section we will set out the
findings from our research in relation to two areas:
Commissioning for health and well-being
Measuring health and well-being,
3.2 Commissioning for health and well-being
3.2.1 Our research into residential care
has found that the contestability model in local public services
is disincentivising providers from developing services that enhance
children's well-being. As Unintended Consequences argues the imposition
of centrally driven financial efficiency savings targets, combined
with the drive towards greater competition and contestability,
is eroding the effectiveness of local public services as commissioners
of public services focus on short term costs rather than longer
term outcomes for service users. (http://www.neweconomics.org/gen/z_sys_PublicationDetail.aspx?pid=248)
3.2.2 Our research into looked after children's
services has found that this impacts particularly severely on
smaller and medium sized providers that place particular emphasis
on promoting health and well-being benefits. Providers that we
have worked with such as Shaftesbury Young People are scaling
back on their residential placements because this is what the
market is dictating to them. As they told us during this research:
"the market is telling us to move out of residential care".
The downward pressure on prices is forcing them to compete with
bargain basement placements that do not provide the same level
of "wrap-around" and child-centred services that deal
with the range of complex emotional and behavioural problems that
are common amongst their clients. As there is over-supply in the
residential market at present, local authorities are taking advantage
of this to negotiate even harder on prices. This scenario has
led to providers being forced to view essential psychotherapeutic
and advocacy services as "nice to have" and staff being
pressurised to slim down their offering to compete on price.
3.2.3 This is very short-termist; these
decisions have far reaching and lengthy consequences that do not
appear on the balance sheet but which social services, and society
generally will be picking up in the future. Our research (forthcoming)
has found substantial cost savings from investing in child-centred
models through reduced involvement of the young person with social
services, as well as savings to the young people themselves from
being able to make positive transitions into adulthood. nef is
concerned that the market, as it operates in residential care
directly contradicts the rhetoric and sentiment in Care Matters
and jeopardises the health and well-being of one of the most vulnerable
groups in society.
3.3 Measuring Health and Wellbeing
3.3.1 When we asked children and young people
what kinds of things mattered to them they overwhelmingly said
that it was important that they felt good about themselves and
that they felt loved and cared for. We welcome the fact that Care
Matters contains provision for improving the health and well-being
of children in care, as well as indicators to measure this in
the national indicator set. Taking child self-reports seriously
as part of this is essential. In relation to the current indicators,
there is a stronger emphasis on physical health, while a factor
in subjective well-being, it was relatively less important to
how people feel about themselves and their lives than a range
of other factorsfrequency and type of social interactions,
family relationships, how people spend their time, the extent
to which people feel autonomous and in control of their lives,
Measuring well-being should also take positive well-being into
account. For example, relieving feelings of anxiety and depression
may be important for some people, but it is not the same as promoting
flourishing and fulfilment.
4. CARE PLACEMENTS
4.1 This section will focus on two areas:
Use of residential care in the overall
Measurement of effectiveness in placements.
4.2 Use of residential care in overall provision
4.2.1 There is a move away from use of residential
care in many boroughs with Director's of Children's Services preferring
to opt for foster and kinship care over residential. There are
two reasons for thisresidential care is seen as disproportionately
expensive and has a poor reputation in relation to outcomes. However,
as Care Matters acknowledges residential care should still
have a role in overall provision:
Residential care will always be the placement
of first choice for some children and we know that some children
say that they do not want to be in foster care. We need these
children to be able to enjoy a genuinely excellent care experience,
drawing on the best of what homes in this country and elsewhere
do now. (4.49)
4.2.2 Young people echoed this throughout
our research, giving the following reasons for why residential
care was right for them:
They had come to residential care
after many failed foster placements, and had some negative experiences
of foster care.
Placements were appropriate because
staff in care homes often had specialist skills for dealing with
children with more acute emotional and behavioural problems.
As they were older coming into care,
young people saw foster care as a threat to their relationship
with their birth families and were uncomfortable with thisthey
liked the fact that residential staff were paid to look after
them, as this was more straightforward.
4.2.1 As mentioned above, commissioning
of placements largely being spot purchased and placements are
becoming determined by cost rather than need. There is the need
to distinguish between unnecessarily high cost and essential high
cost. The key to understanding this is instituting a proper system
4.3 Measurement of effectiveness
4.3.1 The residential care population has
been relatively stable for many years now (ie demand has not fluctuated).
In addition, the teenage population is set to rise in coming years,
which could mean an increase in demand. In spite of this many
local authorities have now closed all of their children's homes
and Directors of Children's Services told us that they do not
believe that residential care any longer has a role. No doubt
budgetary pressures impact on this decision but the other reason
is that it has become associated with negative outcomes. We would
argue that this is partly a lack of a robust approach to measuring
effectiveness in this area.
4.3.2 Children in residential care tend
to enter care when they are older, and/or have been through a
series of unsuccessful foster, or kinship placements. Indeed,
some of them will come from secure accommodation, or psychiatric
units. All of these experiences will have impacted on their health,
well-being and ability form healthy relationships. A residential
placement cannot be expected to repair years of abuse, or neglect
4.3.3 When comparing the "performance"
of this group it should therefore be with an appropriate benchmark
eg other "in difficulty" groups (children that were
known to social services but not taken into care), rather than
the general population of young people. Also, baselines are completely
absent and without them it is impossible to compare the difference
individual organisations have made. It is not just about comparing
homes but also about looking at what was happening before the
child came into care and whether their progress has improved.
Rather than taking a blunt snapshot at 16 we would advocate measuring
"distance travelled" by each young person. If these
the same tool was used across all services this would enable commissioners
to match different levels of need to different models at care.
At present it is impossible to do this, and the sector (and local
authorities) has become associated with outcomes that they are
not necessarily responsible for.
4.3.4 In other European countries such as
Denmark and Germany where outcomes are better more use is made
of residential care. However, the models of care differ greatly;
they follow a pedagogic philosophy, staff/child ratios are higher
and staff are well trained. There is not a huge variation in price
between these approaches and those used in England and Wales.
The more residential care becomes marginalised as a "place
of last resort" within the sector, the more demoralising
it will be for staff and young people the worse the outcomes and
the stigmatisation will become.
5.1 Commissioning for better outcomes
1. There is the need for an investment strategy
to sustain the third sector that are providing essential services
to children in care. nef advocates a mixed funding approach that
includes grants as well as commissioned services.
2. Abandon competitive tendering that is
failing young people and return to a system where providers cost
their services and local authorities chose to purchase them if
they are suitable.
3. Make greater use of block contracts and
longer term contracts which are essential to the sustainability
of providers. Stability for young people is a key target for the
government, and yet short contracts proliferate. A system is needed
that ensures the finance of a placement is assured for as long
as the placement is needed.
4. As stated in Care Matters, local
authorities need a comprehensive commissioning strategy that ensures
a sufficient and diverse provision of quality placements are available
and that the sustainability of providers is protected. This may
involve sharing beds across borough boundaries to ensure that
there are places always available but the costs of maintaining
them are not burdensome.
5. Efficiency savings targets, which were
ramped up in the Comprehensive Spending Review have put further
pressure on local authorities to deliver more services for cheaper,
and the impact of this is being felt by smaller, niche providers.
These targets need a massive rethink, particularly in relation
to services for vulnerable groups where errors can have catastrophic
impacts on people's lives. A proper system of measurement should
be introduced that enables councils to commission for social,
environmental and economic outcomes.
6. Our research shows that commissioners
need better information in order to (a) understand the link between
different types of care and outcomes for young people and (b)
the impact that placement decisions have on young people's life
7. There is a need to drive up standards
in residential services, which have suffered from the "race
to the bottom" approach described above. Our research found
that carers were more likely by a ratio of 3:1 to report more
negatively about the progress of the young people than the young
people themselves. This may point to an institutionalised negativity
within residential care. Young people should be involved in the
design, delivery and measurement of services, so the services
are "co-produced" and the contribution and strengths
of young people are valued.
5.2 Measuring What Matters
1. A system of measurement that provides
better information on the impact of different types of care on
outcomes for young people is required to improve placement decisions
but also to give greater accountability to young people.
2. This will require a more sophisticated
system of data collection that would include:
Taking baseline measures are when
young people enter care.
Measuring distance travelled and
over the long-term.
Using realistic benchmarks.
3. Measure the things that would matter
to any young person, or their parents, in their journey through
childhood and adolescence. Our research to date has found that
the types of indicators being used focus too much on outputs and
processes, rather than the things that really matter to young
people, such as the quality and stability of relationships (with
carers and birth parents) and general health and well-being. The
result is a system of service delivery with a disproportionate
emphasis on adhering to policies and procedures. In addition,
data on the performance of services is geared towards minimising
harm and risk to young people while in care, rather than maximising
their strengths and abilities. Using more child-centred indicators
would, we believe, incentivise a more child-centred approach within
care homes. Initial findings from our research suggest that measures
based on reports from young people and their carers would enrich
the information that is used to measure progress.
4 Unpublished paper by setting out a need for an amendment
to the bill regarding diverse and sufficient care. Back
Hicks et al, 2007 Managing Children's Homes, London:
Jessica Kingsley Publishers. Back
Petrie et al, 2006 Working with children in care: European
perspectives, Maidenhead: Open University. Back