Leaked DfE document reveals scope of new advisory group on children’s social care profiteering

The Market Interventions Advisory Group (MIAG) was first announced in the Spring Budget in March and was referenced at the presidential reception for the new Association of Directors of Children’s Services (ADCS) Andy Smith on 16 April.

It will be led by Steve Crocker, former director of children’s services for Hampshire and Isle of Wight councils, who was ADCS president in 2022/23.

• Key children’s services challenges to shape next ADCS presidency

• Competition authority study raises prospect of commissioning reforms

Documents from an online presentation by the Department for Education during the group’s first meeting on 18 April, seen by CYP Now, lays out its goals.

These include to:

• Substantially bring down the cost of placements, particularly for children with the most complex needs, without destabilising the market.

• Tackle profiteering by providers.

• Boost the amount of provision available where there are national and/or local shortages to improve outcomes for looked-after children (more suitable placements which are closer to home).

• Stabilise the children's social care placements market and make it more resilient to market forces and possible shocks.

The document says that the goals have been set because “spending on looked-after children placements have increased significantly over the last few years, [and] local government finances are under pressure as a result”.

In the report the DfE also puts forward its strategy for “fixing the placements market”.

The strategy will initially focus on “improving and better understanding the market and how it’s operating, boosting local authority market shaping ability, alongside encouraging greater supply and diversity of provision”.

The document, entitled ‘Introducing the MIAG and setting out the proposed scope and preliminary thinking by DfE regarding the children’s social care placements market’ states that in 2022/23 councils spent £4.5bn on residential and foster care placements, up from £2.7bn in 2015/16.

It cites findings from a 2022 report by the Competitions and Markets Authority, carried out alongside the Care Review, which found that a “fragmented” commissioning system leaves councils unable to use their role as the purchasers of placements to negotiate on prices or to plan properly for the future.

The DfE document defines profiteering as “making large profits by charging high prices for goods that are scarce and/or essential”.

It adds that while the involvement of companies run by private equity firms “has been linked to worsening quality in some sectors; there is little evidence of this in children’s social care, but more data and analysis is needed”.

The DfE is yet to release any public information about the group, including its membership.

The leaked document states that it will meet “at least every four weeks”.