Children’s care outsourcing linked to unstable out-of-area placements – study

Researchers at Oxford University have identified a link between the outsourcing of children’s services to profit-making providers and the number of out of area and unstable placements.

A new study led by Anders Bach-Mortensen, Benjamin Goodair and Jane Barlow – all from Oxford’s Department of Social Policy and Intervention – reveals that for-profit outsourcing is associated with more looked-after children being placed outside their home areas and ‘greater placement instability’ over time.

The researchers estimate that an additional 17,000 out-of-area placements from 2011 to 2022 may be attributed to increases in for-profit provision.  

Recent years have seen growing controversy over the role of profit-making private providers in the children’s care system, with accusations of profiteering and concerns over the growing role of private equity investors. Last year the Local Government Association said the ten largest providers of children’s social care placements had made £300m in profit over 12 months.

Concerns have also been raised about the rise in out-of-area placements, partly driven by rising numbers of children needing care – particularly those with complex needs – and a shortage of available placements in many localities.

Bach-Mortensen and Goodair concluded: “Despite the numerous independent reviews and investigations, a significant proportion of children are still being placed in unstable or out-of-area care, exposing already vulnerable children to additional risks.

“Our analysis shows for-profit outsourcing is consistently associated with worse placement outcomes among local authorities. This suggests that increasing the already significant proportion of for-profit children’s social placements may not be the most effective strategy to improve outcomes in the children’s social care sector.”

According to the report, by 2022 38% of all children in care were placed with for-profit providers – an increase of 9% points since 2011. However, there is large variation in how much local authorities use the for-profit sector.

“We observe that increases in for-profit outsourcing are associated with worse placement outcomes on average,” the report said. “For-profit outsourcing is consistently associated with more children being placed outside their home Local Authority and greater long-term placement instability.”

The study concluded: “Despite the numerous independent reviews and investigations, a significant proportion of children are still being placed in unstable or out-of-area care, exposing already vulnerable children to additional risks.”