Council asks children’s homes for 10% fees reduction by March

Manchester Council has given its children’s homes less than two months to deliver 10% cuts on current and future placements, Community Care has learned.

In a letter last week, which Community Care understands was sent to all approved providers of residential care in the area, the council announced it would require a 10% reduction in placement fees by 1 March.

A Manchester Council spokesperson confirmed: “Against a background of unprecedented cuts to the council’s budget we have written to providers to see if there are efficiencies that can be made without compromising the safety and well-being of children and young people placed there.”

But residential child care experts have told Community Care they are concerned the cuts will not serve children’s interests and could force many smaller homes out of business. They are also worried that other local authorities will quickly follow suit.

Roy Williamson, executive officer for the Independent Children’s Homes Association (ICHA), said cuts like these were now commonplace. “There will probably be similar letters going out all over the place soon, but providers, especially the smaller ones, will really struggle to reduce fees by that amount. The danger is that a lot of the detail in placements will be lost, such as therapeutic work or activities.”

Williamson advised providers to speak to budget holders about “where to cut”. “It would be sensible to challenge this before any decisions about what to cut are made,” he said.

“There needs to be an open dialogue between purchasers and providers, looking at placement costs and care planning. Providers need to push it back to local authorities and ask them where they want cuts to be made. You can’t ask for quality services at cut prices.”

Jonathan Stanley, former manager of the National Centre for Excellence in Residential Child Care, agreed that 10% cuts would make many homes unprofitable. “If the move is replicated elsewhere a significant number of homes will not have the reserves to draw on at a time when many are also experiencing reduced referrals,” he said.

A straw poll conducted by the ICHA, which respresents 82 organisations managing over 500 children’s homes, in November revealed 70% of its members had seen referrals dramatically reduced or cut completely. About half were said to be very worried that they would not be in business in a year’s time if current market conditions continued.

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