How children’s homes providers can survive the economic chill












Residential provision for children in care will have to change as the economic chill continues. Camilla Pemberton reports on how providers can take ownership of the challenges ahead

After four decades of living and working in children’s homes, Ross Baker* is preparing for a lifestyle change. It is not something the 44-year-old residential care manager is happy about but, like many, he fears the impending slashing of government spending will leave him with little choice.

“Children’s homes are my life. I grew up in one, left school to work in one and now I manage one. But referrals have plummeted and, if they don’t pick up, we will be forced to close before the end of the year,” he says.

His experience is reflected across the country. As councils struggle with drastically reduced budgets, many are turning away from residential placements – the most expensive child care option for corporate parents at over £100,000 a year – or asking providers to deliver huge savings.

Just two weeks ago, Manchester Council wrote to all its children’s homes demanding 10% cuts on current and future placement costs by 1 March. Providers are expecting similar prophecies of doom, according to Roy Williamson, executive officer for the Independent Children’s Homes Association (ICHA). He says big cuts could push smaller homes beneath profitability.

Poorer outcomes

Outcomes for children will also be poorer, he says: “Cuts will mean stripping placements of their detail such as therapy, staff training and recreational activities.”

A recent straw poll by the ICHA, which represents 82 organisations and more than 500 homes, found 70% of members were experiencing massively reduced referrals or none at all. But it is difficult to calculate how many homes are under serious threat of closure. No official figures are kept and, Baker admits, providers are nervous of revealing the level of pressure on their business, aware that forecasting financial viability is an important part of the job.

But it is clear that the economic climate is likely to dramatically change the landscape of residential provision for children in care.

Ofsted’s latest report found large, ­independently run children’s homes perform better than small, independent homes or those run by councils. Kevin Gallagher, deputy manager of the Continuum Care and Education Group, has worked in smaller and larger organisations. His experiences echo Ofsted’s findings. “In a difficult climate larger providers have more resilience to flex and bend with any problems that arise while ensuring consistency of staff levels and quality,” he says.

Corporate parents

But Williamson believes responsible corporate parents need a range of placement options. “If children who need a residential placement go into foster care or kinship care, or those who need a specialist placement go into a basic home, the placement will not work.

“These young people will come back into the system. What will happen when the right referrals are made but there aren’t enough providers because a large chunk of the sector has been forced out of business?

“The government needs to work with us and recognise that, as a result of its policy, pressure is on both purchasers and providers, to the detriment of children.”

The government has been silent on the possible closure of children’s homes, and some experts believe providers must start looking to mitigate risks and maximise opportunities themselves. They argue there are several areas where this can be done:

Independent living: From April councils will not be able to use bed and breakfast accommodation for care leavers. Many will be tempted, Gallagher says, to consider the financial implications of moving older teenagers in residential care into independent living. “These services could be an area of service expansion for providers, so long as services offer the right degree of expertise and support to care leavers,” he says.

Multi-agency working: Engaging in better multi-agency working – particularly with youth offending services, child and adolescent mental health services, teenage pregnancy and substance misuse projects – will help providers be competitive in a difficult market and understand other agencies’ priorities, Gallagher says. “Providers also need to ensure high standards and evidence their outcomes.”

Care planning: Providers should talk to purchasers about care planning and where reductions should be made if they are being asked to cut, Williamson says: “It’s down to councils. They can’t ask for the same services at cut prices.”

Audit local needs: The Sufficiency Duty, which comes into force in April, aims to reduce council use of out-of-area placements and could help improve the sector and provide more certainty around placements, according to Jonathan Stanley, former manager of the National Centre for Excellence in Residential Child Care. “If all councils do an audit of local needs they should be able to assess what their area requires and what they will always need to outsource,” Stanley says. “It has the potential to provide the data councils need to plan effectively.”

Localism agenda: This could also be fortuitous, Stanley says. “There’s no reason why local residential staff and leaders shouldn’t set up social enterprises and take on the management of existing local authority homes. Commissioners will be able to consider the best placement rather than looking in-house first.”

Support hubs: Children’s homes could develop into hubs for family support services, outreach work and early intervention services as well as residential units, says Jill Sheldrake, director of social care at the Together Trust.

Short-term residential placements: The Together Trust recently made its services more diverse by developing intensive short-term residential placements (minimum six months) for children who are not ready to live with foster carers, even though this is what their care plan recommends. Residential staff work with foster carers during the placement, after which children are moved into foster care. Sheldrake says similar models could be developed, with benefits for children and providers.

* Not his real name


‘Some people may think I’m mad to start a children’s home’

Rachael Reid, has just opened the new Kent-based children’s home Walmer House run by Back on Track Services.

“For years I worked in the youth prison service so I have experience of dealing with some of the country’s most challenging young people,” she says.

“I want to help divert young people from getting to that stage. Having grown up in a children’s home myself, I wanted to run one that could give disadvantaged children a second chance.

“So my husband and I converted our family home into a four-bed residential unit for young people aged 12-17. We haven’t had any placements yet but it’s early days. We began this process in April 2009 and by November 2010 we were a registered home. We’re awaiting our first Ofsted inspection.

“The children’s home I grew up in was large and noisy. Ours is small so we can focus all our attention on the young people and give them our full support.

“I have built a database of contacts and have consulted experts to help promote the business. We have recruited a fantastic team, comprising six staff, myself and our manager who has more than 20 years’ experience in residential child care. All have received extensive training.

“Some may think I’m mad to start a children’s home at a difficult financial time when many are closing, but things are going well and we feel positive. We look forward to Fridays when we receive enquiries about emergency weekend placements – I’m sure one enquiry will turn into a placement soon. We hope to have two placements by the end of February.

“The care system has definitely improved since my days. Children’s homes are getting so much better and we intend to be a part of that.”

This article is published in the 10 February 2011 edition of Community Care under the headline “Rescue remedy for children’s homes”

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