Private companies receiving a growing share of DfE funding for children’s social care

Community Care research has found an average £3m a month of Department for Education money is going to private firms

Picture credit: Shutterstock/Rex

Private firms are receiving an average of almost £3m a month from the Department for Education to deliver children’s services reforms, more than double last year’s figure, Community Care research has found.

In the first quarter of 2015-16 (April – June 2015), private companies received at least £8.6m for social-care related work – working out at an average of £2.9m per month. This represents a 62% increase on the average of £1.1m a month received in 2014-15, when £13m was paid to private firms across the year.

Period Total spend (£m) Private (total spend £m) Private (monthly average £m) Non-profit (total spend £m) Non-profit (monthly average £m)
Q1 2014-15 31.1 3.9 1.3 27.2 9.1
Whole year 2014-15 126.9 13 1.1 113.9 9.5
Q1 2015-16 40.2 8.6 2.9 31.6 10.5

Analysis of the first quarter of 2014-15 compared to the same period in the 2015-16 financial year shows a similar trend. Payments to private firms accounted for 21% of the £40.2m spent in the first quarter of 2015-16, compared to 12.5% of £31.2m spent in the first quarter of 2014-15.

In the same period, the average monthly grant funding given to not-for-profit organisations for children’s social care-related work increased by 10%, from £9.5m to £10.5m.

Key contracts

The figures come from an analysis of thousands of payments of over £25,000 made by the DfE, and published under government transparency rules, between April 2014 and June 2015.

The DfE assigns an expense area to each payment it makes. Community Care’s analysis considered payments in the following expense areas: children in care, children’s services development and strategy, families work, safeguarding, early years, and special educational needs. We included fees to private sector professionals for advice, payments to organisations for implementing policy changes, and grant funding for third parties, including private and voluntary organisations.

In total Community Care identified £21.6m as being paid to private firms for this work between April 2014 and June 2015. More than two-thirds of the cash went to three multinational companies which have been awarded DfE contracts to deliver key children’s social care reforms. These were:

  • £9.3m paid to global management, engineering and development consultancy group Mott MacDonald. This includes £1.2m paid to design and implement the government’s adoption support fund last year and a £3.5m payment from the adoption support fund to the Cambridge Education Group, a specialist education consultancy owned by Mott MacDonald, in April this year. The company is due to receive more DfE money over the next eight months, after it was awarded a £2.1m contract to support implementation of flagship reforms of care for children with special educational needs under the Children and Families Act 2014. The full £2.1m is due to be paid between April 2015 until March 2016.
  • £5.1m paid to financial services advisory group Deloitte. This will include some payments made under a £4.5m contract awarded to Deloitte in June 2014 to administer the government’s children’s social care innovation programme. The innovation programme is the DfE’s flagship scheme to test out new models of delivery for social care and social work. The contract shows that £2.8m was due to be paid to Deloitte for this work in 2014-15, with a further £1.72m due to be paid out between April 2015 and March 2016.
  • £400,000 paid to accountancy KPMG in June 2015. This is likely to be the first payment under a £2.1m contract to develop assessments for a new three tier accreditation system for approved child and family practitioners, practice supervisors and practice leaders. The contract was awarded to KPMG and Morning Lane Associates and runs from March 2015 to March 2016.

The other third of the spending on private firms included payments to smaller consultancies and training and CPD providers.

‘Open procurement’ 

The findings suggest multinational firms are increasingly being seen by the DfE as the best solution for delivering children’s services reforms.

The contracts for Deloitte, Mott MacDonald and KPMG were all awarded in line with the government’s open procurement process with full details available on the government’s contract finder website.

Community Care contacted Deloitte, Mott MacDonald and KPMG ahead of this article’s publication. Deloitte declined to comment on its role in implementing children’s social care reforms. KPMG had not responded at the time of publication.

A Mott MacDonald spokesman said: “Mott MacDonald is an employee-owned company with experience in supporting the public sector to implement change and improve outcomes. We do not deliver children’s social care services directly, however, we deliver support to providers and local authorities, including social care and special educational needs and disability, on behalf of the Department for Education. These contracts were awarded following a full and open procurement process.”

Our research also looked at how much the DfE spent on key not-for-profit sector-led social care bodies. This found that, between April 2014 and June 2015, the DfE spent £258,000 with The College of Social Work and £220,000 with the Social Care Institute for Excellence.

Concerns

The DfE’s decision to award key contracts to private firms has sparked fears from some social workers that a few multinationals are holding a growing influence over children’s social care.

Ray Jones, professor of social work at Kingston University, said: “This is consistent with the general government thrust of preparing the ground for the marketisation and privatisation of children’s social work.”

However, sources involved in social work policy told Community Care that the DfE’s backing of large private firms to handle reform programmes is down to confidence in their ability to deliver work to the quality the government wants. Emails released under FOI earlier this month revealed that the DfE felt The College of Social Work was not delivering work at the “quality or pace” ministers wanted.

While the contracts we identified related to supporting the delivery of key social work reforms rather than running frontline services, Jones fears that they reflect an ideologically-driven appetite for private involvement that could lead to profit-making companies having a hand in core children’s services work, including child protection.

‘Improvement partners’

There is evidence the DfE is exploring ways to involve more third party organisations in children’s social care delivery.

The department commissioned healthcare consultancy LaingBuisson to do a market scoping exercise. This led to a “market testing” event held in conjunction with Birmingham City Council. Meanwhile, Deloitte’s contract to run the social care innovation fund requires it to engage new entrants or “unusual suspects” in the programme. An innovation fund bidders meeting was attended by representatives from several private firms including KPMG, Mouchel and G4S.

British Association of Social Workers professional officer, Nushra Mansuri, said members attending these and similar meetings had reported concerns a few large organisations were monopolising the direction of travel social work reform. Independent social workers wanting to bid for contracts reportedly felt they “didn’t have a chance”.

A Department for Education spokesperson said: “Where private sector organisations represent the best value for taxpayers and meet the high standards rightly expected by the public, we work with them to support policy development and innovation in children’s social care services. All contracts are made following a full and open competition as required by law.”

4 Responses to Private companies receiving a growing share of DfE funding for children’s social care

  1. Annie July 30, 2015 at 1:53 pm #

    This is fascinating – makes the decision not to offer what were, in effect, fairly meagre resources to enable TCSW to continue all the more interesting – not quite sure why a social work led organisation might not have been supported to develop capacity! Surely that might have been a more sustainable approach to take?

  2. david harrop July 30, 2015 at 3:31 pm #

    Is it me… but there is a bit of an unholy stench coming from this .. funds raised by taxation i.e. public monies (ours!) being syphoned off into multi-nationals, whilst public bodies are having their competency attacked due to underfunding, over loading, and a reputational and credibility kicking to boot..

  3. Melanie July 30, 2015 at 5:36 pm #

    Whilst working for a private company commissioned to run a frontline social work service I found their practice to be unscrupulous with little interest being paid to children and their families. Focus was on timescales, closing cases prematurely, bullying and harassing staff, withholding references, withholding pay, changing social work reports, being forced to work long hours, families being taken to initial child protection case conferences when there are no safeguarding concerns, children’s disclosures of abuse being ignored due to falling out of timescales, children being placed in local authority care when it was not necessary, being made to feel that the worker is the problem and not the organisation. Being told to change the outcome of your assessment but management not recording their decision and the list goes on.  


    Caseload’s were complex and relentless since the timescales are much shorter than the expected national guidelines and higher management were dismissive and not interested in solving the issue especially if it pertained to money. Bullying was rife and at times the bullied become bullies’ lower down the pecking order. 
Assessments were incomplete since the results of checks are not returned within the timescale permitted but nevertheless the assessment must be written with inaccurate or inadequate information, it didn’t matter so long as it was completed.

    
I wonder if the government is suggesting this as being the face of children services social work- how scary!

    • Jazz August 6, 2015 at 11:00 pm #

      Having just watched Newsnight with Camilla B…… Kids Club founder – Perhaps this will be a lesson to Government that existing service via SSD and regulated service agreements is the most sensible and risk aware method of providing PROFESSIONAL services for children!