Contrary to its public image, fostering involves something a bit more complicated than "putting an extra potato in the saucepan". It involves taking into your home someone else's children - children who will have been traumatised by the loss of their own family, who may have been abused or neglected, and who may behave appallingly towards you for the duration of their stay.

For this often thankless task you will receive an allowance that may or may not meet your out-of-pocket expenses. You may receive excellent support from the placing authority or you may receive none at all. You may find yourself a valued and vital member of a team or you may be undervalued, patronised and left in the dark. And after decades of giving other people's children a safe, nurturing environment in your home for little or no financial reward, you will not be entitled to the same state pension that those who look after their own children can expect.

Given the unique situation many foster carers find themselves in, and the nature of the work, it comes as no surprise that there is a shortage of people who want to do it. Figures from the Fostering Network suggest that the UK has around 37,000 foster carers, and that another 7,800 are needed. Demand for foster placements has risen as professionals have recognised that most children do better in family environments, yet at the same time the increasing number of women who work full time has reduced the pool of potential foster care recruits.

Fierce competition for foster carers across local authorities has resulted in a spate of ugly squabbles, with councils accusing each other of what amounts to "rustling" of foster carers - sneaking into neighbouring territories unannounced and pinching their supply, rather than growing their own. The situation is further compounded by the growth of profit-making independent fostering agencies (IFAs), which often pay better rates and lure people away from the local authority.

In fact, while many local authority fostering managers see them as the enemy, IFAs' professional approach to foster care sometimes shows up how poor local authority practice is. Of course, some IFAs have been found to be seriously wanting, but new national minimum standards and the advent of the National Care Standards Commission will mean IFAs are facing inspection and regulation for the first time, which should weed out the cowboys.

In March this year, the government threw Choice Protects into this controversial pot. Spurred on by a damning Social Services Inspectorate report into foster care practice in local authorities,¹ and concern from the Social Exclusion Unit about the impact of unstable placements on children's educational achievement, minister of state Jacqui Smith announced a "major review of fostering and placement choice" which would aim to "provide stability for looked-after children and a better framework of reward and support for foster carers". According to Smith, one of Choice Protects' key objectives is a reduction in the number of out-of-authority placements.

But, unlike the adoption review, which led to the new Adoption and Children Act, Choice Protects is far more low-key. In fact, some would argue that it is practically invisible - including some social services departments and SSI inspectors who claim to have never heard of it.

The adoption review was personally backed by Tony Blair and led by the Cabinet Office, had an entire department of around 50 people working on it, was high-profile and has led to far-reaching legislation. By contrast, Choice Protects has a huge area to cover, a handful of people working on it, Jacqui Smith's part-time interest, little prospect of generating legislation, and almost no publicity at all. This is a strange set of priorities, given that the number of children who would benefit from good fostering practice is many times greater than the number who could ever benefit from good adoption practice.

Those involved in fostering are, by and large, grateful for any interest shown by the government in sorting out the complex mess it has become. And to be fair, Choice Protects may yet pull an impressive rabbit out of what looks like an unimpressive hat. The review has involved several "working groups", some of which seem to have been productive from the contributors' point of view; others less so. A conference is to be held in the new year for foster carers themselves, and the review is also planning to look at their training and support needs. Significantly, the review team has already concluded that it had "probably downplayed the contribution that foster carers make".

Carole Bell, who heads the looked-after children section at the Department of Health, and has been involved with Choice Protects from the start, says: "I would have thought that the minister would want the recommendations to be acted upon, because two-thirds of looked-after children are with foster carers. I can't tell at this point what level of leverage there will be for the recommendations.

Bell says the fostering model needs to be re-evaluated. "There are a number of things about foster care we want to explore. A lot of people have been worried about our model of foster care - it's still regarded as on a par with taking in evacuees during the war. But now we're using foster carers to do a very difficult job often with children who have some very complex needs. We need to look at what we expect foster carers to do and what their status is - so we're looking at things like their rewards, and their pension entitlement, and how much training they need and what support they get."

The financial aspect, in particular, needs to be sorted out, she says. "For example, there's quite a range of rewards paid for foster care. We are looking at what is sufficient, and at the tax position. The Treasury and Inland Revenue have agreed to get everything on the table and look at tax treatment of foster carers. There are several options, but it's an extremely positive move because they clearly don't want people forced out of fostering by their financial situation. Also, at present foster carers aren't entitled to a pension - we are working with the Department for Work and Pensions and the Fostering Network to look at how we can make a difference to that - we may have a solution."

All very promising, but the timescale may be working against the Choice Protects team. Early findings should be with Jacqui Smith for consideration by March, leaving the Choice Protects team little time to do the in-depth, well-researched review that many people have been calling for.

In the longer term, there may be hope on the horizon. The local government settlement announced at the start of December included a Choice Protects grant, which is set at around £20m next year, growing bigger - by an amount unspecified as yet - in years two and three. Bell says of the grant: "We see that as having the potential to pump-prime and strengthen local authority fostering services. They will have a wide choice about how to use that money - if they wish to look at how they reward foster carers, then they can. We think people need to look at this area with a sharper focus, and we've identified funds to help them do that."

Unfortunately, there is little concrete evidence on how much it really costs to look after a child, which means that setting rates of pay for foster carers is difficult. Although the Fostering Network publishes recommended rates, the range is very wide, and in reality most foster carers are either out of pocket or are simply covering their expenses. They are being asked to look after children with increasingly specialised needs, making their role more akin to that of a residential social worker who is on duty 24 hours a day, seven days a week, than to that of a casual carer providing a bed and a seat at the family dinner table. Yet many are working for cost price or less.

Vicki Swain, policy and campaigns manager for the Fostering Network, who has been involved in Choice Protects, believes a proper "wage" would help. She says:"We would argue that there needs to be a professionalisation of foster carers. The job has changed and we need to recognise that. Also, paying people means they have a duty as an employee to their employer - for instance to turn up to training sessions. And that's better for the child."

She adds: "We've been calling for a review of fostering for well over 10 years, but this isn't the review we wanted. We wanted a thorough exploration of all the issues facing fostering. For example, we wanted it to look at the purpose of fostering, because until you know what its purpose is, it's very difficult to establish what foster carers should be paid. And we wanted some proper evaluation and research into fostering. At the moment, no one knows how much it costs to look after a child."

The very existence of the review can cause problems for campaigners, says Swain."We don't want to criticise Choice Protects before it has had a chance to report. It may be that they decide there's too much to cover, and extend the deadline or draft a few more people in. But it is very difficult to be critical of fostering practice at the moment because every time it's mentioned Jacqui Smith says 'well, we're in the middle of a review of fostering'. It's very difficult to campaign for anything while it's still going on."

Perhaps the real issue about the lack of foster carers centres on the suitability of placements. Children need, ideally, homes and families similar to their own, within the same area. A 14-year-old boy with a passion for football would, ideally, be placed with a foster carer for whom the concept of sport was not abhorrent, and who had some experience of caring for teenage boys.

Unfortunately, the shortage of foster carers means many children find themselves with far from ideal carers, away from familiar streets and places, away from school, and losing contact with friends and extended family. In the worst case scenario, children end up in a damaging game of musical chairs that moves them from placement to placement as gaps become available.

The answer is, of course, more foster carers - which Choice Protects may, or may not, contribute to. But it is likely to take a significant shift in attitudes, pay and support before sufficient numbers of people view fostering as both rewarding, and a viable proposition.

¹ Social Services Inspectorate, Fostering for the Future, 2002, at: www.doh.gov.uk/ssi/fosteringfuture.htm