Councils’ dual role distorts market and acts against need of children

The role of local authorities as commissioners and providers may be preventing them from procuring the best value services for children, according to government-commissioned research.

The study highlighted mistrust between commissioners and private providers, which would only be resolved by a greater separation of the two roles, and “evidence that there is not a level playing field”.

These issues were found to be most stark in the commissioning of children’s homes and fostering services, where there was “evidence that market barriers are preventing placements from meeting children’s needs as effectively as possible”.

Andrew Cozens, strategic adviser for children, adults and health services at the Improvement and Development Agency, said the concerns arising from the dual role were inevitable. “A good approach to commissioning requires councils to involve private providers in planning services and being clear about what opportunities exist,” he said.

The researchers, from PricewaterhouseCoopers, found that the six councils in the study preferred to commission in-house services rather than those from other providers. There was no evidence to support councils’ view that private provision was more expensive.

The study found that half the councils were not attempting to develop local children’s homes and fostering markets with private providers. Where talks did take place, it was found councils could procure cheaper services, suggesting “best value for money is not being achieved everywhere”.

Andrew Rome, a spokesperson for the Independent Children’s Homes Association, said: “We are concerned that the current operation of the sector could cause good children’s home providers to go to the wall.”

DfES Children’s Services: Over-arching Report on Children’s Services Markets

Main concerns raised in study

  • The potential for conflict of interest caused by councils’ dual role as commissioners and providers of services.
  • Commissioning processes are poorly developed and often disjointed across local authorities.
  • Poor market intelligence data being held by councils.

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