East Midlands councils follow London and seek 2% fee cut

Councils in the East Midlands have followed London’s lead and asked providers of foster care and residential care to drop their fees by 2%.

The East Midlands Improvement and Efficiency Partnership, made of up nine authorities covering Nottinghamshire, Derbyshire, Leicestershire and Rutland, sent a letter to key providers last week. It stated that due to pressure on councils to make savings, and in view of the low level of inflation in the area, providers should cut their fees on all existing and new placements from April 2010.

The letter acknowledged that the move might risk the “commercial viability” of some providers or risk compromising the quality of services. The partnership has given such providers less than a month to outline their case for exemption but also stated “we do not anticipate being able to agree to uplifting fees in the forthcoming financial year”.

London providers have already slammed a similar request from London Councils as “unachievable and unrealistic”.

The authorities have scheduled meetings for 2 February with both residential care homes and independent fostering agencies to “discuss ways we might both mitigate against the impact of the zero percent fee uplift” and to seek views on how to reduce costs without compromising quality.

Robert Tapsfield, chief executive of the Fostering Network, said although he understood the reasons councils were seeking the cut many fostering providers who had already “cut costs to the bone” would find it impossible.

He raised the possibility that the move would see a return to individual contract negotiations.

“Commissioning bodies must be prepared to negotiate individually with providers, focusing first and foremost on maintaining and improving the quality of the service offered to children. We would therefore expect to see a range of different settlements between local authorities and independent providers,” he said.

Andy Pallas, partnership and contract manager at fostering and adoption charity TACT (The Adolescent and Children’s Trust), said he felt it was unlikely other councils would follow the pattern of London and the East Midlands.

The South West region already had a three-year contract in place from April 2009 while the North West and West Midlands, he said, were currently undergoing similar negotiations to be started in April 2010.

“Unless people go about tearing up contracts, I think this is unlikely to happen elsewhere,” he said.

Related articles:

London Councils asks children’s homes and foster care providers to cut fees

Providers unhappy at London Councils fee request