Ofsted has increased annual fees paid to it by children’s homes by 10% from 1 April 2010.
Although children’s homes have admitted the increase is fair, there are fears that it could be the last straw for many homes already coming under pressure from local authority purchasers to drop their fees.
Ofsted produced an analysis late last year which revealed a mismatch between fees paid to Ofsted by providers and the actual cost of inspections conducted by the regulator.
Children’s homes were found to be paying less than the cost of inspections, although other providers, such as local authority adoption agencies, had been paying too much and have had their fees reduced accordingly.
Janet Rich, children’s services development officer at the National Care Association (NCA), has called on the Department for Children, School and Families (DCSF) to clear up the situation.
“What I would like to see is a clear directive from the DCSF to local authorities that admits the strains on children’s homes and that local authorities should consider this when looking at fees,” she said.
“With many fixed costs continuing to rise dramatically there is a limit to how much providers can absorb additional cost increases and it would be ironic if the cost of regulation – which is supposed to improve standards – forced some providers to cut corners in service and quality.”
Rich said a creative solution would be for local authorities to automatically add the 10% onto the fees they are currently negotiating with providers.
Councils in London and the East Midlands have said they expect providers to cut their fees by 2% this year.
Despite the added financial pressure, Rich applauded Ofsted for its considerate approach to the fees, spreading the amounts to be made up over a number of years at a level of 10% rather than hitting children’s homes with the owed amount upfront.
Providers whose Ofsted fees are set to increase include adoption support agencies, both voluntary and local authority fostering agencies, smaller residential family centres and residential special schools with fewer than 30 pupils.
Local authority adoption agencies, larger residential family centres and residential special schools with more than 30 pupils will see their fees drop.