Councils referring more children from residential to foster care, report agencies

IFAs say trend reflects positive impact of residential care, as well as cost considerations, but stress need for moves to go at child's pace and to allay foster carers' concerns over risk

Teenage girl in care
Photo by Darren Baker / via AdobeStock

Councils are referring more children from residential to foster care, independent fostering agencies (IFAs) have reported.

The trend reflects both the progress made by children in residential placements, as well as cost concerns on councils’ part, agencies told their umbrella body, the Nationwide Association of Fostering Providers (NAFP).

But they warned that such moves needed to go at the pace of the child, to help manage their anxieties, and also stressed the need to allay foster carers’ concerns about young people coming from children’s homes having particularly high needs.

The findings came in NAFP research with 23 IFAs tracking trends in referrals from councils from 2019 to 2022.

Rising numbers of residential-to-fostering moves

Though the report did not include numerical information – because of difficulties in separating referrals from re-referrals – it published graphs showing a doubling in the number of cases of children being referred to IFAs from residential care from 2019-21. Agencies also reported increasing numbers of such “step across” referrals in 2022, particularly in England.

The report said the trend was driven by:

  • Cases of children who preferred, and were better suited to, foster care but had been placed temporarily in a children’s home due to a shortage of appropriate placements.
  • Children making significant progress in residential care due to effective therapeutic interventions, making them ready and willing to move to a family-like setting.
  • Local authorities being “increasingly concerned about the high cost of residential care” and so exploring foster care with children.

IFAs said that, while some children moved seamlessly from foster to residential care, others needed a planned transition that could take several months, with it being “fairly common for children
to experience anxiety and change their minds about a move”. However, some councils took a “blanket approach” to step across referrals, IFAs claimed.

Agencies also said that they sometimes struggled to convince carers to take referrals from residential care. Many believed the young people “would have extremely high levels of needs and that risk factors would be difficult to manage” because of children’s homes reputations as a placement of last resort.


On the back of its findings, the report made the following recommendations about step across placements:

  • Local authority placement teams should ensure children agree to the move and the transition happens at their preferred pace.
  • Councils should enable the prospective fostering provider to liaise with the relevant children’s home during the referral period so they can share information.
  • IFAs could consider ways they can support foster carers to understand the varying needs and wishes of children in residential care to encourage them to take children from these placements.

IFAs taking more children

The net number of IFA placements, and agencies’ share of fostering provision, grew in England from 2018-22, according to Ofsted data, and this was reflected in the NAFP report, which found rising referral numbers from 2019-22.

Within this overall rise, agencies reported increases in referrals for younger children, parent and child placements, unaccompanied asylum-seeking children and those with additional needs.

Providers reported a “sharp increase”, particularly since spring 2022, in referrals for children – some very young – with deteriorating mental health, with rising numbers self-harming as well. Within parent and child placements, IFAs had also witnessed an increase in parental mental health problems in parent and child placements, since the pandemic began.

They said that these placements required a specific skillset on carers’ part, as did other specialist placements, such as those for disabled children.

However, IFAs reported that councils sometimes classified a referral as being for a “standard placement”, when agencies felt more specialist provision was needed. In some cases, children were referred whom IFAs felt would benefit from a residential placement.

It also said that local authorities needed to have “greater awareness and appreciation of the type and level of support that even the most skilled and experienced foster carers need when caring for children with increasingly complex needs”.

Need to improve quality of referrals

The report stressed the need for “high quality assessments to better inform decisions about the type of placement that was being sought for each individual child”.

It said the quality of referrals varied within, as well as between, councils and this was driven by factors including the time pressures on, and turnover of, local authority children in care social workers.

Where a child was moving from another placement, agencies reported that “the knowledge and experience of the foster carer and/or supervising social worker (or sometimes residential staff) was often not harnessed to ensure a new referral was accurate and reflective of the child’s needs and wishes”.

NAFP chief executive Harvey Gallagher said the key message from the report was the importance of children being in “most appropriate placement to meet their needs”.

“Not only is this best for children, but it is also the best way of spending hard-pressed local authority budgets,” he added.

DfE fostering plans

The report comes in the wake of the Department for Education’s consultative strategy for children’s social care, published last month. Its key measures on fostering are:

  • Investing £27m in recruiting and retaining foster carers from 2023-25, with a focus on particular shortage areas such as sibling groups, teenagers, unaccompanied children, children who have suffered complex trauma or parent and child placements.
  • £3m of this will go towards a regional recruitment project in the North East.
  • Increasing national minimum allowances for foster carers by 12.43% in April in reflection of the rising cost of living.
  • Testing the development of regional care co-operatives, collectives of local authorities that would take over responsibility for commissioning care placements from their member councils. The DfE believes this will widen the choice of placements available for children, while also reducing “excess profit making” by large children’s home and fostering providers by improving the quality of local authority commissioning.

On behalf of the Association of Directors of Children’s Services, president Steve Crocker said: “Finding the right homes for children as close to the people and places they know is a key part of this, however, demand for placements far outstrips supply, including for foster homes, making this increasingly difficult to do.

‘Worrying rise in placement costs’

“The rising costs of placements is also very worrying and financially problematic for local authorities as is the profiteering by some private providers on the backs of vulnerable children.

“We need more placements, of all types for children when and where they need them and greater government action on profiteering in the children’s placements market, regional care co-operatives will not provide the whole solution to these pressing challenges.”

The ADCS also backed the NAFP report’s call for a national recruitment and retention campaign for foster carers, which Crocker said would “complement the work local authorities, and regions, are already doing to recruit and retain carers”.

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4 Responses to Councils referring more children from residential to foster care, report agencies

  1. inksmith March 8, 2023 at 5:26 pm #

    It’s not a very big sample though – 23 of around 300 IFAs, so less than 10%. There’s also no data on what kinds of agencies or where they are, so we have no idea if it’s a representative sample or not – which means the change could actually be going in a different direction, or be much smaller or much larger.
    I know people aren’t that interested in methodology, but your article makes this sound like it was a comprehensive review of the nation, and it’s not.

  2. Marie Tucker March 10, 2023 at 5:43 pm #

    Hello inksmith,
    With regards to the data, the research looked at referrals received and not children subsequently living with foster carers. The number, type and pattern of referrals sent in any particular region is not dependent on the number of IFAs those referrals are sent to. We estimate that the fostering agencies we interviewed provide care for approximately 50% of the children living with IFA carers and as such have a broad experience of the various systems and processes that different authorities have designed and implemented. Furthermore, we spent time sharing our findings with an even wider group of IFAs, and received confirmation that the issues identified were being widely experienced. We are confident that the patterns and trends shown in the report, along with the common concerns about placement and matching processes, accurately reflect the overall experiences of IFAs.

  3. AnnieMcLaw March 12, 2023 at 3:44 pm #

    Profiteering and leeching from our Local Authorities and being registered offshore meaning not even tax is ploughed back into our economy thus we the taxpayer are the ones who lose out. That’s not all, if you find yourself at the hands of social services PLO, you’ll be lucky to get legal assistance and if you do the quality is shockingly bad.

    The money could be used much more effectively surely. Even me, with little business knowledge, can see that. Where are the UK investors? Why are these services not run as not-for-profit? And why are they allowed to operate as private companies, with less scrutiny?

    The Josh McAllister report suggested not only a radical overhaul of children’s services but recommended £2 billion is needed. The proposal is a mere £200m. Which is not enough to change the substandard cycle in the system and implement early help more efficiently.

    Vulnerable children are being traded as commodities. It’s disgusting and the people profiteering ought to be ashamed!


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