‘Catastrophic’ loss of one in five supported accommodation beds projected, as regulation looms

The government must phase in its standards regime for currently unregulated care placements to avoid a “catastrophic” loss of provision, after a study found 20% of existing beds were set to close.

The Association of Directors of Children’s Services (ADCS) issued the warning after a report published last week found several providers of semi-independent placements for 16- and 17-year-old looked-after children and care leavers were planning to shut beds because of the introduction of regulation this year.

From 28 October 2023, councils will no longer be able to place 16- and 17-year-old looked-after children or care leavers in unregulated provision, with fully independent settings banned outright and providers of semi-independent services having to register these with Ofsted as “supported accommodation” to continue operating.

The introduction of regulation is the Department for Education’s (DfE) response to longstanding concerns about the safety and suitability of provision for young people in currently unregulated settings, including the placement of some in barges, caravans or even tents.

The regime being introduced is relatively light touch, with Ofsted regulating providers as a whole, no mandatory qualifications requirements for registered managers or staff and organisations expected to meet four standards. By contrast, children’s homes are regulated at an individual service level, their registered managers and staff must have, or be working towards, defined qualifications and they must meet nine standards.

One in five beds due to close

However, despite this, providers of semi-independent settings plan to register 81% of the beds they currently provide for 16- and 17-year-olds with Ofsted, found last week’s report, commissioned by the County Councils Network (CCN) and the London Innovation and Improvement Alliance (LIIA).

The finding was based on a survey of 65 providers, carried out by the consultancy Newton, which produced the report for LIIA and CCN.

Councils have made increasing use of semi-independent provision to accommodate children in care, with a 27% rise in its use in the year to March 2022, driven by the rising numbers of 16- and 17-year-olds in the system.

Despite this, the Newton report concluded that a 19% drop in provision would not result in a national shortage of such placements and those for 16- and 17-year-old care leavers.

However, it warned that there could be local shortages of beds and that more capacity would be needed if the growth in demand for semi-independent provision continued.

Mounting costs of semi-independent settings

Image: Supakrit

In 16 local authorities it analysed, Newton found that unaccompanied asylum-seeking children and care leavers accounted for 84% of the growth in semi-independent provision from 2019-22.

The report forecasted that demand pressures could add £386m to the annual costs of semi-independent provision for local authorities up to 2026-27, while inflation in provider fees could add a further £145m.

This would be in part mitigated by £41m a year from the DfE to implement the new standards regime plus a projected £122m in payments from the Home Office and the Department for Work and Pensions to fund accommodation costs for unaccompanied children and young adults, and for care leavers, respectively.

However, overall, it projected that council costs for semi-independent provision could rise from £1.22bn in 2022-23 to £1.589bn in 2026-27.

‘Catastrophic’ loss of capacity feared

In response to the report, the ADCS called on the government to phase in requirements on providers to meet the new standards to avoid the “catastrophic” loss of any capacity in the supported accommodation sector.

“No child should live in unsafe, unsuitable accommodation and we should be working collectively to maintain a sharp focus on improving standards for all children in care,” said the chair of the ADCS’s resources and strategy policy committee, Chris Munday.

“However, there is a very real risk that this will lead to providers terminating their services at a time when the system is already under extreme pressure as the number of children in our care increases year on year.”

CCN children’s services spokesperson Keith Glazier said the projected withdrawal of 20% of beds from the market “could result in more children being placed in areas far from where they have grown up”, adding: “We need an urgent solution to this issue, and we want to work with government and providers over the coming months to preserve as many beds as possible.”

He urged more government funding to accompany the introduction of the regulatory regime, saying: “Councils cannot afford this and, this will push many to breaking point at a time when other reforms to the children’s social care system are being introduced.”

Munday agreed, saying the introduction of the new regime required an increase in “wholly inadequate” levels of funding, adding: “We face an ever-shrinking number of private providers who can pick and choose which children to accept and at what cost despite local authorities being the sole purchaser.”

Regime will ‘shed light’ on quality of services

A spokesperson for the DfE said: “Our reforms to the use of supported accommodation are backed by £142m in funding over three years, including £17.2m to Ofsted and £123m in new burdens funding, to support local authorities to respond to these changes and offset the costs associated with the reforms.

“To further support the implementation of the new requirements, we have awarded the National Children’s Bureau a contract up to April 2024 to provide practical support, information, and good practice resources targeted directly at providers and local authority commissioners.”

In its response to the report, Ofsted defended the introduction of regulations of supported accommodation, to address children’s “unacceptably poor” experiences of provision to date.

“Our oversight of this sector is likely to shed light on the uncomfortable reality – that too many children are currently living without the right kind of everyday safeguards that they should expect from a system that is there to protect and care for them,” said a spokesperson.

“However, we are acutely aware of the challenges that commissioners are facing in finding places for children in care and care leavers to live. We also understand that regulation may lead, at least in the short-term, to further difficulties.”