Fixing the children’s social care market: Recommendations

There is a profound mismatch between the supply of care placements for children and demand for them. As a result, some children go without appropriate care, quality varies sharply by postcode and the system has become financially unsustainable.

With limited power to shape the market, councils must contend with some providers opening in unsuitable areas, delivering unlawful care that councils feel they have limited choice but to use, and setting excessive prices.

But local authorities could do more to close the gap, by:

• developing better forecasting capability
• investing in prevention
• providing foster carers with a more comprehensive support offer
• investing more in their own provision.

These actions require upfront (and, in most cases, ongoing) investment, which is incredibly difficult for councils to scrape together, given the deep cuts made to their funding since 2010.

The government’s children’s social care reforms, ²¹⁸ Department for Education, Keeping Children Safe, Helping Families Thrive, CP 1200, The Stationery Office, 2024, https://assets.publishing.service.gov.uk/media/67375fe5ed0fc07b53499a42/Keeping_Children_Safe_Helping_Families_Thrive_.pdf  announced at the end of 2024 and informed by recommendations from the CMA and the Independent Review of Children’s Social Care, ²¹⁹ Competition and Markets Authority, Children’s Social Care Market Study: Final report, GOV.UK, 2022, https://assets.publishing.service.gov.uk/media/6228726cd3bf7f158c844f65/Final_report.pdf; MacAlister J, The Independent Review of Children’s Social Care: Final report, GOV.UK, 2022, https://webarchive.nationalarchives.gov.uk/ukgwa/20230308122535mp_/https://Childrenssocialcare.independent-review.uk/wp-content/uploads/2022/05/The-i…  set out a clear and ambitious vision for reform, backed by relatively generous funding. ²²⁰ Davies N and Haile D, Public Services Performance Tracker 2025, ‘Cross-service analysis’, Institute for Government, 2025, www.instituteforgovernment.org.uk/sites/default/files/2025-11/performance-tracker-2025-cross-service-analysis_0.pdf  Its emphasis on early intervention is particularly welcome.

However, the proposals stop short of taking an integrated approach to delivering children’s social care, with input from other local public services such as health and justice. But that is precisely what is required to support children at the sharpest end of the broken care market, who often have multiple and overlapping needs. The government must also address system-wide barriers – including gaps in key data and a lack of workforce capacity – that risk undermining the delivery of its vision.

In this final section we set out the implications of our findings and 10 recommendations for the government as it delivers children’s social care reform.

Shaping the demand for care placements

Limited capacity, data and political will leaves local authorities unable to forecast demand

Forecasts of local demand are absolutely vital because demand is unevenly distributed across England – and these gaps are widening. In 2010, the local authority with the highest rate of children in care (Manchester, at 149 children per 10,000) had 127 more children in care per 10,000 than the area with the lowest (Wokingham, at 22 per 10,000).^{*, 223} Department for Education, ‘Children looked after in England including adoptions’, GOV.UK, 26 November 2025, retrieved 23 January 2026, https://explore-education-statistics.service.gov.uk/find-statistics/children-looked-after-in-england-including-adoptions/2025  By 2025, the gap had grown to 157. ²²⁴ Department for Education, ‘Children looked after in England including adoptions’, GOV.UK, 26 November 2025, retrieved 23 January 2026, https://explore-education-statistics.service.gov.uk/find-statistics/children-looked-after-in-england-including-adoptions/2025  Nearly 2% of children, or nearly 200 in 10,000, are in care in Blackpool (184) and Stoke-on-Trent (170), two of the most deprived areas in England. Children in these areas are six times more likely to be in care than those in the much less deprived London borough of Richmond, for example.

_{*    These figures represent the rate of children from, for example, Manchester who are in care; it does not necessarily reflect the location of their care placement.}

Beyond differences in the rates of children in care, there are also striking differences in the needs of these children across England. For example, 51% of children in the care of Kensington and Chelsea in 2025 were over the age of 16, compared to just 16% of those in the care of Shropshire and Stoke-on-Trent. ²³⁹ Department for Education, ‘Children looked after in England including adoptions’, GOV.UK, 26 November 2025, retrieved 23 January 2026, https://explore-education-statistics.service.gov.uk/find-statistics/children-looked-after-in-england-including-adoptions/2025  This has a material effect on the type of provision required, from foster carers willing to care for older children to supported accommodation that allows greater independence.

While this variation heightens the need for local forecasting, cuts to local government spending power since the 2010s, paired with rising demand, have left many councils little bandwidth for forward planning. ²⁴⁰ Hoddinott S, Davies N and Kim D, A Preventative Approach to Public Services, Institute for Government, 2024, retrieved 13 April 2026, www.instituteforgovernment.org.uk/publication/preventative-approach-public-services; Ofsted, ‘How local authorities plan for sufficiency of accommodation that meets the needs of children in care and care leavers’, GOV.UK, 18 November 2022, retrieved 18 March 2026, www.gov.uk/government/publications/how-local-authorities-plan-for-sufficiency-children-in-care-and-care-leavers/how-local-authorities-plan-for-suffic…  Those cuts necessitated a drastic slimming down of the local government workforce, which fell by 27% between December 2010 and December 2025. ²⁴¹ Office for National Statistics, ‘Public sector employment: June 2025 edition’, 16 September 2025, retrieved 13 April 2026, www.ons.gov.uk/employmentandlabourmarket/peopleinwork/publicsectorpersonnel/datasets/publicsectoremploymentreferencetable  Given the need to protect spending on statutory responsibilities such as the provision of adult and children’s social care, staff cuts likely fell disproportionately on back-office staff, contributing to weaknesses in analytical capacity. ²⁴² Davies N and Haile D, Public Services Performance Tracker 2025, ‘Cross-service analysis’, Institute for Government, 2025, www.instituteforgovernment.org.uk/sites/default/files/2025-11/performance-tracker-2025-cross-service-analysis_0.pdf  This has been exacerbated by ministers repeatedly characterising the use of such staff as wasteful. ²⁴³ Davies N and Haile D, Public Services Performance Tracker 2025, ‘Cross-service analysis’, Institute for Government, 2025, www.instituteforgovernment.org.uk/sites/default/files/2025-11/performance-tracker-2025-cross-service-analysis_0.pdf

As a result, many local authorities appear to lack the data skills needed for effective planning. What Works for Children’s Social Care found in 2022 that “most employed a very basic analysis of less than five data points” and could not “reliably assess the statistical features of the forecasting estimates”. ²⁴⁴ Bach-Mortensen AM, Murray H, Goodair B, Carter E, Briggs E and O’Higgins A, Are Local Authorities Achieving Effective Market Stewardship for Children’s Social Care Services?, What Works for Children’s Social Care, 2022, p. 23, https://webarchive.nationalarchives.gov.uk/ukgwa/20230308122151mp_/https://whatworks-csc.org.uk/wp-content/uploads/WWCSC_sufficiency_report_Final_Mar…  Strong local authority leadership is often key in ensuring that councils embrace data-driven decision making, because otherwise there would be little to no drive to make the necessary investments. ²⁴⁵ Institute for Government interviews; Hurst G, Teixeira L and Davies N, A Smarter Approach to Homelessness, Institute for Government, 2025, www.instituteforgovernment.org.uk/sites/default/files/2025-05/A-smarter-approach-to-homelessness.pdf; Bach-Mortensen AM, Murray H, Goodair B, Carter E, Briggs E and O’Higgins A, Are Local Authorities Achieving Effective Market Stewardship for Children’s Social Care Services?, What Works for Children’s Social Care, 2022, https://webarchive.nationalarchives.gov.uk/ukgwa/20230308122151mp_/ https://whatworks-csc.org.uk/wp-content/uploads/WWCSC_sufficiency_report_Final_March22.pdf  In other words, where pockets of good practice exist, it is normally despite the system rather than because of it.

In addition to this lack of capacity, some aspects of demand are just particularly tricky to forecast. Few children require certain kinds of specialist care at a local authority level, making projections highly volatile. Local authorities also report particular difficulty planning for UASC, where arrivals are often unpredictable. ²⁴⁶ Institute for Government interviews; Ofsted, ‘How local authorities plan for sufficiency of accommodation that meets the needs of children in care and care leavers’, GOV.UK, 18 November 2022, retrieved 18 March 2026, www.gov.uk/government/publications/how-local-authorities-plan-for-sufficiency-children-in-care-and-care-leavers/how-local-authorities-plan-for-suffic…

Research from Ofsted in 2022 found that only a few local authorities predicted future activity using data on children at the edge of care. ²⁴⁷ Ofsted, ‘How local authorities plan for sufficiency of accommodation that meets the needs of children in care and care leavers’, GOV.UK, 18 November 2022, retrieved 18 March 2026, www.gov.uk/government/publications/how-local-authorities-plan-for-sufficiency-children-in-care-and-care-leavers/how-local-authorities-plan-for-suffic…  Other authorities use data on previous and current needs, and some just look at general population projections. ²⁴⁸ Bach-Mortensen AM, Murray H, Goodair B, Carter E, Briggs E and O’Higgins A, Are Local Authorities Achieving Effective Market Stewardship for Children’s Social Care Services?, What Works for Children’s Social Care, 2022, https://webarchive.nationalarchives.gov.uk/ukgwa/20230308122151mp_/https://whatworks-csc.org.uk/wp-content/uploads/WWCSC_sufficiency_report_Final_Mar…  This failure to plan ahead can force local authorities to resort to more expensive spot-purchasing, and can leave children without the care they need. Moreover, reports commissioned by the Independent Children’s Home Association warn that, without improvement in local authority forecasting, providers will continue investing based on their own market assessments. ²⁴⁹ Ibid.; Revolution Consulting, ICHA “State of the Market” survey 6 January 2020, 2020, www.revolution-consulting.org/wp-content/uploads/2020/02/ICHA-Jan-2020-survey-final-12-Feb-2020.pdf  This could perpetuate shortages of local placements as providers continue to meet national rather than local demand.

In response to these challenges, the government has announced plans to set up regional care co-operatives (RCCs), which will plan and commission children’s social care at a regional level. RCCs are intended to take on many forecasting responsibilities ²⁵⁰ Department for Education, Keeping Children Safe, Helping Families Thrive, CP 1200, The Stationery Office, 2024, https://assets.publishing.service.gov.uk/media/67375fe5ed0fc07b53499a42/Keeping_Children_Safe_Helping_Families_Thrive_.pdf  through a dedicated forecasting function. This could build expertise in data analysis, while a regional approach may help smooth some volatility in projections. Two pilots – in Greater Manchester and the South East – were launched in April and June 2025 to test the model and build the evidence base. ²⁵¹ Department for Education, ‘Regional care cooperatives pathfinder regions’, GOV.UK, 4 February 2026, retrieved 11 February 2026, www.gov.uk/government/publications/regional-care-co-operatives-pathfinder-areas/regional-care-cooperatives-rccs-pathfinder-regions  And in March of this year, the DfE invited applications for up to six more RCCs, aiming for them to become fully operational by March 2028. ²⁵² Department for Education, Apply to set up a Regional Care Cooperative (RCC), GOV.UK, March 2026, retrieved 20 April 2026, https://assets.publishing.service.gov.uk/media/69c3fe0bcdfd19de13d0f60e/Apply_to_set_up_a_regional_care_cooperative_-_guidance.pdf

For RCCs to succeed in building robust forecasting capabilities, we recommend various government actions.

Without sufficient funding and analytical capacity, RCCs risk replicating local authorities’ reactive approach, where immediate pressures – such as spot-purchasing placements for children who urgently need a home – crowd out forecasting. Senior political leaders in constituent local authorities should ensure that there is sufficient analytical capacity in RCCs. This is particularly important given that the government’s six new RCCs are expected to become “financially self-sufficient” by March 2028, presumably meaning they will have to rely on contributions from member local authorities rather than on dedicated central government funding. ²⁶³ Department for Education, Apply to set up a Regional Care Cooperative (RCC), GOV.UK, March 2026, retrieved 20 April 2026, p.20, https://assets.publishing.service.gov.uk/media/69c3fe0bcdfd19de13d0f60e/Apply_to_set_up_a_regional_care_cooperative_-_guidance.pdf  In this context, there is a clear risk that analytical functions are again deprioritised, especially where individual councils are able to free ride on the contributions of others.

It is unclear whether the government’s reforms will tackle data issues that currently hold back local authority forecasting. For example, the latest available data on siblings in care is from 2016. ²⁶⁴ Children’s Commissioner, ‘Siblings in care’, 26 January 2023, retrieved 13 April 2026, www.childrenscommissioner.gov.uk/resource/siblings-in-care  As the children’s commissioner wrote in 2023:

“At the most basic level… nobody knows how many siblings there are in care, let alone whether they are living together or not. While local areas may collect this information themselves, it is not done so in a systematic way. This means that understanding the demand for the number or type of sibling placements needed is very challenging.” ²⁶⁵ Children’s Commissioner, ‘Siblings in care’, 26 January 2023, retrieved 13 April 2026, p.26, www.childrenscommissioner.gov.uk/resource/siblings-in-care

Beyond these specific gaps, there are more fundamental problems with how demand itself is measured. Research commissioned by the DfE in 2024 found that much of the data used for demand forecasting does not capture underlying demand or placement suitability – it just records the placements that happen to be made. ²⁶⁶ Mutual Ventures, Forecasting, Commissioning and Market Shaping, Department for Education, 2024, https://dd1cc44c-4889-4662-b8d7-7b18bc37a2da.filesusr.com/ugd/f0c288_e542122a234e42afb93cdc9aaf7583c9.pdf

Compounding this issue, the CMA identified in 2022 “a lack of consistency in how local authorities record children’s needs”. ²⁶⁷ Competition and Markets Authority, Children’s Social Care Market Study: Final report, GOV.UK, 2022, p. 75, https://assets.publishing.service.gov.uk/media/6228726cd3bf7f158c844f65/Final_report.pdf  While setting up RCCs, alongside the development of a national framework for children’s social care, is likely to encourage the standardisation of this data, these inconsistencies will present challenges for demand projections that draw on historical trends.

Perhaps the most fundamental data challenge, however, is the need for information from other government agencies. As this report and previous Institute for Government research ²⁶⁸ Dellar A, Performance Tracker 2025, ‘Children’s social care’, Institute for Government, 15 October 2025, retrieved 18 March 2026, www.instituteforgovernment.org.uk/publication/performance-tracker-2025/local-services/children-social-care  have shown, some of the most acute demand for care placements arises when children ‘fall through the gaps’ in other public services. This includes children who have no recourse to public funds for a long time because of immigration backlogs, children facing exceptionally long waits for mental health support and children unable to access special educational needs support whose needs then escalate. ²⁶⁹ Dellar A, Performance Tracker 2025, ‘Children’s social care’, Institute for Government, 15 October 2025, retrieved 18 March 2026, www.instituteforgovernment.org.uk/publication/performance-tracker-2025/local-services/children-social-care  Because their primary needs often fall outside of the remit of children’s social care, local authorities often struggle to anticipate their demand, leading to expensive emergency placements when these children present at crisis point. ²⁷⁰ Association of Directors of Children’s Services, ADCS Safeguarding Pressures Research – Phase 9, 2025, www.adcs.org.uk/wp-content/uploads/2025/01/ADCS_Safeguarding_Pressures_Phase9_FINALv1.pdf

Data on UASC is also key, especially because they have made up much of the recent increase in the care population. It makes most sense for central government to provide this data, as it holds the relevant policy levers and technical expertise.

It is absolutely vital, therefore, that whichever body is responsible for forecasting demand for children’s social care, it has access to relevant data from across government. The planned introduction of a single unique identifier for children – intended to make it easier for the multitude of services interacting with children to share information – is a promising development in this space. ²⁷¹ Department for Education and Ministry of Housing, Communities and Local Government, ‘Government speeds up reforms to protect children from harm’, press release, 8 August 2025, retrieved 13 April 2026, www.gov.uk/government/news/government-speeds-up-reforms-to-protect-children-from-harm

But forthcoming Institute for Government research highlights many additional barriers to place-based data sharing that will need to be addressed if this policy is to succeed. ²⁷² Hoddinott S, Barriers to Place-based Working, Institute for Government (forthcoming).

The government should ensure that regional analysis of demand does not come at the expense of granular insights, particularly in areas with diverse needs. For example, Manchester, one of the most deprived local authority areas in England, borders Trafford, which sits in the bottom fifth of deprivation. ²⁷⁸ Ministry of Housing, Communities and Local Government, ‘English indices of deprivation 2025: statistical release’, GOV.UK, 17 November 2025, retrieved 23 January 2026, www.gov.uk/government/statistics/english-indices-of-deprivation-2025/english-indices-of-deprivation-2025-statistical-release  These neighbouring areas are likely to face different pressures on their children’s social care services, and those differences must not be overlooked.

It is also important that any nuanced, place-based understanding of need that individual councils currently hold – including knowledge of specific individuals, families and patterns of demand – is not diluted or lost as responsibilities transition to RCCs. This challenge is also likely to persist past the transition, as much of councils’ knowledge is developed through close contact with families.

The government must create the conditions to turn prevention from theory into practice

To be able to shape demand, local authorities need to be able to take action on the demand that they have projected. This may come in the form of targeted interventions – for example, providing wraparound family support for families with children on the edge of care – or more universal, upstream interventions, such as running children’s centres that provide services for play, learning and childcare. But the same financial pressures that have crowded out spending on analytical capacity have also led to local authorities cutting these preventative services, where spending is more discretionary. ²⁷⁹ Hoddinott S, Rowland C, Davies N, Kim D and Nye P, Fixing Public Services, Institute for Government, 2023, www.instituteforgovernment.org.uk/sites/default/files/2024-07/Fixing-public-services.pdf

It is notoriously difficult to define prevention. ²⁸⁰ Hoddinott S, Davies N and Kim D, A Preventative Approach to Public Services, Institute for Government, 2024, retrieved 13 April 2026, www.instituteforgovernment.org.uk/publication/preventative-approach-public-services  In children’s services we classify spending on children’s centres, children under the age of five and services for young people as preventative as these services reduce the likelihood or severity of acute demand. In 2009/10, this preventative spending constituted 32% of local authority spending on children’s services.^{*, 281} Department for Education, ‘LA and school expenditure’, GOV.UK, 11 December 2025, retrieved 23 January 2026, https://explore-education-statistics.service.gov.uk/find-statistics/la-and-school-expenditure/2024-25  By 2024/25, it had dropped to 6%. ²⁸² Department for Education, ‘LA and school expenditure’, GOV.UK, 11 December 2025, retrieved 23 January 2026, https://explore-education-statistics.service.gov.uk/find-statistics/la-and-school-expenditure/2024-25

_{*    Children’s social care is a subset of the wider children’s services category, which also includes services such as children’s centres and youth justice.}

In 2024/25, the London boroughs of Islington and Camden allocated a respective 21% and 20% of their children’s services’ spending to prevention – 3–4ppts more than any other local authority and 14–15ppts more than the national level. ²⁹⁹ Department for Education, ‘LA and school expenditure’, GOV.UK, 11 December 2025, retrieved 23 January 2026, https://explore-education-statistics.service.gov.uk/find-statistics/la-and-school-expenditure/2024-25  These councils have also consistently spent the most money per child on preventative children’s services over the past decade – £510 and £540 respectively in 2024/25 (2026/27 prices). This is significantly higher than in most other local authorities – Hackney was the only other council to spend more than £300 per child in 2024/25, while the national figure was £75. ³⁰⁰ Department for Education, ‘LA and school expenditure’, GOV.UK, 11 December 2025, retrieved 23 January 2026, https://explore-education-statistics.service.gov.uk/find-statistics/la-and-school-expenditure/2024-25

Both Islington and Camden have prioritised prevention but also have among the highest per-capita spending powers, giving them the financial and political room to do so. ³⁰¹ Hoddinott S, Davies N and Kim D, A Preventative Approach to Public Services, Institute for Government, 2024, retrieved 13 April 2026, www.instituteforgovernment.org.uk/publication/preventative-approach-public-services  As with analytical capacity, this pocket of good practice exists despite the system rather than because of it. Most councils have much less, if any, headroom after meeting their statutory duties, and many have not taken the political decision to protect preventative services. ³⁰² Hoddinott S, Davies N and Kim D, A Preventative Approach to Public Services, Institute for Government, 2024, retrieved 13 April 2026, www.instituteforgovernment.org.uk/publication/preventative-approach-public-services

Yet greater investment in prevention would likely ease long-term pressures on local authorities, while improving outcomes for children. Research from Sheffield University suggests that investing in preventative children’s services may^* reduce rates of children in care. ³⁰³ Webb C, Investing in Prevention and Support: Spending on family support, children’s centres, young peoples’ services, and other forms of help and child welfare interventions in England, 2009-10 to 2021-22, University of Sheffield, 2025, retrieved 13 April 2026, https://orda.shef.ac.uk/articles/report/Investing_in_Prevention_and_Support_Spending_on_family_support_children_s_centres_young_peoples_services_and_…  And the fiscal case for the Supporting Families programme^** estimates that the government spent eight times as much delivering reactive services to vulnerable families than it did on targeted, early interventions in the early 2010s. ³⁰⁴ Department for Communities and Local Government, The Fiscal Case for Working with Troubled Families, GOV. UK, 2013, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/79377/20130208_The_Fiscal_Case_for_Working_with_Troub…  Since launching in 2011, this programme, which provides targeted and holistic support to vulnerable families, has delivered measurable returns. An evaluation of its second phase found that every £1 the government invested generated £1.51 of savings. ³⁰⁵ Ministry of Housing, Communities and Local Government, National Evaluation of the Troubled Families Programme 2015-2020: Findings, GOV.UK, 2019, p. 5, https://assets.publishing.service.gov.uk/media/5c90ab20e5274a47046f7b55/National_evaluation_of_the_Troubled_Families_Programme_2015_to_2020_evaluatio…

There is also evidence of enduring positive outcomes from the Supporting Families programme: children who took part in it were 38% less likely to have received custodial sentences within the first year of joining, and a third less likely to be in care two years after joining. ³⁰⁶ Ministry of Housing, Communities and Local Government, National Evaluation of the Troubled Families Programme 2015-2020: Findings, GOV.UK, 2019, p. 16, https://assets.publishing.service.gov.uk/media/5c90ab20e5274a47046f7b55/National_evaluation_of_the_Troubled_Families_Programme_2015_to_2020_evaluatio…  Sure Start centres – launched in 1999 to provide a range of services to children under the age of five – have also been linked to positive outcomes, such as improved parenting ³⁰⁷ National Evaluation of Sure Start, The Impact of Sure Start Local Programmes on Three Year Olds and Their Families, DfES Publications, 2008, p. v, https://dera.ioe.ac.uk/id/eprint/8016/7/NESS2008FR027_Redacted.pdf  and fewer hospitalisations after the age of five. ³⁰⁸ Cattan S, Conti G, Farquharson C, Ginja R and Pecher M, The Health Impacts of Sure Start, Institute for Fiscal Studies, 2021, https://ifs.org.uk/sites/default/files/output_url_files/BN332-The-health-impacts-of-sure-start-1.pdf

Indeed, Islington and Camden stand somewhat apart from the national trend in demand for care. While the number of children in care across England has increased by 10 children per 10,000 since 2010, in these two London boroughs the level of children in care declined by 15 and 10 per 10,000 respectively – larger decreases than in 80% of councils. ³⁰⁹ Department for Education, ‘Children looked after in England including adoptions’, GOV.UK, 26 November 2025, retrieved 23 January 2026, https://explore-education-statistics.service.gov.uk/find-statistics/children-looked-after-in-england-including-adoptions/2025

In recognition of this, the government’s children’s social care reform agenda places prevention front and centre, with a vision that “wherever possible, children should remain with their families and be safely prevented from entering the care system”. ³¹⁰ Department for Education, Keeping Children Safe, Helping Families Thrive, CP 1200, The Stationery Office, 2024, p. 5, https://assets.publishing.service.gov.uk/media/67375fe5ed0fc07b53499a42/Keeping_Children_Safe_Helping_Families_Thrive_.pdf  Many of these reforms are being delivered through the Families First Partnership programme, including changes to early help informed by the Supporting Families programme, the creation of new multi-agency child protection teams and earlier involvement of the wider family in decision making. ³¹¹ Department for Education, The Families First Partnership (FFP) Programme Guide, GOV.UK, 2025, https://assets.publishing.service.gov.uk/media/6825b992a60aeba5ab34e006/The_families_first_partnership_programme_guide.pdf

The programme is backed by £2.4bn (in cash terms) up to 2028/29, ³¹² Ministry of Housing, Communities and Local Government, ‘Local government finance policy statement 2026-27 to 2028-29’, GOV.UK, 20 November 2025, retrieved 11 February 2026, www.gov.uk/government/publications/local-government-finance-policy-statement-2026-27-to-2028-29/local-government-finance-policy-statement-2026-27-to-…  which includes a new ring-fenced grant for prevention in children’s services of £270million a year. ³¹³ HM Treasury, Spending Review 2025, CP 1336, The Stationery Office, 2025, https://assets.publishing.service.gov.uk/media/686270a608bf2f53761219fc/E03349913_HMT_Spending_Review_June_2025_TEXT_PRINT_CS.pdf  For comparison, local authorities spent roughly £884m on preventative children’s services in 2024/25 (in 2026/27 prices). ³¹⁴ Department for Education, ‘LA and school expenditure’, GOV.UK, 11 December 2025, retrieved 23 January 2026, https://explore-education-statistics.service.gov.uk/find-statistics/la-and-school-expenditure/2024-25

It is welcome that the government is seeking to prioritise prevention, but for its efforts to succeed we recommend that:

_{*    It is difficult to separate the effects of preventative spending on acute demand from the effects of acute demand on preventative spending – it is, by nature, a vicious cycle.
**    The Supporting Families programme was known as the Troubled Families programme until 2021.}

The government’s current ring-fenced grant for prevention is set out in vague terms, with the grant earmarked for spending on “early help, Family Help, Family Networks and child protection”. ³¹⁹ Ministry of Housing, Communities and Local Government, ‘Children’s Social Care Prevention Grant Determination 2025-26: 31/7833’, GOV.UK, 4 May 2025, retrieved 15 September 2025, www.gov.uk/government/publications/childrens-social-care-prevention-grant-determination-2025-to-2026/childrens-social-care-prevention-grant-determina…  While it is important to ensure that local authorities have enough discretion in allocating the grant, there is also a risk that it will be eaten up by acute demand if not properly specified. ³²⁰ Hoddinott S, Davies N and Kim D, A Preventative Approach to Public Services, Institute for Government, 2024, retrieved 13 April 2026, www.instituteforgovernment.org.uk/publication/preventative-approach-public-services  The inclusion of ‘child protection’ – an acute and demand-led service – in the definition of preventative spending heightens this risk.

Strong and sustained prioritisation was critical to the success of the Supporting Families and Sure Start programmes, as well as local initiatives in Camden and Islington. While central government has made important progress in signalling its commitment to prevention, it must also ensure that local leaders do the same, so that prevention is prioritised at all levels of government.

The severe financial pressures that local governments face make the active protection of preventative services all the more necessary.

A prevention grant for children’s services alone cannot tackle the cross-service ‘spillovers’ contributing to rising complexity among the care population. A more effective approach, as set out in recent Institute for Government research, ³²¹ Davies N and Haile D, Public Services Performance Tracker 2025, ‘Cross-service analysis’, Institute for Government, 2025, www.instituteforgovernment.org.uk/sites/default/files/2025-11/performance-tracker-2025-cross-service-analysis_0.pdf  would be to provide local authorities with a single prevention grant for all local services, protected by a clearly defined ring-fence, so that preventative spending is not siloed. This would enable councils to focus on the causes of family breakdown, many of which lie outside of children’s services.

Previous Institute for Government research found that poor-quality data hinders both local and central government’s ability to intervene in an evidence-based way. ³²² Freeguard G and Britchfield C, Missing Numbers in Children’s Services: How better data could improve outcomes for children and young people, Institute for Government, 2020, retrieved 13 April 2026, www.instituteforgovernment.org.uk/publication/missing-numbers-childrens-services  One concrete example is data on the workforce delivering preventative children’s services. The new focus on prevention will place greater demands on this group of staff, but little is known about their capacity, with no routinely published data on early help and family support staff. It is therefore unclear whether that part of the system needs support to deliver the government’s reforms, and if so, what that support should entail.

The government should conduct an audit into missing, incomplete or redundant data, in light of the needs of a diverse set of stakeholders. This would allow it to use data more effectively in its reform of the children’s social care system.

Shaping the supply of care placements

The government must ensure its fostering reforms are resourced, transparent and targeted

As this report has shown, a shortage of foster carers – both in number and in particular skillsets – is forcing children into unsuitable residential placements. In many cases, foster care would better meet their needs, keep them closer to home and reduce the use of unregistered placements, all while costing local authorities less. The Fostering Network estimated in 2025 that an additional 5,000 foster families were needed in England to meet demand. ³²⁵ The Fostering Network, ‘Recruitment targets’, (no date), retrieved 15 September 2025, www.thefosteringnetwork.org.uk/about-fostering/for-fostering-services/recruitment-and-retention/fostering-recruitment-targets

Fostering services nationwide are facing some common pressures in recruiting and retaining foster carers. These include fostering becoming harder to afford, and adult children increasingly living with their parents, filling spare rooms. ³²⁶ Association of Directors of Children’s Services, ADCS Safeguarding Pressures Research – Phase 9, 2025, www.adcs.org.uk/wp-content/uploads/2025/01/ADCS_Safeguarding_Pressures_Phase9_FINALv1.pdf  But local authorities are struggling more than IFAs. As the below figure shows, they lag behind in both recruitment and retention, fuelling the market’s increasing reliance on independent agencies.

One key reason for this, as identified by the DfE, is likely that IFAs tend to offer more generous and uniform support – both financial and otherwise – to foster carers than local authorities do. ³³⁴ Institute for Government interview; Comptroller and Auditor General, Managing Children’s Residential Care, Session 2024–26, HC 1290, National Audit Office, 2025, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf  There is a limited understanding of why foster carers are leaving the system because Ofsted does not publish data on the reasons for deregistration. But research from the University of York highlights the importance of regular contact with social workers, training and adequate remuneration in retaining foster carers. ³³⁵ Sinclair I, Gibbs I and Wilson K, Foster Carers: Why they stay and why they leave, Jessica Kingsley Publications, 2004, retrieved 13 April 2026, https://pure.york.ac.uk/portal/en/publications/foster-carers-why-they-stay-and-why-they-leave  On the recruitment side, poor co-ordination between local authorities can confuse potential foster carers and create competition between councils. ³³⁶ Ofsted, ‘How local authorities plan for sufficiency of accommodation that meets the needs of children in care and care leavers’, GOV.UK, 18 November 2022, retrieved 26 September 2025, www.gov.uk/government/publications/how-local-authorities-plan-for-sufficiency-children-in-care-and-care-leavers/how-local-authorities-plan-for-suffic…; Oakley M, Fostering the Future: Recruiting and retaining more foster carers, Social Market Foundation, 2021, www.smf.co.uk/wp-content/uploads/2021/08/Fostering-the-future-Paper-2.pdf

In February of this year, the government released a fostering action plan aiming to tackle the shortage. ³³⁷ Department for Education, Renewing Fostering: Homes for 10,000 more children, CP 1503, The Stationery Office, 2026, https://assets.publishing.service.gov.uk/media/69826905015e2ba11991bbef/Renewing_Fostering_-_homes_for_10_000_more_children_-_February_2026_accessibl…  This includes a target to grow the number of local authority and voluntary sector foster places by 10,000 by 2029 – an increase^* on the 400 new fostering households pledged in the 2025 spring statement, which we noted in 2025 was far from enough to address the gap. ³³⁸ Dellar A, Performance Tracker 2025, ‘Children’s social care’, Institute for Government, 15 October 2025, retrieved 18 March 2026, www.instituteforgovernment.org.uk/publication/performance-tracker-2025/local-services/children-social-care  This policy statement sets out the government’s plans to, among other things:

• launch a national communications campaign to attract potential foster carers and provide clear guidance on the system and applications process
• speed up the foster carer recruitment process and work with local areas to improve monitoring of that process
• pilot an enhanced training and support offer for foster carers, from 2027/28
• provide up to £25m (in cash terms) in capital funding over two years to help local authority foster carers create additional space in their homes.

Many of these are positive – and much-needed – developments that address key issues facing the fostering system. For example, the national communications campaign should reduce competition among councils and confusion among potential foster carers, the enhanced training and support offer may help boost retention and the capital funding plans will start to tackle underlying barriers around space in people’s homes.

_{*    This new target will almost certainly represent an increase on the earlier pledge. But as outlined below, the government has yet to explain exactly what baseline it will use to measure progress towards the new 10,000 target, meaning we cannot be sure about the scale of the increase.}

The government opened a consultation ³³⁹ Department for Education, ‘Fostering reform: proposed changes to assessment and handling allegations of abuse’, GOV.UK, 4 February 2026, retrieved 18 March 2026, www.gov.uk/government/consultations/fostering-reform-proposed-changes-to-assessment-and-handling-allegations-of-abuse  and a call for evidence ³⁴⁰ Department for Education, ‘Fostering for the future: improving the foster care system’, GOV.UK, 4 February 2026, retrieved 18 March 2026, www.gov.uk/government/calls-for-evidence/fostering-for-the-future-improving-the-foster-care-system  to further shape the detail of the reforms. As its plans develop, it should consider:

As discussed above, there are gaps in foster provision for particular groups of children, as well as an overall shortage of foster carers. Although the government is planning measures such as capital grant funding, which it hopes will increase placements with room to accommodate siblings, a clearer, more systematic understanding of these specific shortages will be needed to align supply with demand.

In 2025, the House of Commons Public Accounts Committee warned that the DfE had not set out how it would address the financial barriers to becoming a foster carer. ³⁴² House of Commons Committee of Public Accounts, Financial Sustainability of Children’s Care Homes: Sixty-first report of session 2024–26, HC 1233, The Stationery Office, 2025, retrieved 13 April 2026, https://committees.parliament.uk/publications/51065/documents/283185/default  The fostering action plan, published since then, does not shed much light on the issue. It encourages local authorities to strengthen the financial incentives they have developed locally, such as council tax discounts and free parking permits, without setting any national direction or providing any additional funding to support this. With councils under severe financial pressure and prioritising acute services, the government will need to do more if it wishes to address these barriers to foster care recruitment and retention.

The action plan states that progress will be measured against the government’s forecast of the extent to which fostering capacity would decline by 2029 without intervention. But it has not made this forecast publicly available, leaving it unclear what the government’s ambitions are and their likely impact on the shortage of foster carers.

The government must articulate a clearer, more ambitious vision for the commissioning of children’s care, with stronger accountability for delivery 

Local authorities are subject to a sufficiency duty, which requires them to ensure, so far as is reasonably practicable, that they can provide accommodation within their areas that meets children’s needs. ³⁵⁹ Legislation.gov.uk, Children Act 1989, c. 41, p. 3, s. 22g, retrieved 13 April 2026, www.legislation.gov.uk/ukpga/1989/41/section/22G  But as this report has shown, local authorities struggle to shape their local supply of placements, with children’s homes often not located where there is demand, and providers able to set their own prices. This lack of leverage over the market stems from:

• Limited data on the market. Local authorities often lack sufficient, up-to-date detail on providers’ eligibility criteria, placement availability and the type of care offered.^{*, 360} Mutual Ventures, Forecasting, Commissioning and Market Shaping, Department for Education, 2024, https://dd1cc44c-4889-4662-b8d7-7b18bc37a2da.filesusr.com/ugd/f0c288_e542122a234e42afb93cdc9aaf7583c9.pdf; Comptroller and Auditor General, Managing Children’s Residential Care, Session 2024–26, HC 1290, National Audit Office, 2025, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf  As research commissioned by the DfE in 2024 found:

_{*    Although providers share some information about the type of care they offer when registering with Ofsted, this data is not required to be kept up to date, reducing its usefulness for effective planning.}

“Knowing which placement might be suitable for a given child is difficult. Finding out which among those might have a placement available can be extremely time-consuming. Many [local authorities] mention sometimes sending out mass emails because they are desperate to find a placement for a child and lack an effective way to make targeted outreach.” ³⁶¹ Mutual Ventures, Forecasting, Commissioning and Market Shaping, Department for Education, 2024, p. 42, https://dd1cc44c-4889-4662-b8d7-7b18bc37a2da.filesusr.com/ugd/f0c288_e542122a234e42afb93cdc9aaf7583c9.pdf

Local authorities also often do not understand neighbouring areas’ demands on shared suppliers, which they need to do to accurately identify gaps in supply, and many also have a limited understanding of how much placements should cost. ³⁶² Mutual Ventures, Forecasting, Commissioning and Market Shaping, Department for Education, 2024, p. 42, https://dd1cc44c-4889-4662-b8d7-7b18bc37a2da.filesusr.com/ugd/f0c288_e542122a234e42afb93cdc9aaf7583c9.pdf  Without this data, local authorities struggle to communicate these gaps to the market, or even to decision makers within their own local authority, such as finance directors and elected members.

• Limited ability to analyse data on the market. Where this data on the market does exist, it is often not easily connected to data relating to children in care, meaning it is not easy to see where demand does not match with supply. ³⁶³ Mutual Ventures, Forecasting, Commissioning and Market Shaping, Department for Education, 2024, p. 42, https://dd1cc44c-4889-4662-b8d7-7b18bc37a2da.filesusr.com/ugd/f0c288_e542122a234e42afb93cdc9aaf7583c9.pdf  And the cuts to back-office functions that have affected demand forecasting have also affected activity across commissioning and market shaping. ³⁶⁴ Mutual Ventures, Forecasting, Commissioning and Market Shaping, Department for Education, 2024, p. 42, https://dd1cc44c-4889-4662-b8d7-7b18bc37a2da.filesusr.com/ugd/f0c288_e542122a234e42afb93cdc9aaf7583c9.pdf
• Lack of incentives for private providers to meet local demand. As the PAC reported earlier this year: “There are no incentives to help prioritise homes where they are most needed.” ³⁶⁵ House of Commons Committee of Public Accounts, Financial Sustainability of Children’s Care Homes: Sixty-first report of session 2024–26, HC 1233, The Stationery Office, 2025, p. 4, retrieved 13 April 2026, https://committees.parliament.uk/publications/51065/documents/283185/default  Some private providers instead respond to national demand and invest in new capacity where it is most commercially viable.
• Barriers to market entry. The upfront capital costs of acquiring and developing properties for new residential care can be prohibitive for local authorities, which may struggle to get enough capital funding. ³⁶⁶ House of Commons Committee of Public Accounts, Financial Sustainability of Children’s Care Homes: Sixty-first report of session 2024–26, HC 1233, The Stationery Office, 2025, retrieved 13 April 2026, https://committees.parliament.uk/publications/51065/documents/283185/default  Even where funding is available, local community pushback can make it difficult for providers of any type to secure planning permission for new homes, and the planning process itself can be lengthy and costly. ³⁶⁷ Comptroller and Auditor General, Managing Children’s Residential Care, Session 2024–26, HC 1290, National Audit Office, 2025, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf  New homes must also be registered with Ofsted, which can take several months. ³⁶⁸ Comptroller and Auditor General, Managing Children’s Residential Care, Session 2024–26, HC 1290, National Audit Office, 2025, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf
• Staff shortages. The NAO has identified shortages of qualified staff as a key constraint on the availability of places in children’s homes, ³⁶⁹ Comptroller and Auditor General, Managing Children’s Residential Care, Session 2024–26, HC 1290, National Audit Office, 2025, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf  with care staff sometimes leaving for higher-paid roles elsewhere that offer a better work–life balance. ³⁷⁰ Mutual Ventures, Forecasting, Commissioning and Market Shaping, Department for Education, 2024, https://dd1cc44c-4889-4662-b8d7-7b18bc37a2da.filesusr.com/ugd/f0c288_e542122a234e42afb93cdc9aaf7583c9.pdf

The DfE is seeking to address these problems primarily through setting up RCCs, which, as well as their dedicated forecasting function, are intended to commission children’s care. Evidence suggests that collaborative commissioning can strengthen local authorities’ bargaining power, ³⁷¹ Competition and Markets Authority, Children’s Social Care Market Study: Final report, GOV.UK, 2022, https://assets.publishing.service.gov.uk/media/6228726cd3bf7f158c844f65/Final_report.pdf  helping to secure fairer pricing and shape the market to meet local needs.

To support the creation of new residential care places, the DfE has said it is “working with [Ministry of Housing, Communities and Local Government] colleagues on ensuring that there are not barriers in the planning system”. ³⁷² House of Commons Committee of Public Accounts, ‘Oral evidence: financial sustainability of children’s care homes’, HC 1233, 17 November 2025, https://committees.parliament.uk/oralevidence/16730/pdf  Ofsted has also begun prioritising registration applications in areas where homes are most needed – although, as discussed above, it is not always clear from the available data where supply falls short of demand. ³⁷³ House of Commons Committee of Public Accounts, ‘Oral evidence: financial sustainability of children’s care homes’, HC 1233, 17 November 2025, https://committees.parliament.uk/oralevidence/16730/pdf

In parallel, the government is introducing new market management measures in the Children’s Wellbeing and Schools Bill now progressing through parliament. These include steps to improve cost and price transparency, establish a statutory financial oversight scheme for the most ‘difficult to replace’ providers to mitigate the risks of sudden market exits, and introduce profit caps on private providers if necessary.^{*, 374} Department for Education, ‘Children’s Wellbeing and Schools Bill 2024: policy summary notes (as amended in the House of Commons)’, GOV.UK, 2025, retrieved 26 September 2025, www.gov.uk/government/publications/childrens-wellbeing-and-schools-bill-2024-policy-summary

_{*    The financial oversight scheme and the profit cap (if implemented) will apply to independent fostering agencies, supported accommodation providers and children’s home providers.}

To maximise the chances of success in its reform plans, we recommend that:

While the government recognises an ongoing role for private providers in supplying care, it has also suggested that reliance on them must fall. As the NAO wrote in 2025: “Its vision for the mix of providers in the desired market is unclear.” ³⁷⁷ Comptroller and Auditor General, Managing Children’s Residential Care, Session 2024–26, HC 1290, National Audit Office, 2025, p. 36, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf

As things stand, councils across England vary widely in their reliance on privately provided care placements. In 2025, a fifth (21%) of local authorities placed more than half of children in their care in private provision. ³⁷⁸ Department for Education, ‘Children looked after in England including adoptions’, GOV.UK, 26 November 2025, retrieved 23 January 2026, https://explore-education-statistics.service.gov.uk/find-statistics/children-looked-after-in-england-including-adoptions/2025  In Hounslow, the area most reliant on private provision, that figure was 63%. But only 6% of those from North Yorkshire were placed privately. Local areas will need more direction from central government if they are to change the mix of their provision in a co-ordinated way.

The government also needs a clear market vision so it can make more informed policy decisions. For example, if local authorities are to establish many more children’s homes, they will need sufficient increases in capital funding. The previous government’s ban on unregistered care homes, and the fact they continue to be widely used, shows the perils of limiting which care placements councils can use without enough investment in alternatives. ³⁸³ Institute for Government interview.  But without a clear understanding of the desired endpoint of the current government’s reforms, it cannot know how much funding is required.

Take the government’s announcement in autumn 2024 that it would provide £90m (in cash terms) to support the creation of up to 630 additional, council-run children’s home places.^{*, 384} HM Treasury, Autumn Budget 2024, HC 295, The Stationery Office, 2024, p. 84, https://assets.publishing.service.gov.uk/media/6722120210b0d582ee8c48c0/Autumn_Budget_2024_print_.pdf  If delivered in full, this would increase the number of active council-run children’s home places by a quarter (26%) compared to March 2025. ³⁸⁵ Ofsted, ‘Children’s social care in England 2025’, GOV.UK, 16 July 2025, retrieved 23 January 2026, www.gov.uk/government/statistics/childrens-social-care-in-england-2025  But private providers added nearly twice as many places (1,200) last year alone. And even if councils were the only providers to expand their supply of children’s home places, their share would only rise from 16% to 19% with the additional 630 places, leaving private providers to run nearly three quarters (73%).

If local authorities are to start running many more children’s homes, they will also need more certainty in their capital funding to let them plan ahead. As the PAC highlighted in 2025, local authorities do not currently receive reliable capital funding to invest in the building and maintenance of their own provision, ³⁸⁶ House of Commons Committee of Public Accounts, Financial Sustainability of Children’s Care Homes: Sixty-first report of session 2024–26, HC 1233, The Stationery Office, 2025, retrieved 13 April 2026, https://committees.parliament.uk/publications/51065/documents/283185/default  with much of the DfE’s support coming in the form of targeted, time-limited, discretionary grants.

_{*    The government has also separately announced £560m (in cash terms) to refurbish and expand children’s homes and foster care placements.}

Equally, if the structure of the market is to stay much as it is, the government will need to carefully consider the extent to which private providers are incentivised to create capacity in the locations where it is most needed. While the introduction of RCCs will afford local areas some more leverage over the market, it is less clear how they will address barriers relating to property prices, which vary significantly at a regional level and continue to affect the profitability of providing homes in different parts of England. ⁴⁰¹ House of Commons Committee of Public Accounts, ‘Oral evidence: financial sustainability of children’s care homes’, HC 1233, The Stationery Office, 17 November 2025, https://committees.parliament.uk/oralevidence/16730/pdf

The government will also need to assess whether, in the absence of an expansion in public or voluntary provision, RCCs will have enough leverage over market pricing. Existing cross-council frameworks on residential care have often proved ineffective in this regard, with private providers withdrawing after disagreements about pricing and instead offering member councils placements through spot contracts. ⁴⁰² Mutual Ventures, Forecasting, Commissioning and Market Shaping, Department for Education, 2024, https://dd1cc44c-4889-4662-b8d7-7b18bc37a2da.filesusr.com/ugd/f0c288_e542122a234e42afb93cdc9aaf7583c9.pdf  The government’s new measures on price transparency will help to improve oversight and inform negotiations, but they may not fundamentally alter the bargaining dynamic if the social care market is – as some local authorities suggest ⁴⁰³ Mutual Ventures, Forecasting, Commissioning and Market Shaping, Department for Education, 2024, https://dd1cc44c-4889-4662-b8d7-7b18bc37a2da.filesusr.com/ugd/f0c288_e542122a234e42afb93cdc9aaf7583c9.pdf  – a seller’s market, where high prices largely reflect a scarce supply of placements.

The NAO reported that the DfE “believes it has few levers to influence the size or quality of the residential care workforce” because providers are responsible for recruitment, pay and conditions. ⁴⁰⁴ Comptroller and Auditor General, Managing Children’s Residential Care, Session 2024–26, HC 1290, National Audit Office, 2025, p. 34, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf  Recognising that it sets the legal and regulatory framework within which providers operate, the DfE has committed to developing standards for residential care staff as well as reviewing training and qualification requirements, by 2028/29. ⁴⁰⁵ Home Office, ‘Tackling child sexual abuse: progress update’, GOV.UK, 9 April 2025, retrieved 18 March 2026, www.gov.uk/government/publications/tackling-child-sexual-abuse-progress-update/tackling-child-sexual-abuse-progress-update-accessible-version  But it has not explained how it could support providers to address workforce gaps, and has limited evidence on what works. ⁴⁰⁶ Comptroller and Auditor General, Managing Children’s Residential Care, Session 2024–26, HC 1290, National Audit Office, 2025, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf  Children’s homes employ staff from many specialisms, including mental health practitioners, so the DfE will need to work with other arms of central government to ensure there is enough workforce capacity.

Much of the rise in demand for the most specialist placements has come from a reduced use of wider settings, such as inpatient child mental health beds – which fell by a fifth between 2017 and 2022 ⁴⁰⁷ Plimmer G, ‘Mental healthcare capacity for UK teens falls sharply during pandemic’, Financial Times, 16 January 2022, retrieved 13 April 2026, www.ft.com/content/27818675-ee95-4915-a956-6a387abc599d  – and youth offender institutions that accommodate children in custody. ⁴⁰⁸ Comptroller and Auditor General, Managing Children’s Residential Care, Session 2024–26, HC 1290, National Audit Office, 2025, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf

As a result, in 2022, Ofsted recommended better join-up across health services, justice and social care, writing that “national policy changes, such as those in mental health care for children, have had a large impact on sufficiency”. ⁴⁰⁹ Ofsted, ‘How local authorities plan for sufficiency of accommodation that meets the needs of children in care and care leavers’, GOV.UK, 18 November 2022, retrieved 26 September 2025, www.gov.uk/government/publications/how-local-authorities-plan-for-sufficiency-children-in-care-and-care-leavers/how-local-authorities-plan-for-suffic…  Despite this, the NAO found that, in 2025, the DfE had no joint initiatives with health or justice partners, such as joint capital funding bids. ⁴¹⁰ Comptroller and Auditor General, Managing Children’s Residential Care, Session 2024–26, HC 1290, National Audit Office, 2025, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf

While the government has since outlined its expectations that RCCs “establish collaborative relationships with ICBs and other partners such as police forces and youth justice boards”, it has done little to ensure that bodies have the incentives and funding structures to work in this way ^{*, 411} Department for Education, Apply to set up a Regional Care Cooperative (RCC), GOV.UK, March 2026, p.15, retrieved 20 April 2026, https://assets.publishing.service.gov.uk/media/69c3fe0bcdfd19de13d0f60e/Apply_to_set_up_a_regional_care_cooperative_-_guidance.pdf  We echo the children’s commissioner’s warning that siloed regional arrangements risk reproducing the same issues of poor public service co-ordination:

“We should be much more ambitious than the current regional care co-operatives… there needs to be joint funding pots and shared accountability among local authorities, health, justice and, sometimes, education as well, if specialist residential care is needed.” ⁴¹² House of Commons Committee of Public Accounts, Financial Sustainability of Children’s Care Homes: Sixty-first report of session 2024–26, HC 1233, The Stationery Office, 2025, p. 10, retrieved 13 April 2026, https://committees.parliament.uk/publications/51065/documents/283185/default

For example, one council official has told us that appointing a single officer to oversee both the local authority’s children’s budget and that of the local NHS integrated care system improved co-ordination in the area. ⁴¹³ Dellar A, Performance Tracker 2025, ‘Children’s social care’, Institute for Government, 15 October 2025, retrieved 18 March 2026, www.instituteforgovernment.org.uk/publication/performance-tracker-2025/local-services/children-social-care  Previous Institute for Government research sets out the benefits of, and barriers to, similar approaches. ⁴¹⁴ Hoddinott S and Davies N, The case for Total Place 2.0, Institute for Government, 8 May 2025, retrieved 26 September 2025, www.instituteforgovernment.org.uk/publication/total-place-2.0

_{*    The DfE has, to its credit, set out some criteria for the alignment of RCC boundaries with wider public service footprints – something the Institute for Government has previously highlighted as critical to cross-agency working. See Hoddinott S, Devolution, integration, prevention: Do the government’s public service reform plans add up?, Institute for Government, 27 March 2026, retrieved 20 April 2026, www.instituteforgovernment.org.uk/publication/governments-public-service-reform-plans}

In March 2026, the DfE confirmed that the sufficiency duty will remain with local authorities, even as RCCs take on responsibility for commissioning support for children in care. ⁴²² Department for Education, Apply to set up a Regional Care Cooperative (RCC), GOV.UK, March 2026, p.12, retrieved 20 April 2026, https://assets.publishing.service.gov.uk/media/69c3fe0bcdfd19de13d0f60e/Apply_to_set_up_a_regional_care_cooperative_-_guidance.pdf

This creates a concerning misalignment between powers and accountability. Notably, in its two ongoing pilots, the DfE did not test a model in which RCCs discharge councils’ sufficiency duty, after councils raised concerns about remaining legally accountable if a suitable placement could not be found for a child. ⁴²³ Comptroller and Auditor General, Managing children’s residential care, Session 2024-26, HC 1290, National Audit Office, 2025, www.nao.org.uk/wp-content/uploads/2025/09/Managing-childrens-residential-care.pdf

Any move to make RCCs responsible for commissioning children’s social care should be matched by clear accountability arrangements. If RCCs assume a central role in securing provision – as the government’s recent announcement suggests they will – local authorities should not continue to be held to account for a sufficiency duty that they no longer have the power to discharge. Clear lines of responsibility will be essential to avoid creating an adversarial system and support effective collaboration in improving the adequacy of local provision.^* At present, Ofsted does not have powers to inspect RCCs and has told the PAC that the current proposals risk creating gaps in oversight. ⁴²⁴ House of Commons Committee of Public Accounts, Financial Sustainability of Children’s Care Homes: Sixty-first report of session 2024-26, HC 1233, The Stationery Office, 2025, retrieved 13 April 2026, https://committees.parliament.uk/publications/51065/documents/283185/default

Whichever body holds the sufficiency duty, it must be possible to assess whether that duty is being met. At present, transparency and data limitations make this difficult. Local authorities are required to produce ‘sufficiency strategies’, outlining how they will meet children’s needs with regard to the quality, location and type of provision. ⁴²⁵ Department for Education, Sufficiency: Statutory guidance on securing sufficient accommodation for looked-after children, GOV.UK, 2010, retrieved 25 September 2025, www.gov.uk/government/publications/securing-sufficient-accommodation-for-looked-after-children  Yet there is no central record of which authorities have an up-to-date strategy; and establishing this requires trawling individual council websites or submitting Freedom of Information requests. What Works for Children’s Social Care found that, in 2022, almost half of local authorities did not have a publicly available or up-to-date sufficiency strategy. ⁴²⁶ Bach-Mortensen AM, Murray H, Goodair B, Carter E, Briggs E and O’Higgins A, Are Local Authorities Achieving Effective Market Stewardship for Children’s Social Care Services?, What Works for Children’s Social Care, 2022, https://webarchive.nationalarchives.gov.uk/ukgwa/20230308122151mp_/https://whatworks-csc.org.uk/wp-content/uploads/WWCSC_sufficiency_report_Final_Mar…

Similarly, data published by the DfE does not distinguish between children placed in distant or residential placements for a specific purpose and children in these placements due to a lack of suitable alternatives. This makes evaluating the efficacy of sufficiency strategies very difficult.

The government should therefore improve the transparency and consistency of sufficiency reporting, including maintaining a central, up-to-date record of strategies and publishing data that enables meaningful assessment of whether placement decisions reflect need or shortages.

In particular, if commissioning is undertaken at a regional level, the larger operational footprint could increase the likelihood that children are placed further from home, even where remaining close to family, community and support networks would be in their best interests. The government should explicitly test the impact of regional commissioning on placement distances during the roll-out phase of its six new RCCs and take any necessary corrective action.

Transparency gaps are not confined to strategic planning. They also affect the oversight of individual placements. While many local authorities voluntarily notify Ofsted when placing a child in an unregistered home, ⁴²⁷ Institute for Government interview.  reporting is not required, even though such placements are unlawful. The government does not address this transparency gap in its reforms. Instead, it plans to grant Ofsted the power to issue civil penalties against providers of unregistered settings ⁴²⁸ Department for Education, Keeping Children Safe, Helping Families Thrive, CP 1200, The Stationery Office, 2024, https://assets.publishing.service.gov.uk/media/67375fe5ed0fc07b53499a42/Keeping_Children_Safe_Helping_Families_Thrive_.pdf  – a step that seems premature when providers may remain hidden from the inspectorate. Without mandatory reporting, the government will also have limited oversight over how much progress is being made in reducing the use of these settings.

_{*    The PAC found that in the special educational needs and disabilities system, for example, “a mismatch between local authority responsibilities and powers negatively impacts the adequacy of [provision]” and “has resulted in a costly and adversarial system”. See House of Commons Education Committee, Solving the SEND Crisis: Fifth report of session 2024–2025, HC 492, Parliament.UK, 2025, retrieved 13 April 2026, https://committees.parliament.uk/publications/49536/documents/265373/default}