Opportunities and Risks: Practice Models for

Commissioning Foster Care

Dr Clive Sellick

University of East Anglia, Norwich

Practice Models• Spot Purchasing

– the purchasing of placements and related services, often without planning, and at short notice including emergencies

• Outsourcing– the transfer from public authorities of

responsibility for all or most of their foster care provision to non governmental agencies both private and voluntary

• ‘Relational’ Contracting– agreements between LA and IFP to

purchase and provide fostering services

Spot Purchasing 1

1. does not allow IFPs to estimate likely demand or local authorities to predict cost.

2. It effectively prohibits both the local authority commissioners and the independent providers from planning or matching their respective needs and services.

3. this method takes little account of the individual needs of children or the particular strengths of their prospective foster carers.

Spot Purchasing 2

• ‘the use of spot purchasing as a major distributive mechanism merely reflects the fact that children are slotted in wherever there is a vacancy with little opportunity for matching or choice’

• Petrie, S and Wilson, K (1999) Towards the disintegration of child welfare services. Social Policy and Administration 33, 2, 181-196.

Outsourcing 1

• Public sector agency commissioners from central and local government and private and voluntary sector providers each know the type, volume and cost of services to be purchased and provided.

Outsourcing 2

• encourages the establishment of a few, large agencies which successfully manipulate and monopolise the market and, related to this, the range and diversity of services are reduced

International Research 1

• A study of the impact of outsourcing out of home care, including fostering placements for children and young people in the state of South Australia

• Barber, J (2002) Competitive Tendering and Out-of-Home Care for Children: The South Australian Experience. Children and Youth Services Review 24, 3, pp 159-174.

• Barber, J and Delfabbro, P (2004) Children in Foster Care Routledge London

Two major consequences

1. The establishment and supremacy of a few provider agencies, often large, which monopolised the market and drove out smaller welfare agenciesEffect = undermined a strength of the NGO sector by reducing the range and diversity of services

Consequence 2

• 2. Tight and competitive contractual arrangements imposed by public authorities discouraged NGOs from pioneering new developments and innovationsEffect = “reduced the non-governmental sector to agents of the state” (Barber and Delfabbro, 2004:57)

International Research 2

• Evaluations of the impact of outsourcing child welfare, including fostering services, in the State of Kansas.

– McCarthy-Snyder, N and Allen, M (2003) Managing the uneasy partnership between government and nonprofits: lessons from the Kansas child welfare privatization initiative. Presentation at the 25th Annual Research Conference of the Association for Public Policy Analysis and Management. Washington DC 6 November 2003.

– Unruh, J and Hodgkin, D (2004) The role of contract design in privatization of child welfare services: the Kansas experience. Children and Youth Services Review 26, 771-783.

Two consequences

1. “once contracts are let, the supplier becomes a monopolist for a long enough period of time that other nonprofits can be eliminated from effectively competing for future bids”

2. “in most areas the services delivered are less, not more, diverse” (McCarthy-Snyder & Allen, 2003:28)

UK experience

• ‘while the larger agencies within the sector, such as Barnardos and NCH, have the strength, financial power and wisdom to retain adequate space for innovative projects, smaller agencies are becoming increasingly preoccupied with meeting their contract specifications, with little room for manoeuvre. For these agencies, the barriers to entry into the welfare market have been removed, but the option of exit from the market has also been removed from their control. The result may be stifled growth and lack of innovation.’ (Giltinan, D,2002:55, Child care at the end of the millennium, in M. Hill (ed) Shaping Childcare Practice in Scotland, London, BAAF.).

The status of IFPs

2001, 80% of IFPs registered as voluntary, not for profit agencies

2006, 253 agencies were registered as IFPs in England: 33 were ‘old’ IFPs, 28 of these had registered as voluntary, not for profit, organisations. 220 were ‘new’ IFPs and of these 206 were registered as private, for profit, organisations

The Foster Care Market

• There is now a substantial internal market of private sector fostering agencies in England competing with one another for local authority placement contracts.

PriceWaterhouseCoopers (2006:25) ‘Children’s Homes and Fostering’

• ‘The largest IFA players are FCA, NFA, SWIIS and Pathway Care, but --- there are many small local providers. Voluntary providers also form part of this market place, although there are fewer voluntary players registered’

Relational Contracting Arrangements

• ‘The establishment of small networks of local authorities and IFPs was commonly seen as the most effective framework for commissioning from the respondents in this study. Although mostly regional, these networks might include some more distant IFPs where local authorities required long-term or very specialist placements. Such networks of agencies allow local authorities and IFPs to contract with two or three partner agencies. This would go some way to avoiding the risks of monopolies identified in the American and Australian studies. Within each network, commissioned services would be identified and planned and include the full range of fostering placements according to local need’

(Sellick, C, 2006, Opportunities and risks: models of good practice in commissioning foster care. British Journal of Social Work, Volume 36, Number, 8 pp 1345-1359)

Internal Commissioning

‘All of the case study authorities use in-house services as first choice’ (PWC, 2006:47)

• Recommends (p.56):– Institutional separation of

commissioning and in-house provision

– Separation of owner and provider functions for in-house provision

The Future:

Mutualism

• The flowers of fig trees are pollinated by small black wasps whose larvae feeds on the fruit: ‘without the wasps, the figs could not reproduce, and so would die out, and without the figs, the wasps could neither reproduce nor feed’ (p. 331).

or Monopolies?

• Are some agencies becoming a kind of ivy on the face of fostering or a leylandi ‘which grows so fast and casts the shadow that causes so much suburban strife?’ – Tudge, C, (2005:107)The secret life

of trees.

Certainties

• Fostering is no longer an almost exclusively public sector activity

• The mixed economy of foster care provision is driven by a political and professional consensus

• NGO sector is characterised by private IFPs including a few very large agencies

Uncertainties

• Will internal commissioning remain the first resort of LAs?

• As external commissioning expands at what point might this become outsourcing?

• Will regional commissioning regulate the market in terms of eg maximum size and minimum numbers of IFPs?