A substantial majority of current practice in contracting of placements for children by local authorities with independent sector providers is a version of spot contracting. It makes for an inefficient and unmanaged sector economically. The most influential factor on economic efficiency for providers is the occupancy rate of their services. Commissioners have the potential to directly influence occupancy through tools such as block contracting.
In June 2017, NAFP undertook a survey to determine the views of our members on local authority commissioning practice across the three nations. It was completed by independent fostering providers caring for around 5,000 children in foster care. The survey asked for views on commissioning consortia and commissioning undertaken by individual local authorities in England, Scotland and Wales and included specific questions designed by commissioners. We asked members to grade local authority performance on various components of the commissioning process using the four judgements of inadequate, requires improvement, good and outstanding. Alongside the online survey, we also consulted with members in regional and country meetings and through in-depth on-to-one conversations.
When a local authority asserts that its own ‘in-house’ unit cost of foster care is substantially lower than that of an independent fostering agency, the data informing this comparison is likely to require closer inspection. Evidence collected for NAFP suggests that unit cost comparisons are often materially flawed. This briefing lists the main areas where the comparison goes wrong and suggests actions that may be taken to enable more accurate comparative cost calculations to be made.