Ross Murray discusses some of the commissioning cycle in the children's placement market and considers strategies to improve practice.
The way local authorities commission children's care placements has a significant impact on service quality, costs, and the lives of vulnerable children. Following our research into commissioning practice in the children’s care placement sector, I wanted to share our insights into how commissioning works, why it matters, and what can be done to improve it.
In our research, we defined commissioning as the strategic planning, procurement, and management of contracts and services to meet the needs of children in care. This process ensures that local authorities can provide a range of high-quality placements that meet the needs of local children.
The commissioning process: A step-by-step overview
Based on our research, we’ve created an outline model for the steps required for the effective commissioning of children’s care placements for local authorities:
Needs analysis assessment: A needs assessment is the initial step in understanding and addressing the requirements of children in care. It involves gathering detailed data about individual children, including their personal characteristics, assessed needs and the types of placements required. The aggregation and analysis of this information helps to identify the current landscape and potential service gaps. This analysis coupled with consultation with young people, key stakeholders and market engagement activities informs a local authority’s strategy. Commissioning focuses on achieving desired outcomes through any provider, whether internal or external. If internal resources cannot meet the needs, external providers are engaged, or new internal services may be established.
Market engagement: Local authorities actively reach out to current and potential service providers through events, consultations, and surveys. The goal is to understand market capacity, shape commissioning strategies, and inform the following steps.
Service specification: Detailed documents are co-produced and outline precise requirements for service providers, including care quality, safeguarding standards, and desired outcomes for children.
Procurement: Providers are invited to bid through various methods like open tenders and framework agreements to select those who can deliver high-quality placements cost-effectively.
Contract management: Continuous monitoring ensures providers meet their obligations through regular reviews, site visits, and feedback collection. There should be ongoing discussions about whether the provider is getting what they need from the purchaser, and from the other partners in the ecosystem, to ensure the child is well cared for and collaboratively address challenges.
Review and evaluation: Regular assessments gather feedback from children, carers, and providers to continuously improve placement services.
By adhering to these essential commissioning processes, local authorities seek to secure placements that can provide children in care with the necessary support and stability.
Why does it matter?
Commissioning placements for children in care is a critical responsibility for local authorities. At its core, commissioning aims to ensure that every child in care has access to the right placement at the right time. To do commissioning well, this means being able to forecast and help the market understand the likely nature of services required to meet the future needs of children to ensure there are places available when a child enters care or needs to move placement. This means considering each child’s current and potential circumstances and finding a placement that supports their growth and well-being.
Local authorities can use commissioning to communicate their needs to providers, build relationships, and co-create stable, effective care services. This enables local authorities to make the most of their resources by strategically planning and procuring services. When done well, commissioning can lead to better outcomes for children in care, including more stable placements, improved access to services, and overall better experiences.
The current state of commissioning
Looking at how commissioning operates today reveals a complex landscape. The Competition and Markets Authority's (2022) market study found that the current system of commissioning is not supporting the desired outcomes for children as well as it should. Local authorities struggle to effectively forecast their future needs, engage with the market to ensure there is a sufficient and appropriate supply of placements, and procure placements as efficiently as possible.
Commissioning in children's social care is extremely challenging. Let's break down the major obstacles:
Lack of appropriate placements. The most common and pressing challenge that was identified as part of the research was the lack of sufficiency in both residential and foster care. Local authorities particularly struggle to find placements for older children and children with complex behaviour or specialised needs. Additionally, the geographical distribution of children's care placements often results in significant disparities, with some regions having an abundance of placements while others face severe shortages. Even in areas where there are sufficient placements, several factors can make it difficult for the host authority to utilise these resources effectively
Forecasting Challenges. Forecasting future needs, especially for children with complex requirements, is difficult due to data limitations. Many authorities struggle with forecasting accurately because of small purchase volumes and varying child needs, leading to uncertainty about whether to invest in new capacity. LAs lack the data and analysis needed to strategically plan and demonstrate the extent or cost of supply gaps. Available data does not reliably capture true demand, lacks a clear typology of need, and placement cost data is not easily linked. This means understanding existing supply and costs is challenging. This issue was discussed in more detail in our recent webinar. The recording is available here.
There are limited resources. Austerity and reduced LA funding have led to cuts in non-operational activity, impacting forecasting, commissioning, and market shaping. Commissioners have reported having inadequate resources and expertise to deal with changes in the sector.
Market dynamics. We're dealing with a market where demand often exceeds supply, giving providers considerable power. High demand and limited supply means that authorities must commonly make decisions based on availability rather than the best match for the child.
Limited market engagement. Many LAs struggle to engage with providers strategically and share important information about needs and expectations. Sufficiency statements, intended to communicate local needs, are often outdated, budget-driven, and lack crucial details.
Building better commissioning: what works
Despite these challenges, there are principles that can guide improvement in commissioning practices. Here's what successful commissioning looks like:
Strong Relationships: The most effective commissioning teams prioritise building and maintaining strong relationships with providers, social work teams, and other stakeholders. This isn't just about being friendly - it's about creating transparent, trust-based partnerships that can weather challenges and adapt to changing needs. To develop strong relationships, local authorities should engage with providers regularly and strategically.
Transparency and integrity. Commissioners must maintain transparency with providers regarding their decision-making processes and ensure that all stakeholders are adequately informed. This approach fosters trust and ensures alignment towards common objectives.
Data-Driven Decision Making: Successful commissioning requires robust data collection and analysis. Authorities need to understand not just current needs but also trends and patterns that can inform future planning. This means investing in good data systems and sharing information across regional partnerships. Therefore, authorities must capture the right data from the outset and ensure that it is reliable and up-to-date, and decision makers must use data analysis to understand their needs, manage demand, negotiate prices, and monitor the quality and outcomes of care.
Strategic commissioning arrangements: LAs should develop clear, outcomes-focused sufficiency strategies to guide commissioning decisions and communicate needs to providers. LAs should adopt a portfolio approach that makes use of internal, block, framework and spot purchase to provide a sufficiency of care placements. Block contracts can provide stable income for providers, potentially lower costs for purchasers and can also be used to enhance care delivery. To support this activity, authorities should make use of the expertise within their services and local providers, such as Think Family.
Smart contract management: Effective commissioning demands sophisticated contract management. This means developing clear performance indicators, building in appropriate risk-sharing mechanisms, and maintaining enough flexibility to adapt to changing circumstances. The most successful arrangements often involve long-term partnerships rather than transactional relationships.
Looking to the Future
Improving commissioning isn't just about making systems more efficient - it's about ensuring better outcomes for vulnerable children. While the challenges are significant, the principles outlined above provide a pathway to improvement. The path forward requires investment in people, systems, and relationships, but the potential benefits - both for authorities and, most importantly, for children - make this investment worthwhile. As we continue to face challenges in the sector, these principles can serve as a foundation for building more effective commissioning practices.
Commissioning should be viewed as an iterative cycle, where local authorities can cooperate to share ideas and resources to meet local needs. This collaborative approach can help address gaps in provision, enhance service quality, and ensure that resources are used more effectively to benefit vulnerable children.
You can read our full report, which discusses this topic and more, here.
If you would like to discuss these findings further, please get in touch with ross.murray@mutualventures.co.uk
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