TACT – the UK’s largest fostering and adoption charity, warmly welcomes the independent review of foster care in England, produced by Sir Martin Narey and Mark Owers. The report published today, provides an overdue recognition of the importance of foster care to the UK care system and the vital role foster families play in caring for the UK’s most vulnerable children.
TACT CEO Andy Elvin said: “We very much appreciate the report’s kind words about our ground-breaking partnership with Peterborough City Council. We hope other local authorities look at this and consider how they might transform their care services in order to improve outcomes for children in care. We also applaud the reports recognition of foster parents as the experts on their foster child. The professional network often forgets that, along with the birth family, it is the foster carer who knows most about the child. Decisions about the child should never be made without the foster parents’ involvement and insight”
The report’s recommendation that Ministers should direct the setting up of a Permanence Board under the chairmanship of the Director General for Children’s Social Care, is particularly welcome, and something that TACT has long been campaigning for. The focus of a joined-up body should be on supporting all family types so kinship carers and birth parents whose children return to them can access the same long-term assistance as foster carers and adopters.
Andy Elvin said: “It is gratifying that TACT and other smaller voluntary sector providers have been acknowledged as charging fees substantially lower than the average, and that any surplus TACT makes is ‘genuinely – and commendably – modest’. It has always been our ethos that instead of making money from the placing of children in foster homes, all of our excess income goes back into improving the lives of our foster carers and the children we care for”.
On the matter of family contact, TACT warmly endorses the report’s recommendation that the opinion of foster carers about the effect of contact on the child in care should be an important factor in helping courts to come to an informed decision.
Martin Barrow, an experienced foster carer says in the publication ‘Welcoming to Fostering’ co-authored by TACT CEO Andy Elvin and quoted in the report:”On a number of occasions we have been in conflict with placement teams over arrangements for contact, with little success. In our view, placement teams put a parent’s demands ahead of the child’s wishes and will adhere to the family court’s proposed contact schedule even if it is having a materially negative impact on the child.”
We are also pleased that the report shares our belief that children on the edge of care and their families should routinely gain access to foster care. TACT has been successfully running a scheme called Parallel Parenting – with specially trained TACT carers delivering home coaching to help families successfully look after their children to avoid admission into care or when they return home from care.
It is disappointing that the report has rejected the idea of a large-scale national advertising campaign funded by central government. While we acknowledge that there are fostering households without a child living with them, there is an urgent need to attract more people willing and able to care for sibling groups, teenagers and children with disabilities.
Fostering News: Councils should have choice to bin Independent Reviewing Officer role, says fostering stocktake
Fostering stocktake recommends 36 changes to the fostering system, including supervision of long-term placements
Local authorities should be allowed to “dispense with” independent reviewing officers (IROs) and re-invest the savings in the frontline, the report of the government’s fostering stocktake has said.
The report – published this week and authored by government advisers Sir Martin Narey and Mark Owers – said there was “little to recommend the IRO role” after an Ofsted thematic report identified a “number of weaknesses”, concluding there was a “fundamental problem” around the role’s value.
“The real issue is whether, rather than spending large amounts of money checking that children are being appropriately placed and cared for in the care system, we should invest that money in more frontline and line management staff to make that happen.”
Reinvesting the money spent on IROs on frontline staff and managers could generate “£54 to £76 million or more”, according to a breakdown of the estimated number of IROs, an average £40,000 a year salary and the number of children in care.
A 2013 Ofsted thematic report of the role had identified a “number of weaknesses” in its execution, the review said, including poor care plan oversight, excessive caseloads and a failure to consult properly with children.
Local authorities have been required to employ IROs since 2004 to ensure care plans for children and young people fully reflect their needs and that each child’s wishes and feelings are given full consideration.
Concerns were raised in the stocktake about how independent the role is when they are employed by the local authority they work for.
Changes in supervision process
The review recommended 36 changes to the fostering system with one focusing on changes to how long-term foster placements are supervised.
The authors argued that a placement being supervised by a fostering social worker (sometimes referred to as a supervising social worker) and a children’s social worker creates too much “unnecessary intrusion” in a fostering placement.
The report said feedback from service users was more positive about fostering social workers than children’s social workers, citing the high turnover in staff for children’s social workers.
A fostering social worker is the foster parents’ social worker, while the children’s social worker’s role is to look after the interests of the child in care. The authors suggested in each case authorities should decide on one of these social workers to supervise and offer support to long-term foster placements.
“In most cases, we suggest the single individual should be the fostering social worker but that can be determined on an individual basis.
“Where it is the fostering social worker who is chosen to take on the dual role, it would mean that individual would act as the responsible authority in supporting the child in placement and would undertake looked-after children reviews, personal education plan reviews, and managing contact with the birth family, while continuing to offer support to foster carers.”
The report said changing from two social workers to one would reduce family intrusion and deliver “cost savings to hard-pressed local authorities”, but it stressed this recommendation was made in the best interests of the child.
It also said there should be a “thorough assessment and consultation” with the sector over the effectiveness, cost and value for money of fostering panels.
The report recommended foster carers do not have the same status as social workers. “We can see where employment status might bring some protections to carers. But it would also bring significant obligations, more oversight, and drastically impinge on their independence. Indeed, we believe that the unique status and heart of fostering would be lost.”
Local authorities should be reminded that the delegation of total authority for day-to-day decisions for a child in foster care applies automatically unless there are “exceptional reasons” not to delegate, the review said.
It stated there should also be a national register of foster carers, the report added, so matching can be informed by carers’ experience, skills and availability.
Costs of fostering arrangements
On the ongoing debate over costs of private fostering arrangements, the report said: “The reality is once local authority overheads are taken into account, along with the indisputable reality that [Independent Fostering Agencies] care for more challenging children and therefore have to invest in both the pay and support of their carers, the gap is very small.”
However, this did not make local authorities wrong to adopt an ‘In House First’ policy when trying to match a child.
The stocktake recommended establishing a permanence board to monitor the whole of the children’s care system, and that local authorities should consider using foster care as a means of preventing unnecessary entry into care for children on the edge of the system.
It also said the Department for Education should update guidance and regulations so foster carers do not feel the need to curb “the natural instinct to demonstrate personal and physical warmth”.
Following the review’s publication, Narey said: “Foster Carers must be allowed much greater authority in making decisions about the children in their care and they need to be liberated to offer the physical affection which is a vital and necessary part of most children’s healthy upbringing.”
He added: “We make 36 recommendations and if all were to be implemented, as I hope they will be, then local authorities will have foster carers who are better motivated and better appreciated. And they will be offering greater permanency for children whose lives in care are too often disrupted.
“At the same time local authorities should make significant financial savings through obtaining better deals from most of the independent fostering providers, the commissioning of which is too often inadequate.”
Opportunity to ‘celebrate foster care’
Nadhim Zahawi, now confirmed as under-secretary of state for children and families, welcomed the report and said it is an opportunity to “celebrate foster care”.
“We will carefully consider the review’s recommendations, alongside those from the Education Select Committee, over the coming months to determine how they can help us to make sustainable improvements to the fostering system and to the outcomes for looked-after children,” he said.
Anne Longfield, children’s commissioner for England, agreed with the recommendations for clearer guidance on physical affection and the ability of carers to make day-to-day decisions, but rejected the recommendation to remove Independent Reviewing Officers.
“We know from cases referred to our advice service Help at Hand that IROs often raise the alarm about a child’s situation that needs help to resolve,” Longfield said.
These views were shared by Natasha Finlayson, chief executive of Become, who said: “Given the report’s acknowledgement of the need for independent advocacy, the call for the removal of Independent Reviewing Officers (IROs) seems misplaced. IROs provide a valuable function of oversight and support for children in care, and this report does not provide a robust justification for their removal.
“We are concerned that this will result in the erosion of support for children’s rights and entitlements, which runs counter to the many good ideas in this report,” Finlayson said.
Kevin Williams, chief executive of The Fostering Network, said he was “disappointed” by a “lack of vision and ambition”.
“We are shocked that the report states foster carers are not routinely underpaid and are therefore disappointed that there is no move to ensure foster carers are properly paid for the work that they do.”
He added: “Overall we think this is an opportunity missed to create a foster care system fit for the 21st century.”
Andy Elvin, chief executive of TACT Fostering & Adoption, welcomed the report’s recommendation for a permanence board: “The focus of a joined-up body should be on supporting all family types so kinship carers and birth parents whose children return to them can access the same long-term assistance as foster carers and adopters.”
Harvey Gallagher, chief executive of the National Association of Fostering Providers, said: “It is clear that local authorities should no longer be choosing fostering placements on the basis of an outdated notion of ‘cheapest first’.
“The stocktake has found that, given that the children placed with [independent fostering providers] IFPs are older and have more complex needs, the cost differential is not significant enough to warrant the huge factor it has played in justifying ‘in-house first’ placement policies. The most appropriate placement for each child should never have been the cheapest anyway, and we hope that we can now move away from that notion.”
The Foster Care Co-operative was visited by Ed Mayo, Secretary General of Co-operatives UK, on Thursday 1st February. He was specifically looking at successful and innovative organisations operating as co-operatives. He spent the time meeting the team and hearing about what they bring to the organisation.
Ed also visited Malvern Book Co-operative and Jamboree Co-operative whilst in the area.
Ed Mayo said: “For nearly twenty years the Foster Care Co-operative has shown what a difference it makes when an organisation is run by the people most involved, the foster carers and staff. The wider social care sector is gradually waking up to the importance of participation, something that the Foster Care Co-operative has pioneered for almost two decades. There is so much that can be learnt from this inspiring organisation.”
Ed Mayo (far left) with staff from The Foster Care Co-operative
The Foster Care Co-operative (FCC) was founded in 1999. Since then, the co-operative model has proved hugely beneficial. As there is no involvement from distant shareholders or investors, FCC’s members on the ‘shop floor’ have always been consulted and listened to. This has made the organisation totally ‘transparent’ and responsive to change – particularly at a policy level. It has also created a culture of greater democracy.
Simply put, FCC has given its staff who work directly with children the power to make positive change within the organisation for the good of those children. A perfect example of the co-operative model.
FCC’s founder, Laurie Gregory, was a Deputy Director within a local authority and a foster carer himself when he started FCC.
“Quite apart from the morality of it, I wanted to give more children the chance of family life,” Laurie said. “I instinctively did not wish to start a 'for profit' company and after meetings with my Chamber of Commerce and invaluable advice from Co-operatives UK, I chose the model of multi-stakeholder and common ownership and registered the company. We have grown slowly by bringing new people to fostering."
FCC remains the only not-for-profit fostering agency operating as a co-operative in the UK. It has grown steadily and organically and now has teams situated throughout England and Wales, with offices in Malvern, Cardiff and Manchester. Generally, FCC’s status as a co-operative has made the organisation more attractive to new staff and foster carers alike – perfectly complimenting their not-for-profit approach.
There are nearly 7,000 organisations in the UK operating under a co-operative structure in lots of different sectors, giving their members the power and the passion to make a positive impact, along with a voice that will be heard.
Ed Mayo is the author of the book ‘Values: how to bring values to life in your business’, published by Greenleaf. You can also find out more about co-operative organisations here: https://www.uk.coop/
Proposals to improve foster care following a major review of the system have received a mixed response from the sector, garnering support from some, but also attracting criticism for not being ambitious enough.
The foster care stocktake, led by government adviser Sir Martin Narey and children's social worker Mark Owers, makes a total of 36 recommendations to improve the system, including establishing a national register for foster carers and a shift to regional commissioning arrangements in order to get better value for money.
It also calls for more clarity about the ability of carers to take independent decisions about the children they are fostering, and for guidance not to discourage carers from being physically affectionate to the children in their care.
And it suggests there should be greater regional co-operation on marketing campaigns to recruit foster carers.
It also moots the establishment of similar arrangements to the existing Adoption Leadership Board and Residential Care Board for foster care - and for the creation of a "permanence board" to oversee them all, under the chairmanship of the director general for children's social care, the most senior official in the Department for Education responsible for the care system.
But The Fostering Network said it is particularly concerned that the review concluded that foster carers are not underpaid and that it contains no proposals to review the allowance they receive.
The charity also said the proposals do not recommend that the minimum fostering allowance is extended to carers looking after young people aged 18 to 21 through Staying Put arrangements.
"We are disappointed in the report's lack of vision and ambition for the future of fostering," Kevin Williams, chief executive of The Fostering Network said.
"While we are pleased with a number of the recommendations we are concerned that overall we will be left with a continuation of the existing status quo.
"We are shocked that the report states that foster carers are not routinely underpaid and are therefore disappointed that there is no move to ensure that foster carers are properly paid for the work that they do.
Williams added: "Overall we think this is an opportunity missed to create a foster care system fit for the 21st century."
Labour's shadow children's minister Emma Lewell-Buck was also critical of the proposals.
However, chief social worker for children Isabelle Trowler, described them as "radical".
Among other recommendations made by Narey and Owers is to allow councils to ditch the independent reviewing officer (IRO) role. They conclude that there is little to recommend the role continuing and the money saved by axing IROs should be reinvested in frontline social work.
But children's commissioner for England Anne Longfield and the charity Action for Children have criticised the proposal, saying that IROs play a vital role in supporting looked-after children.
"I do not support the recommendations to remove IROs. We know from cases referred to our advice service Help at Hand that IROs often raise the alarm about a child's situation that needs help to resolve," said Longfield.
Action for Children director John Egan added: "The role of the IRO is vital in ensuring oversight of every child's care plan, and in independently challenging local authorities when things aren't happening as they should.
"To suggest ‘dispensing with' the role of the IRO - without any thought to a replacement - is concerning."
Meanwhile, children's rights organisation Article 39 suggested that the argument for ditching IROs had not been fully considered.
Harvey Gallagher, chief executive of the National Association of Fostering Providers, said that the stocktake's recommendation for a national register of carers could help local planning of places but fears that agencies may struggle to provide up-to-date information.
"A national register of foster carers with aim of understanding more about where carers are and who they are could be beneficial for planning and sufficiency," he said.
"But we struggle to see how this could be used as a tool for placement matching at the moment, given the fluid nature of foster care and the challenges of so many different agencies keeping this up to date."
Andy Elvin, chief executive of The Adolescent and Children's Trust, said the report's recommendation that ministers should set up a permanence board was particularly welcome.
"The focus of a joined-up body should be on supporting all family types so kinship carers and birth parents whose children return to them can access the same long-term assistance as foster carers and adopters," he said.
Alison Michalska, president of the Association of Directors of Children's Services, said that while it supported the concept of a permanence board, it does not back a national register of foster carers.
"A shared language and holistic focus on permanence as a whole is long overdue and would be a helpful step away from the current siloed approach," she said.
"However, the ADCS would not support the creation of a national register for foster carers. Maintaining a national register would be a huge logistical task and require significant ongoing funding.
"It is also unclear how a register would improve the recruitment of foster carers who are willing to care for the cohort of children in care. This money would be better invested in services to support children and young people directly such as improving the support available to foster carers and developing a national foster care recruitment campaign to recruit more carers willing to care for older children, sibling groups and children with complex needs, for example."
Barnardo’s has responded to an independent review of the fostering system in England which makes recommendations to the government about improving foster care.
The review by Sir Martin Narey and Mark Owers, published by the Department of Education today, makes 36 recommendations following a consultation in April and June 2017.
Barnardo’s Chief Executive, Javed Khan said:
"We are pleased the report highlights the positive and important role of independent foster agencies, (IFAs), like Barnardo’s in placing vulnerable children in loving stable families.
It’s vital these children have the right foster carer to help them recover from trauma and go on to lead positive futures. This, rather than cost, should always be the primary consideration when placing a child.
While we welcome the idea of a national register of foster carers, we urge the government to consider how IFAs like Barnardo’s can be fully involved in ensuring that the right number of carers with the right skills are on it.
We work with authorities to meet the care needs of vulnerable children, which includes providing support for families so that children can remain with their birth families.
We look forward to working closely with national and local Government on improving foster care for England’s most vulnerable young people, including siblings and disabled children, who are among the harder children to place."
The Narey/Owers review is not the overhaul many wanted, but makes realistic and affordable recommendations for improving care
Advocates for radical reform to the fostering system in England should look away now. Sir Martin Narey, a government adviser on children’s social care and former chief executive of Barnardo’s, and Mark Owers, a children’s services adviser, have conducted a review for the Department for Education, and they are strikingly positive about what they have found.
The care system has an undeservedly poor reputation, and fostering is a success story that rarely gets the credit it deserves, they say. Although they have strong views on how and why fostering could be improved, children in care are remarkably positive about fostering and their sense of wellbeing is “surprisingly high”, according to Narey and Owers.
The review, conducted over the past six months and published on Tuesday, is based on interviews with and submissions from hundreds of people with an interest in fostering, including foster carers, care-experienced children and young people, fostering providers and social work leaders. It is eagerly awaited by the care sector, with many hoping it will bring about fundamental change. Last week Kevin Williams, chief executive of the Fostering Network, wrote about his hopes that the fostering review would recognise the need for urgent reforms.
Those awaiting a rallying call for change may be disappointed. On the key issue of fostering allowances, widely criticised by carers, the review concludes that they are adequate – particularly once tax and benefit arrangements are taken into account – and are not an obstacle to recruiting high-quality carers at current levels. Despite claims of a shortage of fostering families, the review finds that, at any one time, there are about 16,000 fostering households without a child living with them.
The review rejects the notion that foster carers should be defined as professionals with the same status as, for example, social workers. And it warns of the adverse consequences of extending employment rights to foster carers, as being sought in a claim against Hampshire county council. “This could negatively affect the heart of fostering,” write Narey and Owers.
This is not to say that the review’s suggestions for change are not significant. Indeed, Narey and Owers recommend the creation of a permanence board, chaired by the most senior official in the department responsible for the care system. Its purpose would be to promote a whole system approach, including adoption and residential care, lasting well beyond the age of majority.
They also call for an overhaul of the way local authorities plan and commission fostering, saying there is significant potential to reduce spending on fostering while securing better placements for children. They propose scrapping the role of the independent reviewing officer – saving £70m a year – and question the benefit of fostering panels.
But the most profound change recommended by the review is a renewed focus on the parenting aspects of fostering, as opposed to caring. For example, it strongly recommends giving foster carers greater discretion over everyday decisions that would normally fall to parents, such as haircuts, clothes and friends. Needless bureaucratic barriers that prevent foster carers from treating foster children as they would treat their own children should be removed.
It also urges the DfE to issue guidance to encourage foster carers to feel confident in showing physical affection and comfort to foster children, which is vital to a healthy childhood.
“... A shifting philosophy of fostering which has seen ‘foster parents’ become ‘foster carers’, children discouraged from calling their long-term carer Mum or Dad, and sometimes a framing of carers as just another professional in a child’s life, needs to be arrested,” says the review. “Carers should be in no doubt that, unless it is unwelcome to the child, they should not curb the natural instinct to demonstrate personal and physical warmth.”
In response to frequent concerns from foster carers, the review also makes robust recommendations around birth family contact, which often goes ahead against the advice of carers and despite clear evidence of distress to the child. The law was changed in 2011 to specify that contact arrangements should only be in place where they are in the interests of the child’s welfare. Yet evidence submitted to the review suggests that practice has not changed.
“Professionals should not shirk from offering evidence to the courts about the potentially damaging consequences of contact,” say Narey and Owers. As a parent, if your gut instinct is that contact is wrong, then say so.
The review makes realistic and affordable recommendations to improve foster care, but at its heart is a simple call for carers to be well-supported, well-trained, treated as the experts they are, and allowed to lead on decision-making for and with children. They want carers to be biased and tenacious in pursuing the interests of their foster child. This may not be the root-and-branch overhaul that many anticipated, but I believe the review’s positive impact will be felt for many years to come.
Martin Barrow is a foster carer and writer. He is co-editor of Welcome to Fostering, a handbook for foster carers
Private equity has turned care of the vulnerable into a racket that exploits both the carer and taxpayer
The three girls were born to others elsewhere, yet she calls them her daughters. She is all the family they have here. She helps with their homework and cuddles them through the inevitable tears. Their home is now her Liverpool terrace, its books jostling with African art. Maria is their foster mum. Over 10 years, she has cared for kids so troubled it hurts to hear the bare details. They come to her after being sexually abused at home, and then groomed by strangers. Teenagers are so unsettled they can’t even use the toilet – instead they urinate behind the sofa and leave turds in shoeboxes. Ten-year-olds speak only with fists – which they sometimes use on her.
Maria’s life can be counted in police callouts, urgent summonses to see headteachers, and sleepless nights. It’s 24-hour work that takes every scrap of physical and emotional effort: two children were so troublesome that for four years she never got a full night’s sleep. That means she’s paid less than the minimum wage of £7.50 an hour. But it’s never about the cash. These children come to her with no hope, no smiles, no joy, “and then you see them blossom into who they really are – and that’s cracking, that’s what makes it worthwhile”.
I visited Maria and her girls just a few days ago, as Carillion hit the news. Her world, with both tea and love on tap, could not seem further from PFI hospitals and HS2 tunnels. Yet over the past few years, unknown to the public, foster care has become thoroughly Carillion-ised. Just like the collapsed construction firm, it is now a big business that is utterly parasitic on the state and reliant on dubious financial engineering.
I understand why politicians and pundits now predict the end of the costly private-sector infiltration of public services. But to see what is happening in foster care is to realise a grim truth: the debt-ridden, return-greedy business model that has ruined Britain has wormed its way into the most private areas of our lives. It has penetrated even the intimacy of child-rearing.
Central to the new business of fostering is austerity. Because of spending cuts, the sector is booming, taking more money from councils – and thus making the cuts to come far bigger. The household benefits cap, the two-child limit for poor families, the precarious low-paying jobs market: all are helping to tear families apart – and pushing more children into care. In England, 72,000 children are in care, a total that has risen every year for nine years.
For most of us, such figures bring despondency. Among financiers, however, they represent opportunity. In 2013, the Financial Times reported that private-equity barons were sniffing around this “growth market”. Analysts called fostering “a classic private equity play”.
Sure enough, the barons have upended the industry. Once there were hundreds of private fostering outfits, typically small and set up by former social workers, but now finance firms have hoovered up many of them. The result is an expensive oligopoly.
Take Maria’s home city of Liverpool, where almost 900 children live with foster parents. Private agencies take care of just under a third of those – at a cost of over two-thirds, £10.5m, of the council’s £15m fostering budget. A city hit so hard by austerity that it teeters on the verge of bankruptcy now spends so much on private foster care it has had to cut back even more on vital services.
Nor is Liverpool alone. In a 2016 report, the government adviser Martin Narey found that private foster agencies were “charging almost 92% more” than local authorities.
The National Association of Fostering Providers (NAFP), which represents all the major chains, among others, can see “very little evidence that compares the cost of like-for-like placements of children in foster care”. Yet Liverpool council provided me with just such a comparison. It has recently recruited a carer from a for-profit agency, who looks after two girls and a boy, aged seven and under. For that, the agency had charged the council £1,956.40 a week. Now she’s in-house, the fee has fallen to £758.34. No wonder Liverpool’s cabinet member for children’s services, Barry Kushner, is recruiting more carers for the council.
There is a difference between paying for foster care, which is labour-intensive, and profiteering off the backs of children. The big money certainly doesn’t reach the carers. Before joining the council as a foster mother, Maria worked for a private agency – on the same pay.
One reason for agencies to charge more is that they take on older children with more complex needs. The NAFP argues: “Local authorities tend to place less complex children with their own in-house foster carers.” Yet Kushner reports a senior manager at a giant private agency telling him: “We want older children. We want complex needs.” This is a business model based on monetising vulnerability.
These are children who have been through more concentrated trauma than most adults ever have to face. They should be all that counts. Instead, they are cogs in giant financial machinery. Take the biggest firm of all, the National Fostering Agency. In the past six years it has been passed between three private equity shops. It’s currently under Stirling Square Capital Partners – which also owns businesses making “premium trousers”, running holiday parks and deploying armed guards.
The National Fostering Agency is held by a division called SSCP Spring Topco. Going by its last published accounts, it has been loaded up with vast expenses and debt, so much so that it paid no corporation tax in the 18 months to March 2016. Further down is a note that discloses that the foster care business is carrying a loan for £62.5m from yet another division of Stirling Square Capital, this one based in Luxembourg. The annual interest on that loan is 14% and it runs for 10 years. Neither the National Fostering Agency nor Stirling Square Capital wished to respond to my list of questions, but this looks like a way to funnel millions spent by British taxpayers on disadvantaged children out of the country to a tax haven. As the Guardian reports, such chicanery is common among the financiers who now run foster care.
I ask Maria what she makes of this and she boggles. She is self-employed: no paid holidays, no company pension. Women such as her work around the clock to give troubled children the best possible start in life – and their labour is being used to rake off profits by financial engineers they will never meet, for whom foster care is just another business in the portfolio. “Oh my God,” she keeps saying. “I feel such a mug.”
Maria’s name has been changed at her request, and some details obscured
• Aditya Chakrabortty is senior economics commentator for the Guardian
Analysis reveals multimillion-pound dividends and huge salaries at independent foster agencies
Foster care agencies run for profit by private equity investors are pushing up the cost of placing vulnerable children with families, local authorities have warned.
Concern about independent foster agencies (IFAs) came as a Guardian investigation revealed that one of the largest firms in the sector channelled money to Luxembourg via a complex loan arrangement. Analysis of the accounts of several private equity-owned IFAs, which charge councils to match children with foster carers, also reveals multimillion-pound dividends paid to investors and six-figure salaries for directors.
The details emerged ahead of the government’s national fostering stocktake, which is due to report on the sector. Ahead of the report, councillors and foster care veterans voiced concern at the effect of IFAs on council budgets. IFAs typically pay carers higher fees than local authorities and sometimes offer “golden handshakes” worth up to £3,000 to poach them from rival agencies.
David Simmonds, a Conservative councillor who is vice-chair of the Local Government Association (LGA), said that if cash constrained local authorities could pay carers more to retain them they would end up spending less overall.
“What appears to be happening is that the agencies see they can make money out of something local authorities have to supply by law,” he said. “They offer carers 25% more and then charge the local authority double or triple what they would pay in-house and make a nice bit of profit. From the agency’s point of view it’s a no-lose situation. The shortage of carers means there isn’t competition so prices don’t come down. It’s a market that isn’t functioning, to the detriment of the state.”
Carers are in short supply, but councils are legally obliged to find a foster home for vulnerable children, meaning they are often forced to turn to IFAs if they don’t have in-house carers. Fees paid to IFAs per foster child are almost 92% higher than those paid directly to carers registered with the council, according to a 2016 report by government adviser Sir Martin Narey, with the average fee per week rising to £759 for IFAs, from £396 for council-registered carers.
Narey said the gulf was “very large”, even if there were some reasons other than profit to explain it – such as IFA-registered carers taking on more challenging cases. According to Coventry city council, its IFA placements cost £40,000 on average per year compared with £30,000 for council-registered placements.
The number of children living with foster carers registered to IFAs rose 5% to 17,410 from 2012 to 2016, according to government figures, compared with a 1% rise in children with carers registered directly to the council, to 34,395.
Liverpool councillor Barry Kushner said the cost of paying inflated fees to IFAs had cost the council an extra £6m in one year. He said the council has begun trying to lure foster families back in-house by offering incentives such as reduced council tax, training and free leisure centre passes.
A spate of mergers and acquisitions among foster care firms, typified by last year’s £400m tie-up between the National Fostering Agency and rival Acorn, has fuelled concern about IFAs.
Andy Elvin, chief executive of fostering and adoption charity TACT, warned that consolidation would reduce competition.
“We are moving towards some de facto monopolies or potential cartels of private IFA supply,” he said. “As companies get bigger and have more power over local authorities, they hold more of the supply. This can lead to costs being increased to local authorities, because they need the placements.”
The merger between Acorn and NFA created a vast fostering company owned by private equity group Stirling Square Capital Partners (SSCP).
Analysis by the Guardian of accounts filed at Companies House reveals that the firm uses a corporate structure that transfers money to a parent company in Luxembourg. SSCP owns the firms via subsidiary SSCP Spring Topco, which had annual revenues of £104m but lost £21m after hefty interest payments on loans. This included an interest payment on a £62.5m loan from the Luxembourg parent company. Interest payments have the effect of reducing a company’s taxable profit.
The accounts also show that SSCP Spring Topco’s highest-paid director took home £319,345 for the year. The Guardian has contacted Stirling Square for comment about whether the loan structure generates a tax benefit.
Two other companies in the sector, Orange Grove Fostercare and Partnerships in Children’s Services (PICS), are owned by private equity group Sovereign Capital. Labyrinthine accounts for the Orange Grove group show that a parent company, Boston Holdo B, paid investors a dividend of £1.7m last year and took investor loans of £5.4m, paying an interest rate of 14%.
Sister company PICS paid £2.2m interest on borrowings including £14m of loans from investors, some of whom were company directors. The highest paid director took home £200,000, including pension contributions.
Sovereign said the high-interest loans were “normal practice” and that it paid all “applicable” tax.
Elvin said: “Any money leaving the system is not being spent directly on vulnerable children. Therefore all dividends, bonuses etc are being paid directly from taxpayers’ money allocated to be spent on children in care.
“The private sector is not driving down cost through competition, it is not driving up quality and it is taking out significant sums of taxpayers’ money. Where is the benefit to the taxpayer or to children in care?”
In late 2016, The Children’s Family Trust (CFT) applied for a sum of money from the National Lottery to fund a project titled ‘Ace in the Pack’. The hope for this project was to develop our current Children’s Guides for our Looked after Children, making the information that needs to be accessible to them more user-friendly and interactive. With the support of Paul and Max from ‘C&T’, we anxiously awaited the outcome of this application and began thinking about how this money could help us develop our current packs.
We are absolutely thrilled to announce that we were successful in our application and thanks to the National Lottery, we have been able to completely re-vamp our guides for looked after children and bring them into the 21st century!
Each playing card is representative of a different piece of information, message or topic. Given the generosity of the National Lottery, we wanted to make sure that our cards are looking progressively towards the future and therefore, in an age where technology is paramount, we decided to incorporate the use of QR codes to elaborate on the snippets of information displayed on each card. We understand that not everyone will have access or be able to use a smart phone or tablet to scan the QR codes, therefore they are just additional information for our children and young people, expanding on the information already provided on the playing cards.
The information detailed on our cards was created in consultation with a group of young people in our care, as well as a team of staff with differing experiences of fostering and skills. By combining these groups of people, we were able to ensure that our cards not only met the requirements of the children’s guide for our organization, but also took into consideration the kinds of information that our looked after young people felt would be beneficial to other children in our care. As children are at the heart of CFT, we wanted to involve them in this project and we were thrilled to have the participation of some of our children and young people who feature on the cards as they talk about their experiences and give advice from their time in care. We would like to thank Callum (age 16) and Adam (age 15) for all their hard work and input on this project, they really demonstrated their creative ability and passion towards a project, especially when working with Paul and Max to be filmed and helping to edit some of the content!
Previously our children’s guides were issued dependent on a child’s age, however going forward, we wanted to recognize that there is no ‘one size fits all’ when it comes to children and young people, and therefore wanted to equip the children in our care with additional information or ‘extras’ we feel would be useful for them, appropriate to their level of understanding.
In addition to our new interactive cards, each child or young person will now receive a non-branded welcome bag which containing a pack of the our playing cards, a wallet containing information for important contacts, a notepad and a weekly planner with dry wipe pen. In addition to this, our children and young people will also be issued with leaflets appropriate for them. These additional extras, along with the ‘Ace in the Pack’ playing cards, will make up our brand new children’s guide which will be issued to all our children and young people in early 2018.
Once again we would really like to thank everyone involved in this project including Paul & Max at C&T, Callum and Adam and the staff closely involved in this project, Jayne Figgett, Shelley Candlin, Emma Higgs and Connie Ingles.
We hope you are all as excited about the new guides as we are and we hope that our children will enjoy using them as they play their way through important information!
The Foster Care Co-operative (FCC) will be working with Shaping Our Lives and the University of Worcester on some groundbreaking research - looking at what barriers potentially stop disabled people from becoming foster carers, and how these barriers could be overcome.
Gail Granger, one of FCC’s social workers based in the Midlands, is lending her experience to the project in order to provide an ‘industry perspective’ and an ‘employer’s voice’. This will support Dr Peter Unwin, Principal Lecturer in Social Work at the University of Worcester, and the research he has initiated.
The research, entitled ‘Mutual Benefits: the potential of disabled people as foster carers’, will be funded by a grant from the DRILL programme (Disability Research on Independent Living and Learning) – which is a £5 million research programme funded by the National Lottery.
It is very important that the fostering task should be as inclusive as possible. Not only does this enable more people to become carers, but it also provides diverse carer-to-child matching options when looking to provide children with a home. In theory, the better the match, the more stable the placement should be.
Other than some very wide criteria and a full assessment and checking process, the main requirement for becoming a foster carer is to be able to care for children in your home. If this criteria can be met, there shouldn’t be any reason why a person can’t become a carer – no matter what disability they may have.
Ian Brazier, executive director of FCC, said: ‘Matching the needs of every child we look after is the fundamental requirement for successful fostering. Every child is different and the diversity of their needs can only be properly matched if we have a wide diversity of carers willing to take on this challenging but rewarding task.’
FCC are very much looking forward to the results of this research, along with how any barriers to disabled people becoming foster carers can be overcome. They are also extremely proud of Gail for lending her expertise to this ground-breaking piece of research.
You can read more about the research here.
Thousands of new foster carers are required each year in order to care for vulnerable children. If you are thinking about becoming a foster carer or you have some questions about fostering eligibility, you can call FCC on 0800 0856 538 or message them here.
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