Regulator and directors' body warn of risks to provision for children in care should any of bigger providers go bust, but provider leader says foster carers would simply move agency ensuring continuity Ofsted and children’s services directors have warned of the risks to fostering provision caused by the degree of market concentration after the regulator revealed two companies accounted for one-third of independent placements. In a report today, Ofsted said that half of independent fostering agency (IFA) placements in England were managed by six providers. It said the Outcomes First Group, whose fostering arm is known as National Fostering Group (formerly the NFA Group), and Nutrius UK, whose fostering service is known as Polaris, accounted for 31% of IFA placements between them. As of March 2019, 35% of children in foster care were placed through IFAs. The news prompted concerns that the degree of market concentration created risks should any of the big providers fail, at a time of insufficiency of supply overall. ‘Storing up trouble’ “Demand for children’s social care services continues to outstrip supply, and the need for placements for the most vulnerable children is only likely to rise in the wake of Covid-19,” said Yvette Stanley, Ofsted’s national director for social care.” “The domination of the fostering market by a small number of operators creates an additional concern that the loss of any of the bigger providers could leave major gaps in supply. We worry that the narrowing of the market on top of the sufficiency issue is storing up trouble for the future.” Edwina Grant, chair of the ADCS health, care and additional needs policy committee, echoed Stanley’s concerns about the overall lack of foster carers, adding: “Children’s services have long operated in a mixed economy with a range of providers involved in the delivery of children’s services locally, however, we are concerned that the trend towards consolidation and the concentration of placements in the hands of a small number of providers represents a level of risk in the system, should any of these providers fail no single local authority could step in meaning vulnerable children would suffer the greatest consequences.” However, this was rejected by National Association of Fostering Providers (NAFP) chief executive Harvey Gallagher, who said: “The loss of a large provider does not equate to leaving a ‘major gap in supply’. Foster carers are self-employed and could transfer to another IFA or local authority fostering agency, thereby re-establishing that placement with another provider. This happens on occasion now when agencies change ownership and is managed smoothly with little, if any, disruption for children.” Market concentration The figures mark the culmination of significantly increased concentration in the IFA market in recent years. The government-commissioned review of foster care, carried out by Martin Narey and Mark Owers, that reported in February 2018 said that larger IFAs had grown by 7.7% per year over the previous five years, from both organic growth and the acquisition of smaller providers. Over the subsequent two years, the biggest provider, then known as the NFA Group, continued to grow, acquiring Child Care Bureau, Brighter Futures Foster Care, Reach-Out Care and familyplacement.com. It then joined with special school and children’s home provider Outcomes First Group in December 2019, with the latter taking the company name with the fostering arm rebadged as National Fostering Group. It now accounts for 6,304 places across 21 separate IFAs, 17% of the 36,890 places offered by independent agencies. The second biggest provider, Polaris (part of Nutrius), was formed by the 2019 merger of the Core Assets Group and Partnerships in Children’s Services, bringing together 26 IFAs under one roof, including Foster Care Associates, Orange Grove and ISP. It now accounts for 14% of IFA places. The Narey and Owers report raised concerns about the debt burden carried by IFAs run by large providers, as a result of their ownership by private equity firms, saying they made agencies vulnerable to increases in interest rates and led to higher prices because of the need to service debts. High performance However, the Ofsted report showed high performance by IFAs run by the biggest six providers, with 29% rated outstanding and 69% good, compared with 16% outstanding and 75% good for other IFAs. Responding to the figures, NAFP head Gallagher highlighted the strong performance as demonstrating that size was not detrimental to quality. He added that the separate IFAs run by large providers were distinct from each other and, given that services were commissioned locally, not nationally, the key issue was whether there was adequate supply and choice for local authorities. Gallagher also said that the numbers quoted by Ofsted referred to the total number of children foster carers were approved to care for, not the numbers living in households and, in reality, the total capacity was not available because of the need to match children to carers. He also referred to the number of investigations carried out by regulator the Competition and Markets Authority into IFA mergers and acquisitions as demonstrating there was oversight of the market to ensure adequate competition. Source: www.communitycare.co.uk Comments are closed.
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