The third edition of LaingBuisson’s authoritative Children’s Services report has been published.

The market for children and young people’s services in the UK is growing and was valued at £14.1 billion in 2016. This covers special education, fostering, adoption, children’s residential care, safeguarding, guardianship and other services which look after some of the most vulnerable people in our society. Social care services for children and young people are valued at £9.9 billion and special education services (including special schools and colleges) accounted for £4.2 billion.

2015/16 saw the first real term increase in children’s social care services spending since 2010, with a rise of 1.6% though this was against a backdrop of very low economy inflation. Previous years had seen a contraction with spending flat-lining after an initial acute fall in the early part of the Coalition government. Going forward, continued fiscal austerity looms over children’s services budgets once again, and the 2017 Autumn Statement may offer some clarity on the government’s fiscal direction following the 2017 election result.

Pressures on the care system for children and young people are clear cut. The number of children which are being looked after in care in the UK continues to grow (up 1.1% in 2015/16), child protection plans increased by 1.2% to reach record levels, and care applications coming to court remain very high. At the same time, the number of adoptions in England and Wales has fallen sharply recently, despite heavy investment and promotion of permanent care solutions by the Coalition government in preceding years.

LaingBuisson’s report highlights progressive changes that are likely needed to deliver children’s services more efficiently and effectively to elicit improvements in outcomes and manage higher demand under tight spending budgets. More volume based commissioning to offer price discounts for local authorities (as advocated by the Narey review of residential children’s homes) is predicted, along with contracts which encourage the delivery of high quality outcomes for children and young people.

Moreover, the scale and maturity of the sector is making it increasingly attractive to investors, who have in turn invested capital and gained comfort with the challenge of getting it right for each looked after child in the face of limited funding, high levels of regulation and a politically sensitive market.

Report author, Philip Blackburn said:

“In the current economic and fiscal climate, children’s services and special education providers which can deliver high quality services and value for money are well placed to meet the needs of commissioners in the sector. Certainly, the commissioning and provider landscapes appear to be developing to support larger-scale preferred provider contracting, and away from variable spot purchasing.

“At the same time, early intervention to reduce the need for care and improve outcomes for children and families remains a vital policy area as pressures on the care system remain high, and deserves a high priority for funding from central and local government.”