Opportunities and Risks: Practice Models for Commissioning Foster Care

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Opportunities and Risks Practice Models for
Commissioning Foster Care

• Dr Clive Sellick
• University of East Anglia, Norwich

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Practice Models

• Spot Purchasing
• the purchasing of placements and related
  services, often without planning, and at short
  notice including emergencies
• Outsourcing
• the transfer from public authorities of
  responsibility for all or most of their foster
  care provision to non governmental agencies both
  private and voluntary
• Relational Contracting
• agreements between LA and IFP to purchase and
  provide fostering services

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Spot Purchasing 1

• does not allow IFPs to estimate likely demand or
  local authorities to predict cost.
• It effectively prohibits both the local authority
  commissioners and the independent providers from
  planning or matching their respective needs and
  services.
• this method takes little account of the
  individual needs of children or the particular
  strengths of their prospective foster carers.

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Spot Purchasing 2

• the use of spot purchasing as a major
  distributive mechanism merely reflects the fact
  that children are slotted in wherever there is a
  vacancy with little opportunity for matching or
  choice
• Petrie, S and Wilson, K (1999) Towards the
  disintegration of child welfare services. Social
  Policy and Administration 33, 2, 181-196.

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Outsourcing 1

• Public sector agency commissioners from central
  and local government and private and voluntary
  sector providers each know the type, volume and
  cost of services to be purchased and provided.

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Outsourcing 2

• encourages the establishment of a few, large
  agencies which successfully manipulate and
  monopolise the market and, related to this, the
  range and diversity of services are reduced

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International Research 1

• A study of the impact of outsourcing out of home
  care, including fostering placements for children
  and young people in the state of South Australia
  
• Barber, J (2002) Competitive Tendering and
  Out-of-Home Care for Children The South
  Australian Experience. Children and Youth
  Services Review 24, 3, pp 159-174.
• Barber, J and Delfabbro, P (2004) Children in
  Foster Care Routledge London

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Two major consequences

• The establishment and supremacy of a few provider
  agencies, often large, which monopolised the
  market and drove out smaller welfare agencies
• Effect undermined a strength of the NGO sector
  by reducing the range and diversity of services

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Consequence 2

• 2. Tight and competitive contractual
  arrangements imposed by public authorities
  discouraged NGOs from pioneering new developments
  and innovations
• Effect reduced the non-governmental sector to
  agents of the state (Barber and Delfabbro,
  200457)

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International Research 2

• Evaluations of the impact of outsourcing child
  welfare, including fostering services, in the
  State of Kansas.
• McCarthy-Snyder, N and Allen, M (2003) Managing
  the uneasy partnership between government and
  nonprofits lessons from the Kansas child welfare
  privatization initiative. Presentation at the
  25th Annual Research Conference of the
  Association for Public Policy Analysis and
  Management. Washington DC 6 November 2003.
• Unruh, J and Hodgkin, D (2004) The role of
  contract design in privatization of child welfare
  services the Kansas experience. Children and
  Youth Services Review 26, 771-783.

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Two consequences

• once contracts are let, the supplier becomes a
  monopolist for a long enough period of time that
  other nonprofits can be eliminated from
  effectively competing for future bids
• in most areas the services delivered are less,
  not more, diverse (McCarthy-Snyder Allen,
  200328)

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UK experience

• while the larger agencies within the sector,
  such as Barnardos and NCH, have the strength,
  financial power and wisdom to retain adequate
  space for innovative projects, smaller agencies
  are becoming increasingly preoccupied with
  meeting their contract specifications, with
  little room for manoeuvre. For these agencies,
  the barriers to entry into the welfare market
  have been removed, but the option of exit from
  the market has also been removed from their
  control. The result may be stifled growth and
  lack of innovation. (Giltinan, D,200255, Child
  care at the end of the millennium, in M. Hill
  (ed) Shaping Childcare Practice in Scotland,
  London, BAAF.).

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The status of IFPs

• 2001, 80 of IFPs registered as voluntary, not
  for profit agencies
• 2006, 253 agencies were registered as IFPs in
  England 33 were old IFPs, 28 of these had
  registered as voluntary, not for profit,
  organisations. 220 were new IFPs and of these
  206 were registered as private, for profit,
  organisations

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The Foster Care Market

• There is now a substantial internal market of
  private sector fostering agencies in England
  competing with one another for local authority
  placement contracts.

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PriceWaterhouseCoopers (200625) Childrens
Homes and Fostering

• The largest IFA players are FCA, NFA, SWIIS and
  Pathway Care, but --- there are many small local
  providers. Voluntary providers also form part of
  this market place, although there are fewer
  voluntary players registered

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Relational Contracting Arrangements

• The establishment of small networks of local
  authorities and IFPs was commonly seen as the
  most effective framework for commissioning from
  the respondents in this study. Although mostly
  regional, these networks might include some more
  distant IFPs where local authorities required
  long-term or very specialist placements. Such
  networks of agencies allow local authorities and
  IFPs to contract with two or three partner
  agencies. This would go some way to avoiding the
  risks of monopolies identified in the American
  and Australian studies. Within each network,
  commissioned services would be identified and
  planned and include the full range of fostering
  placements according to local need
• (Sellick, C, 2006, Opportunities and risks
  models of good practice in commissioning foster
  care. British Journal of Social Work, Volume
  36, Number, 8 pp 1345-1359)

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Internal Commissioning

• All of the case study authorities use in-house
  services as first choice (PWC, 200647)
• Recommends (p.56)
• Institutional separation of commissioning and
  in-house provision
• Separation of owner and provider functions for
  in-house provision

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The Future Mutualism

• The flowers of fig trees are pollinated by small
  black wasps whose larvae feeds on the fruit
  without the wasps, the figs could not reproduce,
  and so would die out, and without the figs, the
  wasps could neither reproduce nor feed (p. 331).
  

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or Monopolies?

• Are some agencies becoming a kind of ivy on the
  face of fostering or a leylandi which grows so
  fast and casts the shadow that causes so much
  suburban strife?
• Tudge, C, (2005107)The secret life of trees.

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Certainties

• Fostering is no longer an almost exclusively
  public sector activity
• The mixed economy of foster care provision is
  driven by a political and professional consensus
• NGO sector is characterised by private IFPs
  including a few very large agencies

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Uncertainties

• Will internal commissioning remain the first
  resort of LAs?
• As external commissioning expands at what point
  might this become outsourcing?
• Will regional commissioning regulate the market
  in terms of eg maximum size and minimum numbers
  of IFPs?