November 28, 2019 Finance

Hazlewoods reviews children’s residential care services in England

Hazlewoods specialist Health and Care business advisers and accountants has conducted a review of data obtained from local authorities in England offering an insight into children’s residential care services, fee rates and the pressures that the services face.

WHAT WERE THE HEADLINES?

• Average weekly rates across the regions ranged between £3,600 and just over £4,000 and, rather surprisingly, the North East region came out on top whilst the South East region was lowest. At £3,734, London is perhaps lower than might be expected.

The recent LaingBuisson Children’s Services UK Market Report notes a clear shift from ‘in area’ to ‘out of area’ placements in recent years, with 43% of looked after children in residential care being placed outside of the relevant council area at 31 March 2018, reflecting a shortage of suitable places in the locality..

FEE INCREASES

• Almost three-quarters of responding local authorities reported no increase in fee rates year-on-year, with just 25 reporting a fee increase of up to 5%.

LOOKED AFTER CHILDREN

• Across the West Midlands, 85% of looked after children are supported by independent providers, with the next highest region being Yorkshire & Humber at 71%.

The LaingBuisson report notes a strong upward trend in the volume of homes (rather than places) in the last two years as many independent sector providers have expanded to meet higher demand.

OPPORTUNITIES TO EXPAND

The data received does appear to indicate a certain level of traction as far as rate increases are concerned. However, considered against the ever-increasing cost pressures resulting from wage inflation, pensions and regulatory fees, it generally suggests a continued squeeze on provider margins in the majority of locations.

The trend for reductions in the number of available places within local authority settings looks set to continue. This, coupled with the dual pressures of an expanding population and increasing levels of intervention by local authorities, offers opportunities for independent providers to expand provision. Those providers who have the flexibility to expand and innovate to meet those demands, whilst at the same time achieving scale and cost efficiencies, will thrive.
For more information on our review or to discuss your children’s services and how we can help contact Rachel Anstee on Rachel.anstee@hazlewoods.co.uk or 01242 237661.

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We speak up for the independent sector. All news articles are published by editor Viv Shepherd.

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