Issue - meetings

Report of Corporate Director for People

Councillor Barnard, Executive Member for Children, Young People and Education, presented the report and stated the following:

a)  the Council has a statutory duty to ensure sufficient accommodation for its looked-after children and young people, which meets their needs in its authority area (section 22G of the Children Act 1989 ‘the sufficiency duty’), balanced against budget commitments and pressures for the Council;

b)  to support this duty, the Council commissions children’s care placements (including residential care homes and foster care) from external agencies through several mechanisms. This includes collaborative framework agreements such as the D2N2 Children in Care Framework (D2N2 CiC Framework) and the East Midlands Regional Framework, block contracting and spot purchasing arrangements;

c)  price reviews for these externally commissioned placements are undertaken annually in line with contract terms and conditions. Due to the current unprecedented economic climate, the annual inflationary increase is expected to exceed that ordinarily applied and is subject to council discretion;

d)  decisions for price increases are based on a range of factors, such as the current market position, cost of living indices and Office of National Statistics data. Specifically, consideration has been given to the National Living Wage and other pressures, such as cost of living, pensions, profit margins and voids. This proposal also considers the MTFP (Medium Term Financial Plan) position and other financial pressures;

e)  under the D2N2 CiC Framework, weekly prices will increase annually, at the discretion of D2N2 by 1.5% or CPI, whichever is the lower. Should CPI rise above 3%, the Contracting Authorities will review the annual increase. The current CPI is 4.2% as of 17 January 2024;

f)  in the Autumn Statement, issued on 22 November, it was confirmed that National Living Wage would increase by 9.77% to £11.44 and that this new rate would also apply to 20 to 23-year-olds (over 11% increase). Energy prices also rose in January 2024 following an increase to the energy price cap;

g)  this proposal is put forwards against a backdrop of increased demands on children's social care, policy change, difficulty in attracting workers into the care sector, due to competition from other sectors, and lack of capacity within the children’s placement market;

h)  nationally, the children’s placement market is functioning inefficiently. A market study (undertaken by the Competition and Markets Authority in 2021/22) reported significant problems in how the placements market functions and made several policy reform recommendations to the Government. Concerns included a lack of placements (of the right kind in the right place) high-profit levels, pricing, and debt within the market’s most significant private providers;

i)  an increase in fee-rates for placement takes effect from April 2024 on the D2N2 CiC framework. Where frameworks are pan-local authority, the Council will engage with those local authorities as required. The D2N2 CiC framework is joint with Derby City, Derbyshire County and Nottinghamshire County Council;

j)  the framework is the primary mechanism for commissioning new placements for children in residential and foster care, with 92% of new fostering placements and  ...  view the full minutes text for item 6