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The “dysfunctional” children’s social services market needs an overhaul to cope with high prices, scarce placements and levels of provider debt, the competition watchdog has said.

After a year-long review, the Competition and Markets Authority (CMA) has called for the creation of national and regional bodies to help councils find the right placements for children, get better value -price for taxpayers and to reduce out-of-zone benefits.

In the final report of its study into the UK’s foster care, children’s homes and unregulated accommodation markets, the CMA also called for action to tackle the high levels of indebtedness of some providers, especially those funded by private capital.

He proposed the creation of a financial monitoring regime – similar to that of large adult social care providers – to alert to the potential failure of hard-to-replace services.

He also called for options to be explored to bring placement services in-house.

Although the government is likely to wait for the report of the Independent Child Welfare Review – due in late spring – before deciding which of the CMA’s recommendations to follow, it has already pledged action to reform the market. in order to fight against high prices and placement. scarcity.

Head of Care Review Josh MacAlister also said he would recommend significant changes to the investment market, including to manage profit levels, and he would consider recommendations from the CMA.

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