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Financial stability, cost charge and value for money in the children's residential care market

Research report

This project “Financial stability, cost charge and value for money in the children's residential care market” was commissioned by the Department for Education (DfE) in November 2014. It was awarded to the Institute of Public Care at Oxford Brookes (IPC) working in partnership with Revolution Consulting and due for completion by mid-February 2015.

The primary aim of the research was to “…improve our understanding of the children’s residential care market, both on the detailed financial stability of the main operators in the market and also a more detailed operational cost model, and to provide options for how to improve the functioning of the market. We need to understand how stable the market is, how to monitor, manage and influence it and understand the true costs (and their drivers) of residential care provision to provide national benchmarks for Local Authorities”. There were then a series of additional aims as described in Appendix 1 of this report.

We were not asked to cover the secure children’s homes market as defined by section 25 of the Children Act 1989.

From the original planning meeting with representatives of the DfE, IPC outlined a timetable of activities for achieving the aims of the project. The activities included:

• Interviews (Providers, Investors, Commissioners, Regional Consortia, Other key stakeholders)
• Focus groups with provider organisations
• A survey of homes (now replaced by a series of telephone interviews)
• Development of a benchmarking model
• Development of the final report, project management & other activities

In addition, we have reviewed a range of sources relevant to markets in public care and to the children’s residential care market in particular. These include; previous research reports relevant to the market, publicly available financial information and credit reports relating to the larger providers, data sources such as the 903 and the 251 return and the Children’s Homes Data Pack.