Council looking at in-house children’s homes as cost of private care soars

Blackpool Council is looking into alternative models of residential care for children in the face of the “unsustainable” £21 million a year costs of private care provision.

A scrutiny review has been launched to look into the possibility of the council developing an in-house provision of a residential care home in Blackpool.

The investigation comes against the background of a worrying escalation in the cost to the council of placing children in privately-run care homes.

It emerged that Blackpool Council is currently spending approximately £290,000 per year for each child in private residential care.

With 74 children currently in such placements, these costs account for 55 percent of Blackpool Council’s spending on children in care despite representing only 14 percent of the total children in care population.

The council accepts it cannot afford to meet costs currently running at £21,460,000 a year.

A scrutiny report was prepared by Cllr Dave Flanagan, Chair of the Children’s Residential Care Homes Scrutiny Review and the recommendations were approved at this week’s Executive Committee of the council.

Cllr Flanagan later said: “The most important priority is delivering the right standard of care for these children, which is what we are looking into.

“However, the current cost of private residential care in Blackpool is unsustainable and we are looking into the options of a number of different models.

“As part of that we are also taking a look at what other councils are doing. Rotherham has gone from having no council-run facilities to having 12, so we are looking closely at what they do.

“The obvious preference is to keep children in family environments, be it their own families or foster families, but that is not always possible.

“We need more foster families in Blackpool and we are looking at ways to offer greater support for foster families. The foster care service is doing an excellent job but obviously we would like more families.

“In the meantime we are exploring all the options, including models for offering in-house provision.”

Cllr Flanagan’s report highlighted that, nationally, there has been a shift in thinking about residential care provision, with many local authorities now reconsidering their previous decisions to outsource this function entirely.

Cllr Flanagan said in his report: “The financial sustainability of the current model is increasingly questioned, with private placement costs having risen by approximately 40 per cent over the past 5-6 years, well above inflation rates.

“This Scrutiny Review considered existing models for delivering residential children’s care homes that could be adopted, drawing on evidence from other local authorities and general research.

“With Blackpool Council currently facing significant financial pressures from private residential care costs, there is a strong incentive to consider alternative delivery models.”

What are the recommendations?

The Executive is to commission an audit of individual providers who act on Blackpool Council’s behalf, which could also include insufficiency of national regulation driving the increase in prices and whether there is any associated profiteering by private companies. An update report is due by April 2026.

The council is to place higher priority on the recruitment of Foster Carers including giving consideration to greater prominence on the website, through use of email signatures and advertising in and around Council buildings.

The Executive will request the Director of Children’s Services to undertake a reappraisal of the support and allowance available to Foster Carers.

The Executive will now commission the production of a detailed financial models for Children’s Residential Care Home provision.

Scenarios include the following options:

*Building ownership and management by the council.

*The building being owned by the council, but the care home operated by a private company (including bringing existing inactive registered children’s homes back into use);

*A children’s Home owned by the Local Authority but operated by a not-for-profit company (including bringing existing inactive registered Children’s Homes back into use).

Once the modelling has been completed, the Cabinet Member for Children’s Services will be requested to consider the findings in consultation with the Children and Young People’s Scrutiny Committee prior to making a decision based on costings.