RCC Policy Context

To help respond to some of these challenges, the DfE launched the RCC pathfinder programme under the "Stable Homes, Built on Love"(external website)  implementation plan, which stems from Recommendation 5.2 of the Independent Review of Children's Social Care (external website) led by Josh MacAlister in May 2022.

Building on recommendations by the Competition and Markets Authority, and the Independent Review of Children's Social Care (external website), the government will enable local authorities to set up Regional Care Co-operatives (RCCs) (external website) to plan and commission children’s social care places regionally.

The new Government and Department for Education’s November 2024 policy statement, ‘Keeping Children Safe, Helping Families Thrive,’ (external website)  outlines the Government’s continued commitment to roll out Regional Care Cooperatives more widely. Their plan involves legislating to enable groups of local authorities to establish RCCs, ideally in partnership with the health and justice sectors. The broader rollout will be built on the experiences of the Greater Manchester and South East RCC pathfinders, maintaining the same minimum requirements. They expect RCCs to gain economies of scale, to leverage local authorities’ collective buying power, and to improve data analysis and forecasting, all of which will contribute to better services for children looked after.

The new legislation will grant the Government authority to direct local authorities to develop RCCs when necessary (e.g. if LAs are not meeting their own statutory functions effectively) and to intervene if established RCCs do not meet required standards. Additionally, Ofsted and other inspectorates will be empowered to inspect RCCs.

There are over 80,000 looked-after children in England and the number of children with complex needs who require social care has also increased and the gap between placement availability and the needs of children is widening. This has driven an increase in spending on children’s social care. It is estimated that Local Authorities across England had a projected expenditure of £5.4bn on children’s social care placements for 2023/24.

Additionally, we know that children and young people living in complex situations with multiple needs can often be involved with health services, youth justice service and social care services (or some combination thereof), causing pressure on all budgets, including Adults Social Care. There is a huge opportunity for these services to work together, but this is not always an established way of working.

Nationally, around 78% of children’s home places are provided by the private sector. Over the last five years, the private sector’s share of children’s homes in England has risen by 26% while the number of local authority homes has declined by 5%. The voluntary sector market share across Greater Manchester is small and not growing quickly enough.

The staffing situation within children’s homes is becoming increasingly perilous and contributing to the closure of both local authority and private homes. There is a severe shortage of registered children’s home managers nationally, and more junior roles are undesirable due to the lack of career progression on offer.

Simultaneous to demand rising, the market is failing. New children's homes are being built far away from the point of need, meaning that children regularly move more than 20 miles away from their homes. In doing so, they lose connections with friends, school, family and community support, which are all essential to stable, happy and healthy childhoods. The CMA notes that “the largest private providers of placements are making materially higher profits, and charging materially higher prices, than we would expect if this market were functioning effectively (CMA, 2022[1])"

[1] CMA, Children’s social care market study final report England summary 2022 (PDF, 209KB)

The introduction of the RCC comes at a time when latest published outturn figures for local authority revenue expenditure (external website) suggest GM collectively spent at least £820m on children’s social care across 2023/24, including over £450m purely on looked after children. 

The project has established an RCC Board (chaired by the lead CEO and lead DCS for Children’s Sufficiency in GM, and attended by Health, Youth Justice and DfE colleagues) that meets every 6 weeks to review the RCC operations.

Several systemic problems underpin the case for change and the establishment of an RCC in Greater Manchester.

1. Challenging outcomes for children and young people – Children and young people in Greater Manchester face significant challenges, with those in care experiencing increasingly complex, unmet needs. These children often face worse health, educational, and long-term life outcomes. Additionally, many care leavers are struggling with poverty, unstable housing, involvement in the justice system, and mental health issues.
   
   
2. Limited forecasting capabilities – Greater Manchester currently lacks the ability to accurately forecast future needs. There is no unified system for correlating demand, assessing the needs of children and young people, and evaluating the placements that are commissioned. Regional data is often outdated and limited, making it difficult to shape the care market effectively. This has resulted in significant challenges in finding suitable care placement services for children and young people.
   
   
3. Insufficient purchasing power – Local authorities in Greater Manchester face high costs when placing children and young people into care. The lack of collective purchasing power means that authorities are often forced to accept any available option, regardless of its appropriateness for the child. These placements are not only expensive but frequently do not meet the specific needs of the children. Clear and consistent messaging to the market is essential.
   
   
4. High number of out-of-area placements – The majority of children and young people accessing an independent care placement are being placed outside their host local authority area, far from their family networks and support systems. This separation decreases the chances of stable, long-term homes and can have negative emotional and relational impacts on the children.
   
   
5. Shortage of high-quality foster carers – There is a critical shortage of skilled foster carers in Greater Manchester. This shortfall forces more children into residential homes or unregistered care settings, even when such placements are not ideal for their needs. These placements not only have a negative impact on the well-being of the children but also increase financial pressure on local authorities. The aging foster carer population exacerbates the problem, suggesting it will worsen over time.
   
   
6. Rising costs – The cost of providing care and housing for children and young people continues to rise, placing local authorities under increasing financial strain. This has led to ongoing budget overspends.
   
   
7. Inadequate market shaping – Local authorities currently have insufficient influence over the services provided by care providers. As a result, authorities are forced to accept available placements regardless of suitability or cost, perpetuating poor outcomes for children and young people.

Combined, these problems clearly motivate a change from the status quo. There is evidence available at a national level to suggest that consolidating and strengthening a regional approach would help with negating the challenges outlined, including through embedding partnerships across local authorities, health and youth justice to collectively improve outcomes for children looked after.