Outsourcing: government advisors finesse child protection 'sales pitch'

The government's aspirations to kickstart a market in child protection services and make it easier for councils to outsource safeguarding functions continue apace.

The Guardian can reveal that ministerial advisors presented detailed proposals to firms and charities last month at a private Whitehall meeting described by one attendee as a "sales pitch".

The proposals, which would radically shake up children's social services in England, put flesh on the bone of Coalition plans floated in the summer to inject "competition and contestability" into one of the last areas of local government not subject to market forces.

They include the creation of new bodies independent of council control which would run children's social services across a local area and hold powers to outsource key functions to private firms and charities. These include sensitive decisions such as whether to take children away from their parents.

The bodies - known as "newcos" - would be one of a series of measures designed to accelerate the growth of an independent child protection sector and ease the removal from local authority control of social services departments deemed by Ofsted to be failing.

Councils would also be encouraged to adopt the new structures voluntarily.

The measures were outlined to an audience of private outsourcing companies including Virgin Care, and Amey, as well as management consultants, not-for-profit organisations and smaller specialist children services firms at a seminar held at the Department for Education (DfE) in September.

The meeting, which featured an appearance by the children's minister Edward Timpson, discussed DfE-commissioned research carried out by private sector health analysts LaingBuisson to "identify barriers to market entry for investors" and assess "potential for new opportunities for the provision of social care services."

Around 90 delegates attended the day-long seminar, although some of the biggest outsourcing companies and consultancies such as Capita, and KPMG, were absent. One attendee described it to the Guardian as:

a sales pitch for privatising core children's social work activity

The proposals, which would accelerate existing moves to reform children's services, will be contained in a report due to be presented to ministers in November. One insider told the Guardian:

This is radically different to existing outsourcing. This is crown jewels stuff.

Proponents say reforms are urgently needed as more council child protection departments struggle. Rising demand for children's social services, coupled with shrinking budgets and widespread difficulties hiring and retaining social workers means councils will struggle to cope unless new approaches are pursued, they argue.

Alan Wood, director of children's services in Hackney, and a DfE advisor, told the Guardian the proposals were about encouraging innovation, rather than crude cost-cutting or profiteering. This was vital to address pressures on children's services:

If we carry on doing what we do in the way we do it, we just get the same, only there will be less of it.

However, critics say there is no evidence that outsourcing drives improvement or innovation, and they fear that the marketisation of child protection will fragment services and lead to a corrosion of public accountability.

Ray Jones, professor of social work at Kingston University, said:

Whether children are removed from their families should be seen as a decision taken on behalf of the state by means which are publicly accountable. The danger of opening this up to commercial markets is that accountability is lost locally and nationally we lose sight of the safety of children.

A backlash against former education secretary Michael Gove's initial proposals to privatise child protection earlier in the summer forced a climbdown by ministers, who said that no outsourced provider would be allowed to make direct profits from safeguarding work.

The children's minister repeated this in an interview with the Guardian today, saying:

Whether it's a direct or indirect potential to make profit, that is what has been ruled out

However, new regulations make clear that private companies will be able to circumvent these rules by creating non-profit subsidiaries which then sell services back to their profit-making owners (see paragraph 7.4 here). Although the Labour Party raised concerns over this at committee stage it decided not to vote against the regulations.

The DFE is understood to be privately concerned that at least 10 struggling council children's departments could face official intervention, following on from well-publicised failures in Doncaster, Birmingham, and Slough. It believes many of England's 152 children's services do not have sufficient in-house expertise or staff capacity to drive through improvement plans.

The report is likely to recommend the creation of a list of approved "intervention leaders" - highly paid senior managers who would be parachuted in to overhaul failing departments and oversee their reconstitution as "newcos" outside the day-to-day control of the council.

Another mooted idea is the establishment of a national children's commissioning board, answerable to the education secretary, which would oversee the expansion of a market in children's social services and provide advice and support to councils which want to outsource safeguarding functions voluntarily.

The seminar was addressed by Wood, and fellow senior DfE advisor, the LSE professor and former Labour advisor Julian Le Grand, as well as senior Whitehall officials. It was chaired by the former Labour health minister Lord Warner, who is overseeing the turn-around of Birmingham children's services on behalf of the government.

Warner told the Guardian the proposed measures were a practical response to official concerns about the performance and resillience of children's departments. He said:

This is not some ideological right-wing enterprise

The "newco" idea builds on the independent trust model designed to provide children's safeguarding services in Doncaster following a string of child protection failures. The not-for-profit Doncaster children's trust, which takes the day to day running of safeguarding services out of council control went live at the beginning of October.

A DfE spoksperson said the LaingBusisson report's findings would help "widen the options" available both to local authorities interested in seeking new "partnerships" to improve services and to ministers when they intervene in failing local authorities.

We have commissioned a study to gain a better understanding of the provision of children's social care services and explore the potential for developing capacity and increasing diversity of provision. That study has not yet reported and no decisions have been made about its findings.

Delegates at the seminar were given a presentation outlining the experiences of other countries which had outsourced children's social services, including in the US, Australia and New Zealand. However, none is believed to have privatised core decision-making functions involving the investigation and care of at-risk children.

One attendee told the Guardian it was unclear from the meeting what appetite for outsourced child protection work there is from private providers. They are likely to demand to be given so-called "light touch" contracts which give them flexibility to meet performance targets while ensuring the local authority is held accountable in the event of a child protection tragedy.