“What can be more important than the children in the State’s care?” | Big Society Capital

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“What can be more important than the children in the State’s care?”

This was a comment on social media recently following the cancellation of a fostering round table with government attention unsurprisingly elsewhere.

It also could have been the strapline to the Independent Children’s Homes Association AGM in Birmingham that day, where I provided an overview on social investment.

This group of providers delivering residential children’s care services was different to the usual audience of charities and social enterprises that I speak to – of around 50 providers, two were charities and one was a social enterprise set up as a CIC. Apart from at least one very large private sector provider, the rest were small privately owned organisations, for example family businesses or set up by experienced local authority staff or health services staff who’ve set up homes perceiving the necessity to provide specialist, supplemental or alternative resource. Some of them had already accessed commercial investment in their set up and development, but were unfamiliar with social investment. 

I wanted to find out more about residential care and whether this was an area where social investment could help create positive impact. My layperson’s general assumption was that residential care for a child was usually used as a last resort.  However, this was challenged after hearing more, and seeingthe motivation from providers to achieve impact for a group of children and young people who are likely to have been let down on multiple fronts.

For example:

  • Stability of placement was key to positive outcomes – some children may have experienced as many as 30-40 fostering failures before entering residential care, and could have benefitted from an earlier stable residential placement.
  • For some children, residential homes may offer the best care to meet their needs, which are likely to include challenging behaviour and mental health difficulties, not always diagnosed at referral. The best homes offer the warmth and connection of a family setting that mean that children are happy and thrive.
  • Ofsted emphasised that educational outcomes for children in care were better than children in need (for example due to abuse or neglect)
  • Commitment from several providers to support the young people through the transition to adulthood, including maintaining connections to their home, help with employment, independent living, and to secure accommodation.This longer term support didn’t seem to be commissioned usually but seems critical, particularly given the evidence points to care leavers being more likely to be homeless and end up in the criminal justice system.

Coincidentally, Sir Martin Narey’s independent review of residential care in England was launched the following week highlighting these issues. We know that there are many challenges facing providers including more children in care, greater complexity of cases, pressure on local authorities’ budgets and  inconsistent quality of commissioning.

One of his recommendations encourages a return/expansion of delivery in residential care by voluntary sector providers. If a barrier to this is access to capital, social investment could clearly have a role to play alongside initiatives by the Department for Education  and others.

How might social investment be relevant for these providers?

  • Investment for property – for example, setting up children’s homes or setting up educational settings.
  • Investment to grow other income streams – for example one charity (Break) discussed their use of charity shops and plans to run a café in which young people could be involved . This enabled them to generate funds to put into areas outside their core provision (for example Moving On support post 16).
  • Providing cash flow support for payments by results services – the criticisms of PBR are likely to be heightened in this sector – for example the risk of perverse incentives that avoid focus on those most in need, or difficulties in attribution for interventions involving multiple agencies to deliver better long term outcomes. However there are opportunities to use social investment to deliver better outcomes for this group of children, which could be supported through outcomes payments from the Life Chances Fund launched by the government recently.
  • Investment to preserve social impact as the “business” grows – some of the providers were interested in how the social impact of a business that is perhaps family run could be preserved as their organisation develops or the founder leaves. Involving social investors could help enhance their ability to deliver both social impact and financial sustainability.
  • Evidencing outcomes to the regulator meaningfully seemed to be a key challenge – there is work underway within this sector, but perhaps some of the approaches used in the voluntary sector or by social investors could be useful and relevant.

The potential opportunities to explore a more “social” approach to finance and investment seemed to resonate with a number of providers and their values, and it’ll be interesting to see how these discussions progress.

We often have theoretical impact discussions around evaluating “breadth vs depth” of impact in our work to develop use of capital to tackle social issues. Enabling delivery of better life chances for a group of children and young people probably in greatest need of support could be one of the most profound uses of social investment that we could see.

Last updated | 
20 July 2016