Public Audit Committee

Meeting date: Wednesday, September 22, 2010

Official Report 316KB pdf

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Section 23 Report

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“Getting it right for children in residential care”

Our second item of business is a section 23 report entitled “Getting it right for children in residential care”. We are to receive a briefing on the report from the Auditor General for Scotland.

Good morning, convener. With your agreement, I ask Barbara Hurst to introduce the report.

The report was published earlier this month and is a joint report for the Auditor General and the Accounts Commission. Residential care for children is a complex service area and no one is arguing that it is easy to get it right. Nevertheless, we absolutely need to get it right for some of the most vulnerable children in our communities.

There are more than 15,000 looked-after children in Scotland, most of whom are supervised while living at home with their families, friends or foster carers. However, around 1,600 children are in residential care at any one time. Exhibit 1 on page 6 of the main report provides a full picture of where looked-after children live. Councils spend around £250 million a year on residential placements for young people, which is equivalent to an average of around £150,000 per child. However, it is generally recognised that the outcomes for those young people are poor and that more needs to be done to improve them. At the same time, the costs have been rising well beyond the rate of inflation and councils are finding it increasingly difficult to keep expenditure within budget.

I will highlight four key issues that are raised in the report. The first of those is outcomes, which is arguably the most important issue. Although some looked-after children do very well and go on to lead successful lives, looked-after children—including those in residential care—are much more likely than other children and young people to be homeless, serve time in prison or have mental health problems as adults. Many do not achieve the same educational standards as other children and do not go on to further education, training or employment when they leave school.

Given that background, it is crucial to have a care plan for each child in residential care that sets out both short-term and long-term outcomes for them. We found that although care plans generally set out the short-term need for interventions to ensure that children are safe, more focus needs to be given to longer-term outcomes. Getting that balance right will ensure that the right actions and decisions that affect young people are taken.

In 2008, the Scottish Government produced guidance on corporate parenting. Corporate parenting is, in essence, about what any good parent would want for their children—a safe, caring and stable environment; high aspirations; and support to achieve. The latest—admittedly very old—data show that nearly a third of children who are looked after away from home are moved three or four more times, which is not the most stable of situations for those children. We note in the report that six councils have highlighted that as an area for improvement.

Crucially, we found that councils are still in the early stages of implementing their corporate parenting approach, so it is too early to say whether that has resulted in any significant achievements.

I move on to planning and commissioning. All but three councils provide some in-house residential care, mostly in residential units. The young people who live in those units attend local schools. All councils commission at least some placements from the independent sector. In total, around 60 per cent of placements are provided by the independent sector; exhibit 2 on page 7 of the main report gives a full breakdown. However, placements with independent sector providers tend to be bought on a spot-purchase basis. We found that contractual arrangements between councils and independent providers are generally weak. Only three councils have full contracts; some use merely a simple letter to confirm payment arrangements. We do not think that that is good enough.

Councils need to take a more strategic approach to planning and commissioning. They really need to understand the needs of young people in residential care, the services that those young people are likely to require and the costs of different types of services, including their own provision. We found little evidence of councils reviewing services to ensure that the right things are in place for children when they need them. We know that that is difficult, but we still think that more could be done.

The next issue is the cost and quality of services. The number of children in residential care has remained fairly constant over the past few years but, as exhibit 4 on page 8 of the main report shows, expenditure has increased significantly. Much of the growth in spending is down to increasing costs associated with looking after children with greater and more complex needs and to developments in quality standards and staff training. We found that few councils know the full cost of the residential services that they provide. That makes it difficult for councils to make value-for-money or best-value judgments, because they do not have the full comparative information on costs and outcomes. Exhibit 10 on page 19 of the main report provides some information on the quality of residential units, with most units rated good or very good against four Scottish Commission for the Regulation of Care quality standards.

Finally, I turn to the development of a national approach to planning and commissioning. The Scottish Government commissioned the national residential child care initiative, which reported in December last year and is a big step forward. It recommended a national approach to commissioning secure care and other specialist and small-scale services, such as residential care for young people who are at risk of self-harm or have serious mental health problems. A national strategic commissioning group has been set up to take forward some of the more complex commissioning strategies. That is a positive development, but there remains a risk that, unless urgent action is taken on the back of it, councils may continue to develop their own approaches to commissioning, which is inefficient for them and for the providers from whom they commission services.

I will stop there. As always, we are happy to answer any questions that the committee has.

Thank you for your introduction. Members will agree that this is a significant report that contains some extremely serious and important messages about the way in which we deal with some of society’s most vulnerable people.

I refer members to my entry in the register of members’ interests, which indicates that I am a parliamentary adviser to the Autism Treatment Trust. Like other members, I have had experience of dealing with parents of children with challenging issues such as autism and attention deficit hyperactivity disorder who are struggling to get appropriate care. One problem that they continually encounter is extreme reluctance on the part of councils to place children in what might be an appropriate setting, such as residential care, because of the extreme expense of such placements. The report indicates that, on average, residential care costs £150,000 per child per year. When there is pressure on council budgets, it is not surprising that councils are reluctant to go down that road, even where it can be demonstrated that residential care is the best setting for a child.

One serious issue that the report identifies is the lack of proper planning in the commissioning of residential care, to which councils take a rather haphazard approach. What work is being done to improve that process? Is anything happening proactively—through the Convention of Scottish Local Authorities, for example—to iron out the problems that are being identified?

I make it clear for the record that we think that residential care is the right service for some children. Often, the view is taken that all children are better placed in foster care or with their own families, but that is not necessarily the case. Some issues with placements can be destabilising for children.

The national commissioning group should address the commissioning issues that you raise. I ask Cathy MacGregor to give more detail about that group.

The group’s full title is the children’s services national commissioning steering group, and it was established by the Scottish Government and COSLA, working together with independent providers of secure care. The group’s purpose is to take forward the urgent requirement for a national approach to secure care and to consider what other specialist services would benefit from such a national approach. I understand that the group is developing a service specification for secure care and an agreement on a fee structure between providers and those who use the services—councils and the Government.

What is the timescale for the group to complete its work?

I understand that a set of proposals is being consulted on and that a deadline of September was discussed for developing and putting in place the arrangements. I do not know whether that is still the deadline.

That is helpful. Perhaps we can follow that up with the accountable officer.

Do members wish to raise issues?

I have read through the report. The information that Audit Scotland has provided is that we spend about £250 million collectively on residential care. It is therefore worrying that, as paragraph 20 of the key messages document says, no councils

“have service level agreements for their in-house provision.”

Many years on from the Social Work (Scotland) Act 1968, it is astonishing that councils do not have those agreements.

Paragraph 24 of the key messages document concerns the level of money that we spend, and paragraph 20, which I highlighted, deals with the contracts that are agreed. Given that our country is relatively small and that we do not have an overwhelming number of local authorities, in comparison with other parts of the United Kingdom, why can we not pull together services more effectively for probably the most challenging young people, whom we need to support?

We share your concern that little action is being taken in relation to in-house provision to provide a level playing field so that councils can understand the costs of these services. We stress in the report that there is room for councils to work together. You are right that the number of children in the situation that we are discussing is not large. Some smaller councils might not have the resources for some commissioning. We hope that the group about which Cathy MacGregor gave information and our report, in conjunction with other recent publications, will produce some movement, because it is important to get that provision right.

I accept what you say. I was part of an Administration whose policy was to prioritise the meeting of looked-after children’s needs. The third First Minister, Jack McConnell, publicly prioritised looking after children much better in residential care. Cathy Jamieson, who has a background in social work, was involved in that.

Despite the will and commitment at that level, in 2010, Audit Scotland’s report says that a lot of weaknesses still exist, although there are strengths—the quality of staff and of the support that people receive from staff is dominant in the report. Even after what was said at the top of the tree—local authorities would probably have made the same comments—we are here in 2010 with substantial weaknesses. What paradigm shift do we need from here and beyond to make a difference?

10:15

I am not sure that I can answer that in any great detail.

Do a thoughtful response on it, then.

We agree that the pace of change needs to speed up. Everybody knows that, and the messages are not new. We will certainly revisit the issue in due course, but that is not enough. There needs to be a strong commitment. The COSLA group is part of that commitment, but I still think that the pace of change needs to increase.

I echo every word that Barbara Hurst says. As the committee might know, many years ago, I was chief executive of a regional council, so I recognise much of what is in the report. The issue has proven to be one of the most intractable and difficult in service delivery in local government.

Can you explain why that is? I am looking at the budget options facing councils and thinking of the sector. Nobody is rushing to say that the sector must be protected, given the choices that have to be made.

That is a $64,000 question and would be better addressed to local authority representatives and the Scottish Government.

If Barbara Hurst does not mind, I point out that in appendix 3 there is an interesting guide to the enormous amount of activity that has gone on in the area in recent years. Before the getting it right for every child programme came in a few years ago, since the start of the millennium, there has been a great deal of activity. However, there is still a challenge in getting that all to feed through to good commissioning, good-quality care and good assessment of children’s needs on the ground, which is where it really matters.

I want to pick up on the explanation that Cathy MacGregor offered. Is the group to which she referred the same group that is mentioned in paragraph 29 of the key messages document, which tells us that the Scottish Government has set up a strategic implementation group to drive the work forward and consider the issues?

No. That is another group that has been set up. It is called the looked-after children strategic implementation group. The report on the national initiative that was undertaken, which was published at the end of last year, echoes a number of our recommendations. It identifies that many issues for children in residential care apply to all looked-after children and not only to those in residential care. Of course, many children spend time in different types of accommodation. The implementation group was set up by the Scottish Government in, I think, March. It has met once and is due to meet again soon. I understand that its purpose is to drive forward and achieve some of the things that have been talked about and planned, which is why it is called the strategic implementation group—it involves people who can implement some of those things. However, a lot depends on how the group makes things happen. That is where our recommendation about the pace of change comes in—it is important that something happens quickly as a result of the group.

I am encouraged that there are at least two focuses on the outcomes and that we are trying to catch up after some of the tardiness that perhaps occurred in the past.

Will you say a wee bit more about the care commission’s role when it inspects residential premises? The report says that the care commission does not consider outcomes. Does it look mainly at the facilities that are offered rather than the direct services for children and the outcomes?

The care commission inspects against the national care standards. There are standards for different types of accommodation, with three sets for residential care. The care commission considers outcomes in relation to the experiences of individual children. So when it inspects specific facilities or providers, it considers the impact of the provision and service on individual children. However, it is not in a position to inspect the longer-term outcomes. Its inspection regime does not cover longer-term outcomes for looked-after children as a group on issues such as educational achievement.

When a child comes out of one of the residential establishments, surely there has to be an assessment by the local authority. There is bound to be a care plan review at some point, otherwise how do the children ever come back out? I would not like the impression to be given that nothing is happening at that end of the scale to look at children’s experience in these establishments in order to bring them back out into wider society. Surely the local authority undertakes some assessment to achieve that.

Yes. Scotland’s Commissioner for Children and Young People has done some work in this area. The statutory requirements for looking after children take the child up to the age of 16. However, there are discretionary provisions that allow councils to have care plans, to continue to look after children in various forms and to develop their throughcare and aftercare to help them make the transition from being looked after to living independent adult lives. That is not an area that we covered in this report, which was very much about the stay in residential care.

Thank you.

I am not clear from the report who in the Scottish Government—which department—is responsible for this area.

The accountable officer is Leslie Evans, who is responsible for children and families, education—

Which department is that?

It is a directorate, but I cannot remember the exact name of it. Can you, Cathy?

Sarah Smith is the relevant director. I think that it is the children and families part of that directorate. I am just looking—hang on a second.

It is interesting that you do not know. I just wondered whether one of the problems is that it is not clear who is giving the strategic direction at a national level to ensure that some of these problems are being dealt with—or, now that you have produced the report, will be dealt with.

We know that Leslie Evans is the director general with overall accountability.

Is that a man or a woman?

A woman.

Is it within education, social work or health?

It covers all the services that affect children and families, which would include social care and education. Leslie Evans would need to work with the health directorates around the health issues.

To which minister is she responsible?

Oh goodness—who is the minister?

I think that it is Adam Ingram.

This is an excellent report, but I must say that it is one of the most depressing reports that you have ever produced. Some of the key messages are:

“Looked after children are more likely to have negative experiences as adults ... Looked after children do not achieve the same educational standards as others ... Not all receive the help they need to go on and lead successful lives ... Too many children are moved between placements three or more times ... Children in residential care need better access to health services ... Councils need to take more account of children’s views to improve services ... More children need to have their successes recognised ... Better information is needed about what leads to successful outcomes”.

That is a damning indictment of what is being done. As Frank McAveety said, it is many years since the social work act created the framework, but we are still not getting it right.

What will happen now with the report?

To be fair, I think that that is up to us. It is up to us to decide how to take the report forward. Audit Scotland prepares reports and submits them to the committee, and we decide how to take them forward.

What would Barbara Hurst suggest?

We will have a discussion about that later in private. It is probably slightly unfair to ask Audit Scotland staff at this stage. They will have the opportunity to contribute to that discussion later.

They will advise us later.

The one thing that might help the committee’s understanding is the self-assessment checklist for councils that the team prepared—it is in appendix 4. I think that it is fair to say that, in all our significant reports, we try to pull together, with input from experts, what we think a council should be doing to manage its services, or try to manage its services, well—I refer to service delivery and commissioning. No doubt we will follow that up at some stage to see how the checklist has been used in local government. We will not stand by, but the fundamental question of what to do is better addressed to Government and local government.

The questions that have been asked are pertinent.

On page 23 of the report, under the heading “The quality of information available is generally poor”, paragraphs 55 to 58 talk about how the information that councils are working on in order to make best use of the resources that they have is scant or bitty. Proper planning cannot be based on poor information, and, as paragraph 55 says,

“Without reliable information about quality, costs and outcomes, such decisions cannot be made in the best interests of the children concerned and the community more generally.”

From that point of view, I read the rest of the report with a slightly jaundiced eye, on the basis that a decent service cannot possibly be delivered to young people if the information is not available, whatever the reason. As the report says, and as Barbara Hurst said:

“almost all residential places in the independent sector are currently ‘spot purchased’, planned only from the moment that a child is identified as needing a place.”

It is really rather poor to have no predictions. There must be averages that people could use to plan. The situation might vary slightly, but that would mean that provision was still in place.

It all comes back to the poor quality of the information that is available, and it seems that councils, in particular, are unable to operate the system. Paragraph 57 states:

“While councils submitted this data at different times, there is no good reason why 28 councils should provide two different figures for this information.”

It is preposterous that councils should have been operating on that basis for such a long time without addressing the issues. That is something we need to look at.

I think that that was a rhetorical question.

It was, sorry.

If Barbara Hurst would like to respond, she should feel free to do so.

Bill Kidd specifically mentioned the fact that many councils do not know the cost of in-house care. Is the team aware of local authorities doing anything to rectify that problem? On finances, Barbara Hurst said that costs are rising way beyond the rate of inflation. Is there an obvious reason for that?

I will take the second point and then pass over to Cathy MacGregor to answer the first one.

On costs rising faster than the rate of inflation, the story is quite complicated. In the recent past, the trend has been to place children in places other than residential care unless such care is absolutely necessary. The children who are likely to go into residential care are those who have the most needs, and they will be the most expensive to look after because they will need the most support. That is a theme.

Under the national care standards, the care commission has been driving up some of the staff training requirements, staffing ratios and so on. Although there might be sometimes be a case for spot purchasing, because circumstances might arise that cannot be responded to otherwise, commissioners are more likely to be able to develop high-quality services if they work with providers to develop them. It might well be that if commissioners did that and did not rely on spot purchasing, prices could be pulled down a bit and the quality could be improved because providers would have time to invest in training.

Councils are very clear about what they are spending on in-house provision in terms of what they pay the staff and what the direct costs are. However, they are not clear in relation to central services—even those that are provided at the corporate centre. The final recommendation on page 35 of our report is that consideration be given to the use of costing models, which can help. Rather than the 32 councils doing quite a complicated exercise to try to find out exactly what the unit costs are, it might be that models can help them to make assumptions about those things. Councils in England have done some work on that, and in our report we refer to an example of a costing model that councils might look at.

10:30

Is there any indication that local authorities are keen to do that? Is there any enthusiasm for it?

I cannot say that we have seen evidence of great enthusiasm for it, but they are aware of the issue. Many of them are aware that they do not know the unit costs, but some are perhaps not aware that the assumptions or costing approaches that they are using are not particularly accurate.

If I may build on that information, as you will see from the report, one issue is that the numbers of children that we are talking about are very small, particularly in the smaller local authorities and in relation to secure care. If we are to move forward from the spot-purchasing system that is operated at the moment, that will necessarily involve local authorities working in partnership and coming together to provide strategic commissioning capacity. It is fair to say that there is a long way to go before we get to that point.

The independent sector that you mention includes charities and not-for-profit organisations. In fact, I assume that all the service providers are not-for-profit organisations.

There are some private providers of specialist services. For example, there might be small, private provision for children with eating disorders.

But the providers are mainly charities and not-for-profit organisations.

Cathy, do you know the balance?

I do not know the balance. I know that there are more voluntary sector providers than private ones, but there is a significant number of private providers.

Thank you.

We all agree that the report is important. Some of the information is alarming. Overall, is the situation for looked-after children in Scotland getting better or worse? Can you identify a trend?

In terms of the standards that the care commission inspects against, the quality of provision on a day-to-day basis for children in the units is slowly getting better. The issue of the longer-term outcomes is not just a Scottish problem, but is probably a UK-wide one. In a sense, that is the area in which we think that there are serious issues.

I pick up on what Frank McAveety said earlier. If the area is vulnerable to cuts in budgets, what we need is a longer-term view. If children who go through the system are more likely to end up—I do not want to say that all of them do this, because clearly they do not—in prison, homeless or with mental health problems, that has a big cost further down the road.

It is good that the quality standards are improving, but we need a far more strategic look at the issue across the whole service provision—in other words, not just in council provision.

It is very much those outcome issues—the children’s life chances—that I was thinking of when I asked about the trend. It is not for you to put in place the monitoring systems to look at the trend. It is for the Scottish Government to do that. Are those indicators in place? Are we looking at trends over time? Are we looking at whether the situation is deteriorating or improving? I get the sense that it is deteriorating, but are there hard statistics that reflect that in the same way that, each year, we get statistics on the exam results of all pupils in Scotland and we can look at them over time? We can argue about how true and accurate the trends are, but at least we have monitoring in place and we know how the trends are shifting over time. It seems that there is a gap in the area that we are discussing, but I would like to be certain of that.

Trends in exam results are much easier to monitor than trends and outcomes for these children, because of the long timescale.

But that is one trend that is looked at, is it not?

Yes, it is. However, I am not aware of any detailed research on the matter. There is lots of research on the general outcomes for these children, which we quote—

Criminality would be another one.

Yes. Exactly. However, as I say, I am not aware of any detailed research on the matter. Cathy MacGregor knows the details inside out.

There is a difficulty with having longitudinal information about such areas, but I understand that the Scottish Government hopes to ensure that the information that exists and that which is required are considered in the looked-after children strategic implementation group.

There seems to be a major gap. Obviously, we could put the issue to the Scottish Government and the local authorities, which clearly have the front-line responsibility in the area, but I can see no sign of cross-council co-operation on the issue or of its being given great priority or being focused on by our 32 councils.

Paragraph 54 of the report suggests that three councils are working collaboratively to consider the issue and obtain best value from the service. I want to ask about the Stirling Council case study. Is it too early to indicate whether improvements are resulting from that council’s example?

We say in our report that we think that it is too early to do that, and Stirling Council would say that, too. I do not think that it would claim that everything was perfect the first time round, but its review is a major step in the right direction.

I wanted to try to end on a slightly more positive note by looking at the Stirling Council case study. Few councils seem to have a good monitoring programme in place, and councils do not really know what costs are involved. Councils have been asked about the in-house costs. Paragraph 88 of the report states:

“Of those that have tried to work ... out”

the full costs of their own provision,

“many may have underestimated.”

That is a surprise. There were different estimates of overhead costs, which

“ranged from one per cent to 24 per cent of the overall cost”

of provision. It strikes me that we are talking about a small number of authorities in a small country and that there has been a political commitment on the matter at the top of the tree in COSLA and the Government over a number of years, but we are still having difficulties.

It is clear that our cities have the largest number of placed children, and therefore there are cost burdens on them. Obviously, a large number of children are in residential care in Glasgow, but the proportion of looked-after children in residential care there is below the average for Scotland. What are people there trying to do? Are they perhaps a bit more sympathetic?

I cannot give details about Glasgow City Council compared with the other councils, although I noted the lower proportion there.

Perhaps we can follow up on that matter.

Members have no further questions. I thank Barbara Hurst and Cathy MacGregor for helpfully answering our questions. We will have a discussion in private shortly on how to progress matters. There is a great deal in the report that we need to pursue.