Outsourcing and children's social care services: an observational longitudinal analysis of inspection outcomes among English children's homes and local authorities

Background:
Most children’s social care services in England are operated by for-profit companies, but the implications of this development are not well understood. We aimed to evaluate the associations between for-profit outsourcing and quality of service provision among local authorities and children’s home providers in England, UK.

Methods
We did an observational longitudinal analysis of inspection outcomes among English children’s homes and local authorities. We created and analysed a novel, longitudinal dataset of inspections from Ofsted (ie, the independent regulator of children’s social care in England) over a period of 7 years (2014–21; n=13 452). We also analysed the association between Ofsted local authority ratings (n=147) and the use of for-profit outsourcing.

Findings
We found that for-profit children’s home providers are significantly more likely to be rated of lower quality than both public and third sector services across all provider level Ofsted inspection domains. For example, for-profit providers have 33∙7% lower odds (odds ratio [OR] 0∙663; 95% CI 0∙522–0∙842) than local authority providers of being rated “Outstanding”, “Good”, or “Requires Improvement”, as opposed to “Inadequate” in the main “Overall Experiences” Ofsted category. For-profit services also violate more legal requirements (OR 0∙380 [95% CI 0∙186–0∙575]) and receive more recommendations (0∙391 [0∙242–0∙540]) than local authority providers. These findings are robust
to model specification and consistent over the full analysed period. Further, we found provisional evidence that local authority Ofsted ratings are negatively correlated with the percentage of for-profit outsourcing, suggesting that poorly
performing local authorities tend to outsource a greater amount of their services than well performing local authorities.

Interpretation
Our findings are of considerable concern given the focus of these services on society’s most vulnerable service users. However, caution is needed in terms of regulating the sector going forward, as the role of for-profit providers cannot be replaced without substantial coordination and long-term planning.