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Private funders could get payment by results if they keep Norfolk children out of care

PUBLISHED: 15:15 30 October 2017 | UPDATED: 16:40 30 October 2017

Private funders could get payment by results to keep children out of care in Norfolk. Pic: Edmond Terakopian/PA.

Private funders could get payment by results to keep children out of care in Norfolk. Pic: Edmond Terakopian/PA.

Children’s services bosses are to explore whether a privately funded company could cut the number of children in care - on a payment by results basis.

Norfolk County Council is looking to follow a trail blazed in Essex, which was the first council in the UK to commission what is known as a social impact bond.

It would see a subsidiary company formed, which private investors put money into. They would then be paid if the intervention it pays for and contracts succeeds in keeping children out of care.

The council says that could save £7m over five years, while estimating the payment by results would cost £4.2m. Officers said it would bring in investment on an under-pressure service, without risking the council’s own budget.

The Vulnerable Child Social Impact Bond would target 360 children aged eight to 15 over the eight year life of the project who are at the edge of care or are in care, but with a plan to return home that has yet to be realised.

The council would make payments based on the reduction in the number of days spent in care for those children.

Norfolk county councillors today agreed to submit an application to the government for Big Lottery Life Chances Fund (LCF) money for such a scheme.

But Labour’s Emma Corlett said there were “ethical issues” about incentivising the market when it came to social welfare. And she said: “I am really unhappy that outcome is only recorded in terms of reduced days in care. There’s nothing about the outcomes for the children - about their quality of life.”

Matt Dunkley, interim director of children’s services said, although the focus for the provider would be on reducing the number of days in care, the council’s children’s services department would still be monitoring other outcomes for children.

And Conservative Bill Borrett said: “If the best way to deliver the best help to people is a private public partnership, why on earth would we not support it?”

But Ms Corlett questioned why this sort of work could not be done in-house - by the council’s own staff.

Simon George, the council’s director of finance, said: “This will bring another weapon to our arsenal. Our number of looked after children is statistically higher than our neighbouring counties.

“It gives us an opportunity to bring in some external skills and if, at the end of this process, we can take learning on board and do it in-house that would be excellent as well.”

Officers said an evaluation of the £3.1m Essex social impact bond, which involved the charity Action for Children and focused on children on the edge of care, showed innovative practices had been brought in.

A scheme at HMP Peterborough, which aimed to reduce reconvictions of male prisoners, attracted criticism. It had a difficult start, with the first phase of the scheme not reducing reconvictions enough to trigger payments to investors.

But an evaluation report last year concluded it had been a success, although it also said there was “no compelling reason to believe that social impact bond funding on its own fosters innovation”.

Deputy leader Alison Thomas acknowledged there was scepticism about such a move, but said due diligence had been done and that it was worth pursuing for Norfolk.

She said: “It has created quite an impact around the council. Social impact bonds have had some bad press, but there has been a lot of due diligence about this project. This has been a conversation piece for quite some time.

“Our finance director has been quite honest that he was a sceptic to begin with, as was I to a certain extent. But I think it is very exciting.”

Once a decision is made on whether the council can have the LCF cash, then the council’s director of children’s services and chair of the children’s services committee would procure and award a contract.

Norfolk has long battled to reduce the number of children in care. It went up from 1,015 in March 2012 to 1,107 in March 2017 - a rise which exceeds the national trend.

The council is to spend up to £15m between 2018 and 2022 to try to bring down the number of looked after children, with more focus on early intervention to stop children ending up in care.

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