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A picture of a system under strain emerged as a wide-ranging inquiry into children's social care got under way.But it is also a system in flux, adapting to meet new challenges insisted two directors from the Department for Education as they appeared before the House of Lords' Public Services Committee this week.Helen Waite, director of system and strategy at the DfE, made a frank admission that ‘outcomes are not good enough at the moment' and a ‘journey of improvement' was in progress.Director of help, protection and social work, Shazia Hussain, said part of the reason was that the nature of the threats to children has changed, with more risk of extrafamilial harm from grooming gangs, county lines, and online: ‘The sorts of things we are dealing with we haven't really had to deal with [in the past].'She added: ‘Children are presenting at a much older age as a result of prevention spending over the last 10 to 15 declining because local authorities sought to protect their statutory spend.'Much work is now focused on improving prevention, with £2.4bn of ringfenced funding. Waite told the committee: ‘We saw local authorities whose preventative service had all but frankly disappeared.‘Ringfencing is something that fell away in the past. That's something that has been welcomed broadly by directors of children's services who have struggled in more recent years to hold funding for the prevention end of the system.'This required some ‘dual running' to ‘build prevention and bend the curve on outcomes'.She said 10 pathfinders were brining together social care with health services and the police to provide a multi-agency response.The experience of care leavers was a key concern for the committee. Baroness Watkins said she was ‘very concerned and shocked' to find a third of care leavers were homeless just two years after leaving care.Waite conceded ‘we see a lot of variation in the way housing teams in local authorities interact with care leaver teams' and that ‘there's more to do there'.The department is rolling out a programme called ‘staying close' providing supported housing and wrap-around care that will ultimately be rolled out to every local authority. So far it has been tested in 47 which had led the department to ‘refine expectations' and Waite said they were ‘in the foothills of learning'.Regional care cooperatives featured heavily in the session and Waite acknowledged ‘we are expecting a lot from them'.Two have already been established in Greater Manchester and the South East of England, with five more announced earlier this year in Cheshire and Merseyside, London, the North East, and in the East and the West Midlands, covering 100 councils.Bringing together local authorities, health and justice services, they are designed to plan and commission homes and support for looked-after children in an effort to bring costs down.Waite said part of their work would include assessments of sufficiency and reviewing of individual costs of placements, which could help inform whether caps on profits should be enacted.‘It's very, very challenging for the department to work out what a right level of profit is in this space,' she told peers. ‘We haven't got the richness of data on those high-cost placements.'Part of the challenge is that a number are private equity-owned, making it difficult to trace where funds end up.‘There's a risk that as soon as we start chasing profit, we're chasing our tails around people's accountants and how money can be moved around.'Waite said they also had to exercise caution due to the ‘fragility of the market' and the risk that providers ‘disappear'.There were divisions among the committee members over the issue of councils resorting to using unregistered children's homes where there are no registered providers available.The practice has been outlawed by central government, and the watchdog Ofsted announced in the summer a shift in its approach under which local authorities could see their rating downgraded to requiring ‘urgent improvement'.Lord Barber said: ‘We can't have a situation where the state funds something which it knows to be illegal and doesn't even provide any quality assurance.‘We are allowing directors or children's services to commit an illegal act every time they do that.'But Baroness Watkins countered: ‘I assume no director of children's services is sitting there wanting to use an unregistered children's home, it's when you are faced with the position in an evening you haven't got an alternative and so at that moment in time it is the best option for the child.'Waite also pointed out that occasionally providers were providing good quality services, but were awaiting registration.‘There can be some very specific circumstance where it is still the right thing to do. The importance there is making sure it gets registered as soon as possible,' she said.

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CHILDREN'S SERVICES

Children's social care inquiry reveals system strain and reform

By Martin Ford | 16 October 2026

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