Geopolitical shocks in the Gulf directly disrupt children’s social care – what to do?

The military and political activities affect children’s social care by accelerating inflation, squeezing council budgets, and compounding the systemic challenges targeted by the Department for Education (DfE) “Home Again” vision and Regional Care Cooperatives (RCCs).

When military activity destabilises global shipping lanes, the economic ripples force local authorities, providers and carers to re-strategise how they fund and deliver stable placements.

The following analytical breakdown below connects these macro-global events to local care delivery frameworks.

1. Impact on the DfE “Home Again” Strategy

The DfE “Home Again” initiative focuses on keeping children in their (extended) family and local communities whilst also reducing Residential Child Care placements.

• Foster Carer Financial Attrition: Rising fuel and utility costs, driven by energy market instability, shrink the real value of foster care allowances. This has potential to price out existing and future foster families, especially from lower incomes, undermining the strategy’s reliance on a robust, local network of foster homes.

• Stalled Local Infrastructure: “Home Again” relies on developing community-based residential properties, either large fostering (Space Makers) or children’s homes. Volatile capital and material costs mean providers of all ownerships may struggle to buy or refurbish local homes within existing budgets.
• Overstretched Edge-of-Care Services: As global economic pressure drives up domestic poverty, family breakdowns escalate. Early intervention budgets are swallowed by emergency crisis management, making preventative interventions harder to sustain.

2. Impact on Regional Care Cooperative (RCC) Thinking

RCCs are designed to aggregate council buying power, to reduce or eliminate profit by private providers, and plan care placements regionally. A tense geopolitical climate alters their implementation strategy:

• Enforced Fiscal Collectivism: With individual councils facing severe budget deficits, the incentive to launch RCCs shifts from what has been presented and promoted by DfE as an ideological best practice model to an economic survival mechanism. Pooling resources may become the only way to bargain with large private care providers.
• Risk-Sharing Against Volatility: RCCs must now incorporate macroeconomic forecasting into their commission strategies. High inflation requires local authorities to create flexible, inflation-indexed contracts with independent providers to prevent sudden provider closures. In the current conjuncture the RCCs rationale needs to be rethought.
• Capital Market Hesitancy: RCCs rely on borrowing by providers or blended funding (government + local authority) models to establish new care settings.  High interest rates, sustained by central banks to combat geopolitical inflation, make the capital investments needed to launch assets significantly more expensive whether by local authorities, voluntary organisations, or private providers.

3. Strategic Recommendations for Social Care Leaders

To safeguard children’s services against ongoing international volatility, regional pathfinders and DfE policymakers must adapt:

National action needed

• Inflation-Proof Foster Allowances: Dynamically peg foster care allowances to real-time fuel indexes to prevent placement breakdowns.
• Pause Regional Care Cooperatives: the terrain is too volatile to progress. Evaluations of the efficacy and efficiency the 2 pilots have not been made known. A completely new situation is confronting children’s social care. Is this better met by regional administrational or local relational means? If RCCs are to be taken forwards a new prospectus is required to be devised, proposed and risk modelled. There is not the time for this to be done to the appropriate level of analysis and reflection.

Sub-regional and local

• Implement Commissioning Clusters using ‘soft blocks’: Following on from (2) local authorities should immediately form micro-clusters to jointly agree the priority multiple co-occurring high level in interacting of needs and purchase soft block-booked residential beds. The use of block contracts and soft block contracts remains at relatively low levels compared to the various forms of spot purchasing (both within and outside of formally procured arrangements) Revolution Consulting. Soft blocks by increasing relational working derisk, through a considered analysis of the key elements of existing commercial contract terms, it is possible to devise a new form of contract that shares occupancy risk between partners and achieves pricing and commercial arrangements that benefit both parties to the contract.

           See Softblock_contracts_NAFP_Aug19.pdf

• Prioritise Repurposing: Use capital grants to acquire and retrofit existing domestic housing.

2 practical ways forwards through the influential factor of occupancy

The most influential factor on financial efficiency across the sector is the utilisation or occupancy rate of a service, and the sustainability and predictability of that factor.

Public sector approaches that harness the potential to risk share in this area are rare but offer valuable insight into how to go about managing the shared risks. (see Publications – Revolution Consulting)

Soft blocks

“Soft block” contracting has significant potential to at least redeem the current situation and potentially provide the foundation for a transformation through a change in values and to an ethic of relational working together to confront a common agonism rather than to battle in antagonisms of the transactional market mechanism.

There is little rationale for continuing with individual local authorities competing for placements or for multiple regional frameworks that all attempt to deliver similar objectives.

Whilst there is much to be gained from a national, regional, sub-regional and local analysis of need and supply we do not have the granular data needed for this planning, nor do we have the infrastructure to do so (the current tender for the Assessment of Need tool and platform do not get to this place).

Whilst the spot market will need to continue to operate the move to a widescale use of soft block contracts has potential to hold the sector through the current crisis situation.

Use the Kraljic matrix.

Essential tool for regional planning Residential Child Care placements – Kraljic matrix – NCERCC

Not all needs and provision require the same level of engagement. A Kraljic Matrix is useful to categorise suppliers as Strategic, Bottleneck, Leverage, or Non-critical based on profit, impact and supply risk.

In the context of children’s homes procurement, a Kraljic Matrix segments services based on

• Supply Risk (scarcity, quality, regulatory compliance)
• Business Impact (financial cost and impact on child outcomes).

NCERCC Kraljic Matrix for Children’s Homes (2026)

Category	Supply Risk	Business Impact	Examples in Children’s Care	Strategic Approach
Strategic Items	High	High	Specialist therapeutic homes, secure units, or homes for complex medical/disability needs.	Partnerships: Long-term strategic alliances and joint ventures with providers to guarantee capacity.
Bottleneck Items	High	Low	Niche therapeutic training, emergency crisis transport, or highly specialised 1:1 staffing agencies.	Supply Continuity: Secure volume and maintain stocks; look for alternative models to reduce dependency.
Leverage Items	Low	High	Standard residential care placements (mainstream), large-scale regional frameworks.	Exploit Purchasing Power: Use competitive tendering and framework agreements to drive value and quality.