What year was this written? What characterises an efficient market for children’s homes?

A well-functioning, efficient market has the following properties:

Demand-side

• LAs attempt to maximise the welfare of their looked after children by choosing those care options (fostering/residential care) which best meet their needs
• Assessing options – LAs have the right information about costs, quality and capacity to make informed choices about which provider and package of care to purchase for the children they wish to place in homes
• Commissioning – LAs commission and contract with children’s home providers in a way that minimises costs and maximise outputs
• Quality – LAs are able to monitor outputs and carry out effective contract performance management. LAs are able to enforce compliance (e.g. by financial penalties or ending the contract)

Supply Side

• Diversity of providers – LAs have multiple high-quality providers to choose from within a reasonable distance
• Supply side flexibility – the supply side responds to incentives and there is competition between providers that creates better choice and quality. New providers can open, good ones can expand and bad ones face the threat of closure or takeover
• Children’s home providers are incentivised to provide high quality places