Why relationships are the future of children’s commissioning

As sufficiency challenges persist, local authorities are increasingly recognising the value of building strong, trusting relationships with providers. Ben Rosie argues that relationships are helping to shape a new future for children’s services.

In the face of rising demand, limited placement availability, and increasing reliance on spot purchasing, local authorities (LAs) are under immense pressure to ensure there is sufficient and suitable accommodation for looked-after children.  

Too often placements are unsuitable to meet existing need or breakdown after a short period resulting in poor outcomes for children in care. This is not to mention the cost of residential placements, which are putting intense pressure on council budgets.  

Many authorities in England approach placements as a procurement exercise, this makes placements a zero-sum game, creating adversarial and distrustful relationships between authorities and providers.  

The lack of trust means providers often frontload contracts to circumvent the issue of uplifts or breakdowns, costs increase for LAs and placements breakdown for children. When this happens, everyone misses out. Children don’t receive the care they need, council budgets become stretched, and providers don’t achieve stability. 

To remedy this issue, commissioners must transition from a focus on procurement to relationships. Last year, Mutual Ventures was commissioned by the Department for Education to explore local authority forecasting, commissioning and market shaping in the children’s care placement market. Through this research, we identified several key solutions to this problem. Authorities have two powerful, connected, approaches to begin to move in the right direct - market shaping and strategic partnerships. These aren’t just technical tools, they are strategic imperatives for creating stronger, long term, trusting relationships between providers and authorities. 

Market Shaping: From Passive Procurement to Strategic Influence 

Too often, purchasing decisions are reactive, driven by immediate availability rather than long-term planning. Market shaping is about more than just issuing contracts. It’s a proactive, relational process where LAs work with providers to communicate expectations, build trust through on-going dialogue and relationship building, and co-create a care market that meets the needs of children. At its core, market shaping is about sending the right signals to the market, not just through procurement, but through consistent engagement, transparency, and collaboration. With better communication, providers can invest in the right kind of placements. 

The key steps to effective market shaping involves: 

• Developing a deep understanding of local demand and supply, using robust data and predictive analytics. 

• Creating and sharing dynamic sufficiency and market position statements, so providers can align their growth plans with local needs. 

• Engaging providers regularly and meaningfully, through forums, one-to-one meetings, and feedback loops that build mutual understanding. 

When done well, market shaping has the potential to improve placement stability, enhances provider planning, and leads to better outcomes for children. It also helps LAs move from a transactional model to one grounded in relational commissioning, where providers are seen not just as vendors, but as partners in delivering care. 

Strategic Partnerships: The Future of Commissioning for Complex Needs 

While market shaping sets the stage, strategic partnerships are the next act. These deeper collaborations between LAs and providers go beyond traditional contracts. They involve shared goals, joint investment, and a commitment to long-term outcomes. 

For children with complex needs, who often require bespoke, wraparound support, strategic partnerships are not just helpful, they are essential. These arrangements allow LAs and providers to pool resources, share risk, and co-design services that are tailored, stable, and cost-effective. These partnerships can give authorities much needed sufficiency where they need it the most. 

Strategic partnerships is a broad term and we heard multiple different examples during our research: 

• Preferential placement agreements, giving LAs first refusal on placements. 

• Leasing arrangements, where LAs provide properties for providers to operate children’s homes. 

• Joint ventures and system-wide partnerships, such as Somerset’s Homes and Horizons programme, which integrates residential care, fostering, and education through a 10-year partnership with health and voluntary sector partners. 

These models have shown real impact: increased placement sufficiency, reduced placement breakdowns, and improved outcomes for children. But perhaps most importantly, they foster trust. When providers are treated as strategic allies, not just service deliverers, they are more likely to invest in quality, innovate, and stay committed for the long haul. 

Strategic partnerships also offer a powerful counterbalance to concerns about provider profiteering. Strategic partnerships are an opportunity for authorities to align with small providers who have shared values, to use open book accounting to create transparency on costs, and to collaborate with providers to manage void placements and other issues which may arise. 

By doing this, authorities can build long-term, trusting relationships and create conditions where providers are incentivised to prioritise quality and stability over short-term gain and to prioritise relationships with authorities. 

Achieving sufficiency in children’s placements isn’t just about finding more beds. It’s about reshaping the market and rethinking relationships. Market shaping and strategic partnerships are not silver bullets, but they are essential tools for any commissioner serious about improving outcomes for children. 

By investing in relationships, building trust, and committing to long-term collaboration, local authorities can create a placement market that is not only more efficient, but that also better serves the most vulnerable in society.  

If you'd like to talk more about this, please contact Ben.Rosie@mutualventures.co.uk