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A new report on adoption services in England by think tank Policy Exchange has found that upwards of 1,000 children a year are living in foster care unnecessarily because local authorities are failing to work closely with voluntary adoption agencies.
Despite the number of children being found adoptive parents falling in recent years, councils have turned away from using voluntary adoption agencies to find permanent placements for children.
The report claims that main reason for the decline in use of voluntary adoption agencies is a misconception over the true cost of using them to successfully place a child. Whilst there is a one-off cost of £35,340 to fund a successful placement through a voluntary agency, the annual cost of funding a child in foster care is £25,000. However, independent charitable adoption agencies are particularly adept at finding adoptive parents for children who are more difficult to place.
Research conducted for the report found that 66% of voluntary adoption agencies have reported a decrease in services purchased by local authorities and 40% say that their future financial viability is in jeopardy.
One such agency is the Manchester Adoption Society who announced in December that it is to close its doors at the end of February due to insufficient funding.
Local authorities who run their budgets on an annual basis find the additional upfront cost prohibitive. Policy Exchange says that some authorities leave a child 'looked after' until the beginning of the next financial year rather than use a voluntary agency placement due to the impact on their annual budget.
James Groves, research fellow at Policy Exchange and report author said: "Whilst foster care can provide stability in a child's life it is surely better that a long-term outcome involving adoptive parents is found as quickly as possible for any young person in care.
"That some local luthorities are not making better use of voluntary adoption agencies, who have a proven track record of finding families for hard to place children, is difficult to comprehend".
The report recommends that a variable fee should be introduced with a lower inter-agency fee applying to those cases deemed easier to place, eg single white children under the age of four, and a higher fee for those cases deemed more difficult to place, eg an ethnic minority child older than four years of age.
The think tanks is also calling on local authorities to move away from funding adoption services annually and instead took a five year view to remove the problem of the high upfront costs.
"Doing this will allow councils to look at adoption service providers other than themselves and ensure fewer children have to stay unnecessarily in foster care," Mr Groves added.