Diversification of Children's Social Care Market - Preliminary Market Engagement (PME) Notice (updated 20 October 2025)

Please note: This PME amendment does not signify the commencement of any procurement process and does not constitute any commitment by the Department for Education (DfE). If DfE decides to commence any procurement process subject to the Procurement Act 2023 as contemplated by this notice, a separate notice(s) will be published at the relevant time. This Notice has also been appended to Find a Grant.

The Purpose A Preliminary Market Engagement event has been undertaken to refine DfE's requirements and better understand the capacity and capability of potential partners to deliver a Social Investment Vehicle (SIV) to facilitate the entry of new providers into the children's social care placements market, particularly to increase the number of foster care placements. We refer to any future potential partner as a "Social Investment Facilitator" (SIF). The Department's initial thinking was that the purpose of the SIV would be to blend public and social finance to enable capital investment in new or re-entering regulated providers.

We are sending this clarification document to ensure that the market is clear that the Department is interested in exploring how a SIF could be used to support the reform of the children's social care placements market, and as part of that how a SIF could support the recruitment and retention of foster carers. Thank you to those who have participated in the first event, the presentation and Q&A is available for any entrants who wish to join the ongoing market engagement at this time. The DfE is exploring options as to how it can make best use of public funding to reform the children's social care market to ensure that children's needs are being met at a sustainable cost.

A route DfE is considering is a proposed new model of investment which would enable us to work alongside social investors. This would enable us to diversify the market by investing in new local authority, charity or other third sector provision where it is most needed, allowing government investment to leverage a greater overall budget. Funding model options and eligibility Organisations interested in acting as SIF should note that the DfE is still exploring options for the contractual funding model (whether under a grant or public contract), should the DfE decide to proceed with the project.

It is therefore not yet clear whether this pre-market engagement will require further notices on the central digital platform or not, but PME is voluntarily being conducted in accordance with the Procurement Act 2023 in the event that it should later be deemed to apply. Within the last year, DfE has undertaken a range of desk-based research into potential funding models which would help us achieve our goals, as well as engaging with the DfE's Market Interventions Advisory Group. As a result of a range of informal conversations with several operators in the social investment sector, the Department is considering a model involving the creation of a Children's Social Care Social Investment Vehicle (CSC SIV) and would like to share the considerations to date with a wider market.

Under this model, DfE would engage a SIF to administer the CSC SIV which would then contribute funding on their own account and secure additional funding from social investors. Our ambition is that by working with social investors, we will be able to increase the funding available by a minimum multiplier of 2-4. Eligible organisations, which may include charities and local authorities, could then bid for funding from the CSC SIV to implement policy interventions agreed to likely increase the number of fostering placements in England.

This model could be either national or regional, and will appeal to SIF who can bring in investment to build capacity in the fostering sector and connected spaces.