Navigating the expansion of foster care: Risks, opportunities and strategic solutions for local authorities

The UK Government's 'Renewing Fostering' action plan focuses on five priority areas: national scale action to expand fostering, enhanced regional collaboration, innovation to improve outcomes for children, stronger support around fostering families, and a simpler rulebook that puts relationships first. 

There is a lot to welcome in these reforms, but such changes also pose risk, and it is important to approach change projects under the plan with a full understanding of risk and with mitigation strategies, from the outset.

This ambitious plan is backed by £88m over the next two years, including up to £25m of capital spend on the 'Room Makers' programme.

The expansion includes creating regional fostering hubs - accelerating assessment timescales to match adoption standards (six months rather than the current eight), and proposing to remove the requirement for fostering panels.

The challenges facing local authorities

The number of Looked After Children has risen sharply, from 64,460 in 2010 to 81,770 in 2025, levels not seen since the 1980s. Meanwhile, approved mainstream foster carers have steadily declined by around 12%.

This shortage means too many children are placed far from home or in residential care, where they often face struggles in school, health difficulties and even exploitation or exposure to criminal activity. 

Furthermore between 2020-21 and 2024-25, local authority spending on residential care also doubled, reaching £3.7bn. 

Key legal challenges and risks

1. Carer abuse

Among the most significant scandals in care have been those in which children have been abused by the very people appointed to look after them. In foster care this is illustrated by the landmark Supreme Court decision in Armes v Nottinghamshire County Council [2017] UKSC 60.

In Armes, the Supreme Court ruled that a local authority was vicariously liable for abuse committed by foster parents of a child in the 1980s. The Court found that most foster parents have insufficient means to meet substantial awards of damages, and local authorities which engaged them could more easily compensate victims of injuries which are often serious and long lasting.

The Court identified several factors justifying vicarious liability:

• The local authority exercised powers of approval, inspection, supervision and removal without any parallel in ordinary family life, exercising a significant degree of control over both what foster parents did and how they did it. 
• The local authority's placement of children in their care with foster parents created a relationship of authority and trust in circumstances where close control could not be exercised, rendering children particularly vulnerable to abuse. 
• Foster parents could not be regarded as carrying on an independent business of their own; the torts committed were in the course of an activity carried on for the benefit of the local authority. 

The risk in context of expansion

The pressure to rapidly approve 10,000 additional foster care places creates potential heightened liability exposure. The government proposes to accelerate assessment timescales and remove fostering panels. These are reforms aimed at efficiency but they must be carefully managed to avoid compromising safeguarding rigour.

If assessments are rushed or insufficiently thorough, this could risk harm to the very children we are trying to protect. Local authorities might also face:

• Substantial compensation claims under vicarious liability principles.
• Reputational damage affecting recruitment and public confidence.
• Regulatory intervention from Ofsted and potential safeguarding investigations.
• Increased insurance premiums as the risk profile changes.

2. Assessment and approval

If the Armes decision is about the responsibility of the local authority for its foster carers, then other cases demonstrate the need for authorities to be rigorous in their processes for assessment and approval. Local authorities also face potential direct liability for negligent assessment and approval processes.

Key risks include:

• Inadequate vetting: Failure to conduct thorough background checks, including criminal records, employment history, and personal references.
• Insufficient assessment of suitability: The government's drive to dispel "myths" about who can foster must not lead to inadequate scrutiny of genuine risk factors.
• Poor record-keeping: Inadequate documentation of decision-making processes, particularly important if panel oversight is removed.
• Failure to act on warning signs: Information emerging during assessment or monitoring that should trigger further investigation.

The consultation proposes removing the requirement to use panels in the approval process, with Agency Decision Makers held to account for decisions through strengthened guidance and standards, with effective quality assurance embedded within the assessment itself.

This shift places greater responsibility on individual decision-makers, and requires robust governance frameworks to ensure accountability and consistency. It also requires decision makers to be exceptional risk managers, with the ability to understand positive and negative risks, and weigh the benefits offered by a more diverse range of carers, including keeping children closer to families and neighbourhoods, against any associated risks.

3. Diversification, discrimination and Equality Act compliance

The government's action plan explicitly aims to dispel common myths that discourage potential foster carers, including misconceptions about smoking, pets, relationship status, home ownership, disability, age, criminal records and driving requirements.

Whilst broadening the pool of potential carers is positive, local authorities must ensure that:

• Genuine risk factors are properly assessed: Distinguishing between discriminatory assumptions and legitimate safeguarding concerns.
• Reasonable adjustments are considered: For disabled applicants under Equality Act duties.
• Decision-making is transparent and defensible: Particularly where applicants are rejected despite not meeting traditional "barrier" criteria.
• Consistency is maintained: Avoiding arbitrary decisions that could give rise to discrimination claims.

4. Regional collaboration and data sharing risks

The expansion of regional fostering hubs to encompass end-to-end assessment, approval and ongoing support represents a fundamental shift in service delivery. Regional Care Cooperatives (RCCs) are being developed to strengthen how care is planned, commissioned and created, supported by £10.8 m investment over the next two years.

This regionalisation creates legal complexities:

• Data protection compliance: Sharing personal and sensitive information across multiple local authorities.
• Contractual arrangements: Defining responsibilities, liabilities and indemnities between participating authorities.
• Governance structures: Ensuring clear accountability when functions are pooled.
• Performance management: The Department for Education will introduce a new performance framework with the intention that hubs are clear on expectations and accountable for outcomes.
• Safeguarding responsibilities: Safeguarding processes must be crystal clear on where responsibilities lie. While safeguarding children is everyone’s business, and collaboration can be a strength, uncertainty as to responsibilities risks children being missed or responses that are inadequate. 

5. Financial pressures and resource allocation

Local authority spending on children in care has grown by 69% over the last decade in real terms. A lack of foster carers worsens local authorities' financial sustainability and limits investment in supporting children and families.

The pressure to expand fostering whilst managing constrained budgets creates potential risks, and Council’s should beware of:

• Insufficient investment in assessment capacity: Leading to corners being cut.
• Inadequate support services: Increasing placement breakdown rates or leading to harm due to under-supporter or under resourced placements. 
• Over-reliance on independent fostering agencies: IFAs now provide 45% of mainstream fostering households and 48% of filled places.
• Competition for experienced staff: High turnover undermining relationship continuity.

Strategic opportunities for risk management

Understanding these challenges is the foundation from which to identify opportunities for local authorities to improve outcomes, strengthen their legal position and build operational resilience through proactive measures.

1. Robust assessment frameworks

The removal of mandatory panels should be accompanied by strengthened assessment protocols:

• Comprehensive assessment tools: Evidence-based frameworks that ensure consistency.
• Enhanced training for assessors: Particularly in recognising complex safeguarding indicators.
• Quality assurance mechanisms: Multi-layered review processes even without formal panels.
• Clear decision-making criteria: Transparent standards that can withstand scrutiny.

How can your lawyers help? Legal advice can help design assessment frameworks that are both efficient and legally defensible, incorporating up-to-date case law and regulatory guidance.

2. Strengthened governance and accountability

With Agency Decision Makers held accountable for decisions through strengthened guidance and standards, robust governance becomes critical:

• Documented decision-making: Clear audit trails for all approval decisions.
• Regular governance reviews: Oversight committees monitoring quality and consistency.
• Risk registers: Proactive identification and management of systemic risks.
• Learning from incidents: Structured processes for reviewing placement breakdowns and allegations.

How can your lawyers help? Establishing governance frameworks that satisfy regulatory requirements whilst enabling efficient decision-making, with clear escalation protocols for complex cases.

3. Enhanced monitoring and support systems

The plan commits £8.9m in 2026-27 to deliver over 100 new Mockingbird constellations, and will develop an enhanced training and support offer from 2027-28.

Local authorities should:

• Implement relationship-based supervision: Evidence shows that end-to-end support models where one experienced social worker supports foster carers from initial enquiry through to post-approval achieve 100% retention rates. 
• Develop peer support networks: Reducing isolation and building community resilience.
• Strengthen allegations processes: Clearer distinctions between allegations and standards of care.
• Invest in therapeutic support: Specialist services to prevent placement breakdown.

4. Regional collaboration agreements

Regional fostering hubs will form an important stepping stone as Regional Care Cooperatives are built, with some RCCs running fostering hubs directly whilst others may have a small number of hubs underneath them.

Effective regional working requires:

• Clear memoranda of understanding: Defining roles, responsibilities and liabilities.
• Data sharing agreements: GDPR-compliant frameworks for information exchange.
• Joint commissioning arrangements: Transparent procurement and contracting.
• Dispute resolution mechanisms: Processes for managing disagreements between authorities.
• Insurance and indemnity provisions: Clarity on liability apportionment.

How can your lawyers help? Drafting and negotiating regional partnership agreements that protect individual authorities whilst enabling collaborative working.

5. Proactive policy development

The government is publishing consultations on fostering reform and launching calls for evidence on innovative practice and regulatory changes.

Local authorities should:

• Engage actively in consultations: Influencing policy development to reflect operational realities.
• Update internal policies proactively: Anticipating regulatory changes rather than reacting.
• Develop innovative models: The £12.4m innovation programme will support development and testing of innovative ways of caring. 
• Review financial frameworks: The Fostering Network calls for urgent financial reform, including council. tax exemption for all foster carers and introduction of a national fee framework. 

6. Insurance and financial risk management

Given the vicarious liability exposure established in Armes, local authorities should:

• Review insurance coverage: Ensuring adequate protection for historic and future claims.
• Consider self-insurance mechanisms: Regional risk-pooling arrangements.
• Implement robust financial controls: Budgeting for the true cost of quality fostering services.
• Monitor cost-benefit analysis: Foster care generally produces better outcomes than residential care at significantly lower cost. 

Key takeaways for local authorities 

Audit your assessment processes before panels are removed

The shift to Agency Decision Maker accountability requires robust internal review mechanisms to replace the safeguarding function panels currently provide. Ensure your frameworks are documented, evidence-based, and legally defensible - particularly in light of the vicarious liability exposure confirmed in Armes.

Get regional collaboration agreements right from the outset

Memoranda of understanding, data sharing agreements, and clear indemnity provisions are not administrative formalities - they are your primary protection when functions and liabilities are pooled across authorities. Poorly drafted arrangements create significant legal risk.

Treat carer support as a liability management tool

Relationship-based, end-to-end support models demonstrably improve retention and reduce placement breakdown. Investing in support structures is not just good practice - it directly reduces your legal and financial exposure.

Review your vicarious liability and insurance position now

As carer numbers grow and assessments accelerate, liability exposure increases. Review your insurance coverage, explore regional risk-pooling arrangements, and ensure your financial planning reflects the true cost of quality fostering services.

Engage with reform consultations proactively

Authorities that engage early can influence policy and anticipate regulatory change rather than react to it. Update internal policies ahead of the new framework - particularly around assessment standards, equality compliance, and data sharing.

Conclusion: Turning challenge into opportunity

The government's pledge to create 10,000 new foster care places by 2029 represents both the most significant expansion of fostering in decades.  Its a crucial opportunity to improve outcomes for vulnerable children. For local authorities, this ambition presents genuine legal and operational challenges.  With proactive risk management and strategic legal support, these challenges can be successfully navigated.

The legal landscape is complex: liability for foster carer wrongdoing is now well-established, assessment processes are being accelerated, regional collaboration is expanding, and regulatory frameworks are being fundamentally reformed. However, this period of change also creates opportunities to strengthen governance, enhance safeguarding, and build more resilient systems.

Local authority legal teams may wish to augment their capacity with specialist expertise, additional resources during peak periods, and independent perspectives that strengthen decision-making. Specialist legal expertise augments your team's capacity and helps you navigate this crucial period of reform successfully.