Major review released: NSW Government’s roadmap to reform foster care

2 December 2024

The Minns Labor Government is today marking an important milestone in its reform of the foster care system with the release of a landmark report that calls for sweeping changes.

The ‘System review into out-of-home care,’ commissioned by the Minister for Families and Communities, Kate Washington MP, examined the outsourced foster care system, and investigated how taxpayer money is being spent by non-government providers.

The report found that the $2 billion out-of-home care (OOHC) system, created under the former coalition government, is:

• not fit for purpose and fails to meet the needs of children and young people at an efficient cost
• characterised by a profound lack of accountability and ineffective oversight
• overly complex, fragmented, and slow to respond in the best interests of children and young people
• largely devoid of robust evidence-based practices

The review’s authors were often unable to follow the dollar to determine if taxpayer funds were being used to meaningfully support vulnerable children and young people.

The final report provides a roadmap for rebuilding system accountability and oversight; improving contractual and financial management; collaborating with and elevating the voices of children, families and carers; and building a stronger workforce.

The 13 recommendations include: 

• ceasing the current practice of outsourcing case management to non-government providers before final orders are made by the Children’s Court
• mandating greater financial transparency between OOHC providers and foster carers (including relative and kinship carers), so that carers are aware of the significant taxpayer funding being provided to their case management agency
• requiring OOHC providers to clearly identify the direct services and supports provided to children and young people as a result of taxpayer funding
• boosting accountability in the outsourced sector through key performance indicators, comparative analyses, and regular financial and performance audits
• ensuring all OOHC placement types are evidence-informed, reducing the reliance on HighCost Emergency Arrangements (HCEAs) 

The review was commissioned following a harrowing report by the Advocate for Children and Young People that details the first-hand experiences of the state’s most vulnerable young people in emergency accommodation.

This type of accommodation can cost upwards of $2 million a year for each child, costing taxpayers more than $38,000 a week.

The system review was led by former Assistant Commissioner with NSW Police, Gelina Talbot, and former executive director of the Department of Communities and Justice, Lauren Dean.

Their report sets out a blueprint for change and provides important insights into a system that often fails to meet the needs of children and young people.

While considering the report in its entirety, the NSW Government is already getting on with the job of implementing many of the recommendations, including:

• Announcing a total ban on Alternative Care Arrangements (ACAs) by March 2025
• Reducing the number of children placed in ACAs by 81 per cent since November 2023, down to just 27 children
• Reducing the number of children placed in all types of HCEAs by 33 per cent since November 2023
• Opening the Waratah Care Cottages to better support children and sibling groups who are currently stuck in HCEAs
• Implementing Active Efforts legislation, meaning DCJ must do everything practical to ensure children are safe and connected to their family, culture and community; as well as undertake extensive family finding processes if a child is removed
• Finding safe homes for 849 children by commencing recruitment of more than 200 emergency foster carers after the former government stopped recruiting
• Signing an historic deal to increase caseworker pay to attract and retain more caseworkers
• Increasing workforce capability by redeploying casework specialists back to the frontline, so more families are seen by highly skilled caseworkers 

The NSW Government acknowledges the important contributions of the hundreds of stakeholders, caseworkers, foster carers, families, and children and young people whose valuable contributions made this report possible.

The NSW Government is closely reviewing the findings and recommendations of the report and will formally respond in the coming months.

Read the ‘System review into out-of-home-care.’

Minister for Families and Communities and Minister for Disability Inclusion, Kate Washington said:

“I thank Gelina Talbot and Lauren Dean for their clear and decisive report that lays out a significant roadmap for reform.

“The Minns Labor Government has been open and honest about the spiralling out-of-home care system we inherited. Now we have the evidence and the recommendations we need to start turning the ship around so that vulnerable children and young people get the supports they need.

“It’s shocking that some out-of-home care providers are failing to provide basic supports to children, despite being paid hundreds of thousands, and in some cases, millions, of taxpayer dollars to do so.

“Right now, we know taxpayer money is not always flowing to the children who need it.

“As a government, we are committed to ensuring every dollar invested in the child protection system goes to the vulnerable children who need it.

“Over the past 18 months, the Minns Labor Government has been stabilising the system, now we will begin rebuilding the foundations so that we can invest in better outcomes.

“We have a lot of work ahead of us to ensure increased accountability and transparency translates to better outcomes for children and young people.