Accountability and transparency: historic reforms to foster care

2 March 2026

The Minns Labor Government is delivering the most significant reforms to out-of-home care in decades, putting accountability and transparency at the heart of a system caring for more than 13,500 vulnerable children in NSW.

Out-of-home care was outsourced by the previous government through the ‘Permanency Support Program’ (PSP) in 2017. A rigorous, three-year evaluation into the program found it has failed to deliver its intended goals, and its costs have far exceeded its benefits.

Internal auditing of all PSP contracts has also found that despite non-government provider funding rising to $1 billion a year in tax-payer funds, actual service provision to children has fallen.

Under the new Out-of-Home Care Strategy, the Minns Labor Government will wind down current PSP contracts, with a phased rebuilding and transformation of the system to be complete by 2030.

Under the new system, the NSW Government will strengthen accountability over non-government providers through improved performance and outcomes measurement, and a zero-tolerance approach to financial mismanagement.

As part of winding down PSP contracts, some existing providers will be exited from the system, and continuing providers will be subject to new transparency measures via contract variations.

Historic investment in Aboriginal Community Controlled Organisations (ACCOs) will continue, with Aboriginal children to be supported by ACCOs where possible, to remain connected to kin, community and culture.

The role of foster carers will also be elevated under the reforms. Government-led foster care recruitment will be supported by new flexibility and choice for carers, allowing foster carers to apply to move between providers if they are not receiving the supports they need and deserve.

Redesigning the out-of-home care system will be progressed in multiple phases, with new foster care and restoration services to begin from 1 July 2028.

Minister for Families and Communities, Kate Washington said:

“The Minns Labor Government is delivering long overdue reform to the foster care system, building in much needed accountability and transparency. There is no place for providers who siphon public funds intended to support vulnerable children.

“Despite significant and rising taxpayer investment, rates of restoration, guardianship and adoption continue to fall. It’s clear the current program has failed to deliver, that’s why we undertaking significant reform.

“Accountability is non-negotiable when it comes to children’s safety and public trust. We are building a new foster care system where kids come first – every child deserves to grow up with love, safety and stability.

"There are so many dedicated, hardworking staff in this sector who are also being let down by the system we inherited. These reforms are about better supporting kids, carers, families and the frontline workers."

Secretary of the Department of Communities and Justice, Michael Tidball, said:

“Our vision is for a world‑class out‑of‑home care program that enables children to thrive in stable, supportive environments and sees more children safely restored to their families. The strategy represents a clear turning point — restoring government stewardship, strengthening accountability and setting a new direction focused on children’s safety, recovery and connection.”