I know what you mean childatheart but I'm not sure I agree with you about wasting "thousands in poor administration." As far as funding on contact is concerned, LA SSDs have a legal duty to promote contact between the child and the birthparents until either the children are returned home or there is a decision made in the courts about the children's long term future. They don't therefore have any option on contact. A lawyer acting for the parents in care proceedings would make mincemeat of the LA if it was found that contact had not been maintained between children and parents and the case would probably be lost.
As far as "bank rolling" the IFAs, again they don't have an option because if a child is in need of a placement and there is nothing "in house" or in nearby LAs (which there never is) they the only option is an IFA placement. In a way this is the fault of governments (both Labour and Tories) who have actively encouraged privatisation in public services, allowing IFAs to spring up all over the place.
When I was still working for a LA at middle management level, many of us tried very hard to make senior managers aware that our foster carers were saying (with justification) that they were being told the LA couldn't afford to pay fcs IFA rates, but knew that these placements were being made when "push came to shove." All that we ever got was that the LA didn't have the capital available to pay all carers IFA rates. Had this been a business they would have been able to get a bank loan, but of course LAs can't do that and can only work with the budgets that they have. I have been retired from LA work for 8 years and SSDs were severely under-resourced then, and know from colleagues that it is horrendous now that Cameron has come along and slashed budgets of all public services.
I became so frustrated at one point in a management meeting that I suggested they sack all of the social workers and managers in family placement and completely outsource the service to the IFAs, and i actually meant it, because we had no answer for carers who were justifiably complaining. There was a stunned silence and very little comment. They probably couldn't have done it anyway, but it was a measure of my frustration, and feeling of empathy for the fcs who had remained loyal to the LA, whilst many had gone to IFAs.
IFA placements could be anywhere in the country of course and now Cameron is wanting to know why children are placed away from their home area. The answer is staring him in the face - their belief and determination to privatise all public services, but Blair and Brown were on the same track of course and they too encouraged "independent" Fostering Associations. Some of the directors of these IFAs are incredibly rich and drive around in Porches, and I know of one who has bought a string of race horses and houses for his 4 children. It is immoral in my view. Then of course it is not good for children because they can be placed so far from home, and as soon as there is an "in house" placement available the child is moved from the IFA placement whether he/she was settled there or not, because of the funding.
As you know there is a national shortage of foster carers and I do believe now that since the budgets were slashed, they will not be able to afford to increase payments to foster carers, but yes they will be forced to use IFAs where there is nothing else available. The other thing is that the threshold for removing children and into care has been raised higher than ever before, because there is not the funding to look after them. This is a really sorry state of affairs because children are going to suffer. However I blame this Tory government because they are the ones who are demanding millions of pounds of savings, which mean that services have to be cut to make the savings. Public services are being penalised for the greed of the bankers and the Labour govt that gave them "free rein" and they were into sub prime mortgages etc. Mind the Tories would have done the same. Cameron and his ilk don't care about people, their only interest is profits.
SO I don't think LAs have any option than to try to run a system that is inherently flawed and there is no way of improving any of its services because of the massive savings that have to be made. This govt won't rest(in my view) till all public services are privatised. They want big businesses to come in and run the service to make profits for the directors and the share holders, whilst at the same time have free rein to alter the terms and conditions of service of social service staff. It is totally immoral but we can do nothing about it.