This paper examines market issues in the provision of children's services i
n the light of the changing role and practice of local authorities contract
ing for welfare sen,ices. In adult services, where there has been a legal r
equirement to reorganize on market lines, the services have had to modify s
ome of their earlier contracting practices es to take account of the comple
x requirements of health and welfare services and it is argued that relatio
nal contracting offers a more appropriate paradigm for these. Following the
implementation of the Children Act 1989, although not a requirement of the
Act, mag of the organizational systems in relation to markets, originally
developed for adult services, have been adopted for children 's services. T
wo areas of services for children, day care and fostering services, are dis
cussed in order to demonstrate that these contracting systems are inappropr
iate and often dysfunctional for the children concerned. It is argued that
there is a widening gap between contracting systems in adult and children's
services which needs to be addressed. In general, it is concluded that the
philosophies of the marketplace are flawed when applied to children's serv
ices.