In England, adoption provides a new family for children in care who are unable to return home. The number of adoptions peaked in 2005 but adoptions have since been declining. One possible factor in the decline is the reluctance of local authorities (LAs) to use adopters approved by voluntary adoption agencies (VAAs) and this may have led to children not being placed. There is a perception that VAA adopters are expensive because a higher inter-agency fee is charged. Meanwhile, many VAA adopters are waiting for a placement. The aim of this study was to consider whether the inter-agency fee was a good reflection of the expenditure incurred by LAs and VAAs. The adoption team accounts of ten LAs and seventeen VAAs were examined and it was found that their average expenditure was similar, as were their overhead rates. However, this expenditure was substantially more than the inter-agency fee. It was found that the fee has failed in its purpose to encourage inter-agency cooperation and provide full cost recovery. The VAA sector is in crisis, services are not sustainable and the children who are likely to suffer from closures are those who are older, of minority ethnicity and those needing a placement as a sibling group.