Councils warn of ‘profit-making’ in children’s care market

Town hall leaders have warned about the ‘profit-making and financial risk’ in the chidren’s care market.

New research published by the Local Government Association (LGA) shows the six largest independent providers of placements made £219m in profit last year.

The report by the LGA also shows that some independent providers of children’s residential and fostering placements are achieving profits of more than 20 per cent on their income, while four of the seven largest groups of independent providers had more debts and liabilities than tangible assets.

While councils provide some of their own fostering and children’s homes places for children in care, nearly three in four children’s homes and two in five fostering households are now provided by independent organisations, which includes private and charitable companies.

The two largest independent fostering providers offer nearly a third of all independent fostering places, according to the LGA.

The Department for Education recently launched an independent review of children’s social care.

The chair of the review, Josh MacAlister, recently contacted the Competition and Markets Authority asking them to investigate the children’s social care ‘market’, a move which could provide important evidence around how homes are provided for children in care.

The LGA is calling for this positive review to lead to greater national oversight of companies providing homes for children in care, like the role the Care Quality Commission (CQC) holds for adult social care provision.

‘We cannot risk a Southern Cross or Four Seasons situation in children’s social care,’ said the chair of the LGA’s children and young people board, Cllr Judith Blake.

‘Stability for children in care is paramount if we are to help them to thrive. An oversight scheme is needed to help catch providers before they fall and ensure company changes don’t risk the quality of provision.

‘Providers should also not be making excessive profit from providing placements for children. What matters most is that children feel safe, loved and supported, in placements that best suit their needs.’

Photo Credit – Ponce_Photography (Pixabay)