'Completely immoral' companies are profiting at such huge levels over kids in care
Plymouth City Council has called on the Government to take action
Plymouth councillors are asking the Government to look into what they are calling the 'profits' of looking after kids in care.
Some firms are charging more than £330,000 a year for each child - which the council say is impacting their budget.
In response, the Government says profiteering in the children's homes markets is 'wholly unacceptable' and it's working to increase transparency across the sector.
Council Leader Tudor Evans OBE wrote to David Johnston MP, Minister for Children, Families and Wellbeing, to express concern about what he calls 'the huge profits being made by private companies that provide children’s social care placements'. The letter followed a motion by Councillor Jemima Laing at the Full Council meeting on 29 January 2024.
Cllr Tudor explained: "There are currently 520 children in the council’s care and they are supported by a range of providers. Due to a lack of suitable placements, such as foster homes, this includes privately-owned, profit-making organisations.
"ith 52 children currently residing in residential care at an average cost of £328,719 per child, per year, the total annual spend with these organisations makes up 13 per cent of the Council’s overall annual budget for 2023/24.
"A recent Local Government Association report found that the 20 largest providers of children’s social care collectively made profits of £310 million in 2021/22, a 19 per cent profit margin on their total income.
“It is completely immoral that these companies are profiting at such huge levels. Caring for the most vulnerable children and young people in our society should not provide an opportunity for material gain. These companies are collectively making millions of pounds worth of profit each year, while local authorities across the country are struggling to balance their finances and hard-working taxpayers are struggling with rising costs.”
Councillor Laing, Cabinet Member for Children’s Social Care, said: “All of our children and young people deserve the very best start in life, with the best possible care and ensuring their safety and wellbeing is absolutely paramount. This is not simply about cutting costs, because our priority is always to make sure that each individual child is receiving the care that they need whatever the cost. But we need more transparency about the fees that we are being charged, because these are public funds and the more we spend on these services, the less funding is available for other preventative programmes that help to keep families together.
“We completely understand that providers need to cover their operating costs and save funding for future investments, but the Government needs to look into this more closely. It is absolutely scandalous that this much money is being made from such a vitally important service.”
The council is asking for the Government to investigate the largest providers to children’s social care services so that there is greater scrutiny of the fees they charge and how any profits are distributed.
In response a Department for Education spokesperson said: “Profiteering in the children’s homes market is wholly unacceptable.
“We are working to increase financial transparency across the children’s homes sector, and are also investing £259 million to support local authorities to create more placements for children in high-quality and safe homes.
“We are also making the largest ever investment of £36 million to deliver improved foster carer recruitment and retention across the country, alongside greater financial support for foster carers.”