Anne Longfield, Children’s Commissioner for England, has published a set of reports (The children who no-one knows what to do with / The Stability Index 2020) showing how the children’s residential social care system is broken and is failing many of the most vulnerable children, in particular those who are most at risk of falling through gaps in the system and becoming victims of criminal or sexual exploitation.
The second report, ‘Private provision in children’s social care’, explores the growth of private companies providing foster placements and children’s homes. It warns there is a clear lack of planning and oversight for the market, leading to an increasingly fragmented, uncoordinated and irrational market. Private provision accounts for 73% of the growth in the number of children in care between 2011 and 2019. The number of children in homes provided by the private sector has grown by 42% over this period whereas local authority provision has not kept pace and has actually shrunk in some areas. The Children’s Commissioner argues that the responsibility for making the system work has fallen through the cracks: the growth in private provision may not have been a deliberate policy choice but it is a consequence of government inaction along with the options and funding available to local authorities.
The report finds that certain large providers are seeing a profit margin of around 17% on fees from local authorities, which can amount to over £200 million a year in total. It looks at how the companies providing these services are increasingly being owned by private equity firms and raises questions about the way some large private providers are financed, with high levels of debt that could potentially create instability in future. It also shows how opaque the system has become, with detailed and complex investigation needed to understand the ownership, accountability, profits, costs, and prices of different providers – and the situation changes rapidly.
As part of this research, the Children’s Commissioner’s Office spoke to children in care and care leavers about their experiences of the care they received from providers. Most were not concerned by who owned their care home, but they did care deeply about the care they receive and the people who give it.
The report shows that differences in the quality of care – as measured by Ofsted ratings – between local authorities and large private providers are generally small, but smaller private providers are more likely to have worse Ofsted ratings than large private providers. At the same time, however, the majority of children’s homes are rated “Good” or “Outstanding”, regardless of whether they are run by local authorities or the private sector.