Children in Residential Care

 Children's residential care, foster care and special schools have steadily been taken over, with the blessing of successive governments, by profit-making companies. Private agencies now own 36% of the fostering sector in England, while profit-making corporations own 83% of children's residential care. "Blocks of provision" - which means numbers of children - are traded from one company to another. How much is a human being worth? The value of a child on the books, as the dedicated journalist Martin Barrow documents, is £100,000...

Children in residential care, on average, generate £910 each in profit a week for the corporations that control them. Large commercial providers of children's residential care make average profits of 19%, according to a report commissioned by the Local Government Association - an astonishing rate of return. Ordinary businesses do well to make 5%.

London Street Children
Edward Robert King (1863-1951)
Photo Credit: UCL Culture [CC BY-NC-SA]

Who are these lucky companies? An Observer investigation in 2022. found many of them are private equity, venture capital and sovereign wealth funds. Among the owners are the state of Qatar and the emirate of Abu Dhabi, whose care company in the UK, mostly investing in special schools, made a profit of 26.5%. The British government believes it is unacceptable for the Telegraph newspaper group to be bought by the United Arab Emirates  - but acceptable for essential public services to be owned, for profit, by this cluster of dictatorships...

Who pays for these profits? Superficially, our local authorities - which of course, means all of us. This month, two Northamptonshire councils revealed that they are paying an average of £281,000 a year for each residential placement, or £5,400 a week. A direct comparison cannot be made, of course, because many children in care have complex needs, but just by way of reference, Eton's eye-watering school fees are £46,000 a year. This exacerbates the impact of austerity: a combination of massive cuts to council budgets, the increasing number of children in care and the stupendous profits being made by private operators are driving many local authorities to the verge of bankruptcy...

How could we have reached this point, in which the exchange of children for profit has been normalised and generalised? Well, by following the dominant poisonous ideology of our times - neoliberalism - to its logical conclusion: that everything, regardless of inherent value, can be bought and sold.

(George Monbiot, The Guardian, 2024)

The independent review of children's social care published in 2022 concluded that "providing care for children should not be based on profit". Like many reviews it has been put away to gather dust.

Letters

With more children in care now than ever before, children's residential and foster care provision is a lucrative cash cow for hedge funds and asset management companies, using taxpayers' money to profiteer from the lives of children in care.

However there is a glimmer of hope. A small number of independent fostering agencies are charities, providing services on a not-for-profit basis. Working alongside local authorities, with no shareholders to enrich, not-for profit fostering agencies reinvest surplus funds back into their organisation to fund activities, educational support, and therapeutic interventions for their children. They also fund training and financial support for their foster carers and activities such as holidays for children with disabilities and additional needs. 

This model should be the rule rather than the exception for the whole sector.

The Welsh government has taken the bold step to eliminate profit from the care of looked-after children by the end of its term, in 2027. It was never likely that the current government in Westminster would side with children over hedge funds and private equity, and follow their example. But surely it's time the Labour party pledges to do the same, and promises to legislate to outlaw profit from children's social care, once and for all?

(David Scattergood, Stockport, Greater Manchester, The Guardian, 2024)