Earlier this month, the Department for Children, Schools and Families (DCSF) announced it was withdrawing NCERCC's funding.
Instead, private provider Tribal will run a new programme of "Support and Challenge for Children's Homes", because the DCSF says "more needs to be done to reform the sector".
But Will McMahon, chair of the CLA, said private companies should not be allowed to profit from vulnerable people.
He added that the government failed to consult either service users or former service users on the changes.
"There is no sector where government's penchant for outsourcing key services to private companies has proved to provide better service delivery for vulnerable populations — one only has to think of the elderly care sector to know that privatisation does not necessarily mean quality provision of care," he said.
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