The Local Government Association (LGA) commissioned report into the finances of social care providers found that some larger providers are achieving a profit of more than 20 per cent on their income.
The LGA also says that many providers’ profit growth is being funded through private equity debt, which raises concerns around their viability and the long-term stability of placements for children.
The largest 16 providers have a combined income of more than £1.37bn, finds the report, although some of this is from providing services outside the UK.
The figures have been released as councils across England face an annual spend of between £1.7bn and £1.8bn on buying fostering and residential care services from the private and voluntary sector. A further £900m is spent on independent special schools.
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