Interview: The business of care - Stephen Bradshaw, board memberfor education and fostering, Priory Group

Many in the social care sector fear private equity firms have been trying to make a quick buck off the back of society's most vulnerable children. In recent weeks several social care charities, including the Fostering Network and The Adolescent and Children's Trust, have spoken out against the growing number of private investors in the sector (CYP Now, 17-23 October).

But surprisingly for a board member of one of the biggest private care providers around - The Priory Group - Stephen Bradshaw, who is responsible for its fostering and education services, feels some of the criticism is justified.

"There is damage done when investors look at the education and social care business as similar to selling widgets or cola cans and think they can make a quick buck and then get out," he says. "Sedgemoor, as well as being a disaster for young people, is also a warning for companies who think this is an easy market. Education and social care can't be seen purely as a business model, it's about meeting young people's needs."

But in that case why be a private, for-profit company? Why not be a charity or a social enterprise? "Well some charities do make a surplus, the only difference is they don't call it profit," says Bradshaw. "One reason why we are for profit is that it gives us the ability to raise money. We can change shareholders and get investment to grow the business. With that kind of capital input we've been able to invest in improving services, like a £10m sports hall for one of our schools. If we were not a private company we wouldn't have access to that capital and could only raise revenue by increasing the fees we charge. It's also easier to be flexible as a business."

Priory's current investor is the bank ABM AMRO. "It's a seven-year investment and that gives us stability," Bradshaw says. "For some investors the children's home and foster care sector seemed to be one with high fees that attracted people who thought they could make money. But the money is very tight, local authorities won't pay extortionate fees. We have got to provide value for money, local authorities aren't going to pay for a service they can do themselves."

Priory's approach, says Bradshaw, is to offer integrated services. This means bringing education, social care and mental health services together so the needs of the young people it works with - who are autistic or have behavioural problems - are not treated separately. Bradshaw says the GCSE results of the looked-after children it works with proves their success. "On average only 11 per cent of looked-after children get five A* to C grade GCSEs, in our schools its 60 per cent," he says.

But the way local authorities commission can restrict this integrated approach, he says. "We're really keen to have the money follow the child. Children may come to us with mental health needs but as time goes on it might be their education we need to address," he says. "We've been successful at doing that in some cases, for example getting a primary care trust to turn funding initially provided for mental health work towards a child's schooling."

But not all authorities are open to the approach. "The silos still exist, education and social care are more linked up but with health issues the silos are still there. Local authorities aren't always keen and you have to fight tooth and nail for it, but that's why it's important as a provider that we have a good relationship with the local authority."

He concludes that providers must put the needs of young people first. "Having operators who are out for the money is not desirable. We all want better services and value for money."

BACKGROUND - THE DEMISE OF SEDGEMOOR

- CYP Now broke the news that Sedgemoor was selling its residential care homes and schools last month

- The company, owned by private equity group ECI, went into administration shortly after

- The firm ran more than 65 care homes and 14 schools for children with complex needs

- Keys Childcare purchased several of Sedgemoor's homes following the decision to put it into administration

- The company's collapse prompted The Adolescent and Children's Trust, the UK's largest fostering and adoption agency, to voice concerns about the increasing number of private equity firms in the foster care sector.