Spending on independent care placements for children up by £2bn, research reveals

Joe Lepper
Thursday, June 17, 2021

Council spending on children's residential and fostering placements with independent providers has increased by more than £2bn over the last two years, analysis has found.

Private residential care placements have increased by 29 per cent, figures show. Picture: Adobe Stock
Private residential care placements have increased by 29 per cent, figures show. Picture: Adobe Stock

This is a rise of 21 per cent compared with local authority spending of £1.6bn in 2017/18.

Over this period spending on residential care placements in the independent sector has seen the sharpest increase, of 29 per cent, compared with a 13 per cent rise in foster care spending.

In addition, councils spent a further £900m on placements in special schools for children with special educational needs and disabilities (SEND) in the independent and non-maintained sector.

The figures have emerged in the latest report by Revolution Consulting, commissioned by the Local Government Association (LGA) into profit making and risk among children’s social care placement providers.

This also found that the largest 20 providers have an income of £1.58bn and made £278m in profit.

Consolidation among the largest providers in the sector was is noted.

The 10 largest independent providers run 30 per cent of all private and voluntary children's homes, the report found. Meanwhile, the six largest providers supply 50 per cent of all foster places.

Profit levels among providers, who are heavily reliant on cash strapped councils is “very concerning”, said chair of the LGA's children and young people board Anntoinette Bramble.

“Not only should providers not be making excessive profit from these placements, but their income is almost solely reliant on fees paid by councils who are reporting severe budget deficits in children’s services and experiencing substantial impact of Covid-19 on their income,” she added.

Earlier this month the chair of the Independent Review into Children’s Social Care Josh MacAlister said profiteering from the sector is “indefensible".

In May, Revolution Consulting director Andrew Rome raised concerns around debt levels and consolidation among companies operating in the children’s social care sector.

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