Private children's homes making 'excessive profits' face crackdown

Private children’s home operators in England making ‘excessive profits’ from vulnerable youngsters in their care face a crackdown.

Education Secretary Bridget Phillipson will this week unveil plans to take action against ‘rip off’ private providers over-charging local authorities for the vital care.

Her invention comes amid claims a lack of enough children’s homes was leaving councils at the mercy of extortionate costs from private operators to meet their legal duty to place vulnerable youngsters in care.

Spending on ‘looked-after children’ rocketed from £3.1 billion in 2009/10 to £7 billion in 2022/23.

And last night, Ms Phillipson told the Mail on Sunday: ‘I am calling time on years of tolerance of rip-off providers making excessive profits from vulnerable children and leaving councils in financial jeopardy.

‘To deliver the quality of care this country’s children deserve, we are lifting the curtain on profit-making at the expense of quality care for vulnerable children’.

This would empower local authorities ‘to make sure more of taxpayers’ hard-earned cash is channelled to giving children in care the best start in life’.

Two years ago, a Competition and Markets Watchdog report raised the alarm over how profitable the children’s home and foster-care sector was to some suppliers.

It said fifteen large operators had steady operating profit margins of 22.6 per cent between 2016 and 2020.

However, private providers said some of their services can cost less than their council equivalents.

Ms Phillipson’s officials said there were currently about 83,000 children in ‘looked after’ care across England.