The Local Business Commission (LBC) conducted an investigation, which revealed that councils in England and Wales have spent 132% more money since 2018 on private residential placements for children in foster care. This represents an increase of more than £800 million.
Nearly one and a half billion pounds was spent on private provision during the most recent fiscal year.
A representative for the Department of Education stated that the government is interested in strengthening regulation because some private providers are making excessive profits, which is very undesirable.
Counsellor Louise Gittins, who is a member of the Local Government Association, indicated that councils are receiving one million pounds on an annual basis for the purpose of providing care for certain children.
She continued her remarks by saying, “To be clear, some children really do need an awful lot of support, so when we hear of children that are in need of four or five people looking after them 24 hours a day, the level of complexity when you hear about some of the cases is absolutely heartbreaking.”
She proceeded by making the statement, “It is unacceptable that individuals are profiting from the children in our society who are the most likely to be vulnerable.” It is my opinion that this is because there is a lack of local provision, which means that we do not have a choice in the subject of where we may send our children. This is the reason why I believe this to be the case.
The councilor Gittins also issued a warning that, in the absence of any action being taken, an increasing number of councils may find themselves in extremely tough financial situations. This warning was made in the event that no action is taken.
Figures received through freedom of information requests indicate that the average yearly cost to a council for a child who requires residential care has climbed from around 77,000 pounds in the fiscal year 2018/19 to 116,000 pounds in the fiscal year 2022/23. This represents a significant increase from the previous year’s cost of approximately 77,000 pounds.
The expansion has also been attributed to the closure of large-scale children’s homes that are managed by local governments, as well as the increase in the number of teenagers who have complicated needs and require residential care.
Local authorities contend that the price that the private sector is charging is nothing more than profiteering and that spending is increasing faster than the number of children who need residential care. This is because the private sector is charging more than the number of children who require residential care.
The amount of money that Leeds Council spends on residential placements in the private sector has more than doubled during the year 2018. This increase coincides with the year 2018.
Cllr Helen Hayden, who is in charge of children and families for the local government, stated that “We have obscene profiteering in the children’s social care—I hate to use the word market, but it is—because I don’t think there should be a market when it comes to looking after children.” Hayden is a member of the council.
Private vendors, on the other hand, are free to choose their own rates, whatever they like. In addition, if you find yourself in a circumstance in which you are in need of the care of that kid, then you will be forced to pay the amount that they are requesting from you.
A limit should be placed on the amount of money that the private sector may charge local governments for residential care services, according to Cllr Hayden, who is campaigning for the implementation of such a restriction.
“Despite our research,” stated Dr. Mark Kerr, chief executive officer of the Children’s Homes Association, “the number of children requiring high-needs specialist residential care has significantly increased.” This conclusion was reached in light of the findings of the research. Additionally, he noted that a significant number of local authorities were forming partnerships with commercial entities rather than constructing their own service.
On the other hand, Dr. Kerr asserts that the average prices in the case of independent suppliers were consistently lower than those of governmental providers. Furthermore, the exorbitant costs emanated from the unregulated sector, which comprised groups that do not operate licensed children’s homes. This sector was the source of excessive prices.
Recently, it was decided to ban businesses that are owned or funded by tax havens. He added that his organization has not received any proof that its members are involved in profiteering and that this decision was made.
A spokesman from the Department of Education issued the following statement: “We acknowledge that local authorities are experiencing rising costs to place children in care, with some private providers making excessive profits.” We are aware of this situation.
It is not possible to tolerate this. Our intention is to improve the rules and work together with local governments in order to ensure that every child is provided with a home that is not only secure but also loving. We will be able to provide value for the money that taxpayers spend as a result of this.
An official announcement has already been made regarding the Children’s Wellbeing Bill. This bill will put children and their well-being at the forefront of education and children’s social care systems. Additionally, it will bring about improvements that will guarantee that children are safe, healthy, and happy and that they are treated fairly.