Children's homes accused of profiteering as some charge £16k a week to look after one child

Young girl curled up in hiding place
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Some private children’s homes are charging Halton £15k a week to look after a single vulnerable child, as the council’s chief executive accused some providers of ‘profiteering’.

A report to Halton’s Children and Young People and Families Policy and Performance Board revealed that a shortage of foster families and other suitable provision had left the council having to place more children with private providers at huge expense. The report added that not only were more children being placed in care, but that the age of those being placed in care was becoming younger.

The situation echoes that seen around the country, with other councils and government watchdog Ofsted also raising concerns.

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The report mentioned the cases of three unnamed children currently in care in Halton. They included:

  • One child placement costing 15k a week. The report said it had been ‘difficult’ to find the child a new home after their previous home had given notice.

  • Another placement charged at 15k a week. Previous placement requests had resulted in a number of unregulated providers as no regulated provision would provide accommodation.

  • One placement costing £15,982 which was described as a ‘short term crisis placement’. The report said further placement searches were ongoing but no offers had been made.

All three children had a diagnosis of ADHD and had suffered adverse childhood experiences, including abandonment, separation and domestic abuse. The report said that while placement searches continued, none of the children had had any providers come forward to care for them.

The report said: “Prior to each placement, negotiations have taken place with the providers to reduce the cost of the placements, none of these negotiations have been successful and it is likely due to a number of children both regionally and nationally looking for placements. Failure to agree the placements would have resulted in the child having no placement.”

The report said ‘significant efforts’ had been made to engage with providers to establish provisions locally for children that meet their needs.

It added: “The local authority have engaged with not-for-profit agencies and those agencies who reflect similar ethics as the council in respect of prioritising the needs of children, the priority being their welfare and the care being of high standard – agencies who do not profiteer off children’s trauma.”

Interviewed on the Truth about Local Government Podcast, Halton’s chief executive Stephen Young said there had been increased demand since Covid and that resources were increasingly stretched.

He said: “I do think there’s quite a lot of profiteering going on and that’s being called out increasingly. It’s putting local authorities absolutely at the mercy of private sector operators and that’s seeing these prices absolutely sky rocket.”

He said there needed to be more alternative provision and called for Government legislation. A report to the board said the council was looking at a number of measures, warning that it ‘could not continue’ to fund such expensive placements.

Plans included:

  • Developing ‘effective relationships’ with organisations that ‘prioritise the care needs of children above making a profit’.

  • Developing further residential and foster carers to meet the needs of children with complex needs.

  • Challenging providers who charge significant fees but deliver a ‘less than satisfactory service’ which results in further rejection for children and compounds their behaviours.

  • Targeting foster carer recruitment strategy to include emergency placements, respite placements and specialist in house foster carers.

  • Implementing an edge of care team that reduces the number of children who come into care.

The cost of social care is seen as one of the most pressing issues on local government finances nationally, with the number of private homes rocketing in recent years. According to Government figures, the number of private homes increased by 12 per cent in 2023, and 83 per cent of children’s homes were now owned by companies, many run by private equity groups.

Ofsted recently stated it wanted to tackle ‘excessive’ profit-making by private-equity owned children’s homes, as part of wider efforts to strengthen the regulation and inspection of children’s social care, to ‘make sure their decisions are made in children’s best interests and not solely for profit’.

And Barry Lewis, Conservative leader of Derbyshire County Council, previously accused some companies of treating councils ‘like diamond mines’.

But the Children’s Homes Association, which represents many private providers, has previously said it ‘recognised the challenges’ local authorities were experiencing, but added: “Residential childcare is the most complex sector of children’s social care and it is vital to be cautious in oversimplifying high-level cost data.”