Councils are sending vulnerable children to homes run by unqualified individuals and private equity firms, according to a new investigation. The average annual charge to the state by a private provider for a child in care is now £384,020, six times the cost of Eton College. Some providers charge over £1 million per child per year, with a few cases exceeding £3 million for children with complex needs.
The Financial Times investigation found that alongside large companies, which may invest in oil, gilts, or crypto one day and children the next, plumbers, hairdressers, and Airbnb landlords with no care experience are opening homes. There may also be links to organised crime, as children can now be more profitable than drugs. Police are concerned that gangs running children's homes can harvest state money and recruit vulnerable young people for exploitation.
While there is a shortage of provision in the south of England, there is a glut in the north-west, where property is cheaper. Lancashire has 17 places for every local child needing care. This means children from Devon are being moved up to 300 miles away. A study in Child Abuse & Neglect found a consistent association between profit-making and placing children outside their local authority area, leading to more moves and greater disruption.
Councils, lacking capital budgets for their own provision, are sending children to providers who are unqualified and, in some cases, unregistered. An investigation by LBC and the Bureau of Investigative Journalism found that in one illegal home, two care workers had seven convictions between them, including four for violent offences. They sexually assaulted a 15-year-old girl who had been moved from south Wales to County Durham because she was deemed 'at risk of sexual exploitation'.
The Children's Commissioner reports that unregistered placements are on average even more expensive than legal ones, with 669 young people, mostly with special needs, now in such homes. The true figure is likely higher, as many placements go unrecorded.
