Private Children’s Homes Accused of “Profiteering” with £15,000 Weekly Charges Per Child

A council executive has stated that certain private children’s homes are engaging in “profiteering” by billing local authorities over £15,000 weekly for the care of a single child. Halton Council indicated that a scarcity of foster placements and other appropriate facilities has compelled it to rely more on private providers, incurring substantial costs. According to a report from the Children and Young People and Families Policy and Performance Board, the age of children entering care is decreasing. The council’s chief executive commented that local authorities find themselves “absolutely at the mercy” of private sector operators, leading to prices that are “absolutely sky rocketing.” The report noted that the circumstances observed in Halton mirror a national trend, with the government watchdog Ofsted also expressing apprehension. It highlighted three specific instances where homes were charging over £15,000 per week for individual children. These three children, it stated, all had ADHD and had endured challenging childhood experiences, such as abandonment, separation, and domestic abuse. The report further indicated that despite ongoing searches for placements, no providers had offered to care for these children. Halton’s chief executive, Stephen Young, stated on a podcast, as reported by the Local Democracy Reporting Service, that demand has risen since the Covid pandemic, and resources are increasingly strained. He remarked: “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.” A separate report presented to the board mentioned that the council is exploring various strategies, cautioning that it “could not continue” to finance such costly placements. Government data reveals that the count of private homes grew by 12% in 2023, and currently, 83% of children’s homes are under the ownership of companies, including private equity groups. Ofsted recently declared its intention to address “excessive” profit generation by children’s homes owned by private equity firms. However, the Children’s Homes Association, which represents numerous private providers, had previously stated that it “recognised the challenges” faced by local authorities, but also commented: “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.”