MP Alleges Child Social Care Firms Are ‘Slowly Bankrupting’ Council

An MP has stated that companies providing children’s social services are involved in “outrageous profiteering,” which poses a risk of financial collapse for a local authority. Jonathan Brash, a Labour MP, informed the House of Commons that Hartlepool Borough Council is “being slowly bankrupted” due to firms excessively charging for their services. These remarks were made as the local authority disclosed that its expenditure on children’s social care has doubled over the past five years, reaching £46m for the 2024-25 period. Councillor Rachel Creevy identified the elevated costs as the “biggest threat to the council’s financial sustainability.” While addressing the Commons, Brash asserted that the four leading private providers in Hartlepool were charging an average of £12,000 per child each week. In an interview with the BBC, he further stated: “Most people don’t realise the crisis councils are facing. They are having to make impossible choices around cutting services and increasing taxes to fund the care of our most vulnerable children – all because of the disgraceful profiteering of companies making their money from the misery of others.” Brash’s remarks were delivered in response to Bridget Phillipson’s proposals to impose a cap on the profits of companies operating in children’s social care. The education secretary noted that there are currently over 1,500 placements, each incurring costs exceeding £500,000 annually, and the four largest providers are generating profits between 20 and 30%. She commented: “When you think crucially to where they are making this profit, it is off the backs of the trauma, abuse and sometimes very difficult early childhood experiences of some of the most vulnerable children in our country.” The government plans to introduce new regulations that would mandate large providers to reveal their financial details and restrict their profits. Additionally, it intends to enhance Ofsted’s authority to investigate and penalize providers. Creevy, who chairs the council’s children’s services committee, stated: “Like many northern councils, Hartlepool is facing significant and sustained pressures on children’s social care, with private market costs being a major factor.” She further commented: “We welcome any government plans that may address this position, including any cap on profits.”