Rather than, as the Observer is doing here, mislead about the children.
Profiteering fears as global investment firms increase stakes in England’s child social care
The first complaint is that governments with lots of capital - those sovereign wealth funds - are investing in children’s homes in Britain. We see this as being rather a good thing, capital being invested where capital is needed, but obviously opinions can differ on that.
Where this passes over into an untruth is here:
A recent analysis found that the Keys Group, whose services also include specialist care and education, had pre-tax profits last year of £27.7m on all its activities – 22.4% of its income. It also had net tangible liabilities of £128m.
The emirate of Abu Dhabi entered in the market in 2021, acquiring the Witherslack Group via its Mubadala sovereign wealth fund. Witherslack’s annualised pre-tax profits were recently estimated to be £39m last year.
This is not true. The report - it’s this one - said that EBITDA, that’s earnings before interest, tax, depreciation and amortisation, were of those amounts. As we’ve said before about this report:
They’re not including property costs.
Or even, they’re not including the costs of buying property via debt (ie, a mortgage or the like) when estimating profitability but are looking at debt levels when measuring going concern basis. Which is, as we say, a contortion too far.
These companies are not making 22.4% of turnover as profits - nor the £39 million. They’re making that as operating profit before the costs of having a home to put children in, the property costs of interest, depreciation and so on.
Now then, it is possible that these people are simply too ignorant to understand the difference. It’s also possible that there is lying for political effect here. If it becomes an established part of the political conversation that massive profit margins are being made upon running children’s homes then politics will be driven by that outrage. Whether it’s actually true or not doesn’t matter to a political “fact” which is why so much effort goes into their creation.
We’re open to the idea that this is simple ignorance, as to that this is an attempt to deliberately mislead. Neither seem to us to be a great justification for taking the blindest notice of this rubbish.
Yes, this is that day of the year that’s about the Boy Child and all that. Be interesting if people used this season to be rigorously truthful, no?
Merry Christmas all.