Lies, damned lies and political machinations

They’re doing it again:

Private equity companies now own or partly own 11 of the 20 largest providers of fostering and children’s homes in England, as calls to ban “obscene” profit-making in children’s care grow.

An investigation by the thinktank Common Wealth found the “big four” independent fostering agencies – which provide almost a quarter of fostering placements in England – have paid out more than £200m from taxpayers to shareholders in interest payments since 2020.

Andrea Egan, the general secretary of Unison, said the findings must be a “wake-up call” for systemic change in children’s social care.

“Profiteering from children’s social care is nothing short of obscene. Decades of outsourcing mean essential services funded by taxpayers are being treated as a goldmine by investors,” she said. “They’re using the welfare of vulnerable children to line their pockets. Children’s social care needs fundamental change, and it needs it soon.”

As we’ve pointed out before, a number of times, this is not wholly true. In this new report:

For late intervention services the costs and quantity of care delivered has diverged dramatically. Since 2020, the rise in cost of care placements has far outpaced the increase in the number of children in care.[5] Increasing demand and lack of supply for these services has been exploited by for-profit service providers, with the largest providers “making materially higher profits, and charging materially higher prices”.[6] From the private equity firms that dominate the sector to small scale landlords who have converted their private rental accommodation to children’s homes[7] — private interests have flocked into the children’s social care sector to profit from Britain’s most vulnerable children.

Footnote 6 is:

“Children’s social care market study final report”, Competition and Markets Authority, 22/03/2022. Available here.

The important line in that report being:

Turning to price, our evidence suggests that the cost to local authorities of providing their own children’s home placements is no lower than the cost of procuring placements from private providers, despite their profit levels.

Which is, we really insist it is, important. We have proof here - proof good enough that Common Wealth is willing to quote from the same source, even if preferring to skip over this bit - that local authority provision is so inefficient that it’s as bad as - at least as bad as - vastly profiteering private equity capitalist b’stardadry.

And, well, you know, perhaps that’s the bit of the British state that actually needs fixing then?

Tim Worstall