Skip to main content

Council concerned about profits made by companies supporting children in care

09 February 2024

Plymouth City Council is calling for greater scrutiny of private companies profiting from the care of vulnerable children and young people.

Council Leader Tudor Evans OBE has written to the David Johnston OBE MP, Minister for Children, Families and Wellbeing, to express concern about the huge profits being made by private companies that provide children’s social care placements. This follows a Motion on Notice tabled by Councillor Jemima Laing at the Full Council meeting on 29 January 2024.

There are currently 520 children in the Council’s care and they are supported by a range of providers. Due to a lack of suitable placements, such as foster homes, this includes privately-owned, profit-making organisations.

With 52 children currently residing in residential care at an average cost of £328,719 per child, per year, the total annual spend with these organisations makes up 13 per cent of the Council’s overall annual budget for 2023/24.

A recent Local Government Association (LGA) report found that the 20 largest providers of children’s social care collectively made profits of £310 million in 2021/22, a 19 per cent profit margin on their total income.

Councillor Evans said: “It is completely immoral that these companies are profiting at such huge levels. Caring for the most vulnerable children and young people in our society should not provide an opportunity for material gain. These companies are collectively making millions of pounds worth of profit each year, while local authorities across the country are struggling to balance their finances and hard-working taxpayers are struggling with rising costs.”   

Councillor Laing, Cabinet Member for Children’s Social Care, said: “All of our children and young people deserve the very best start in life, with the best possible care and ensuring their safety and wellbeing is absolutely paramount. This is not simply about cutting costs, because our priority is always to make sure that each individual child is receiving the care that they need whatever the cost. But we need more transparency about the fees that we are being charged, because these are public funds and the more we spend on these services, the less funding is available for other preventative programmes that help to keep families together.

“We completely understand that providers need to cover their operating costs and save funding for future investments, but the Government needs to look into this more closely. It is absolutely scandalous that this much money is being made from such a vitally important service.”

The Council is asking for the Government to investigate the largest providers to children’s social care services so that there is greater scrutiny of the fees they charge and how any profits are distributed.