Curbs on profiteering in the children’s social care sector cannot come soon enough. It is getting on for three years since the Competition and Markets Authority found that children’s home owners in England, Scotland and Wales were making excessive profits while carrying too much debt – exposing children and councils to unacceptable risks. Of all the failed experiments in privatisation of the past 30 years, this has a case to be considered the worst. A situation in which children are regularly uprooted from their areas due to services having been shaped by market forces – rather than their needs – should never have been allowed.
Bridget Phillipson’s announcement on Monday that the government will seek to limit the profits of providers in England, and restrict the use of agency social workers to promote a more stable workforce, was the clearest indication so far of the direction that government reforms will take (children’s social care is devolved, and the Scottish and Welsh governments are pursuing their own plans). Ofsted will gain new powers to issue fines and inspect chains as well as individual homes. Providers will be obliged to be more transparent about their finances.
Following a whole series of scandals, including children inappropriately housed in tents and boats, and others exploited by criminal gangs, the whole package comes as a relief. While the last government knew there was a problem, it refused to fund the changes proposed in its own review.
Ms Phillipson’s approach is tougher, and rooted in acceptance that the private sector – which controls around 80% of all placements in England, up from around half 20 years ago – must be brought out of the shadows. Children’s social care businesses should have the brightest of lights shone on them – with opaque ownership structures and accounts outlawed. As with early years and nurseries, it is alarming that private equity businesses became so active in this sector in the first place. Labour should seek to strengthen state and not-for-profit alternatives.
But in this as in other parts of the public sector, regulation is not the whole story. What happens next will depend on resources. Local government spending on looked-after children rose from £3.1bn in 2009-10 to £7bn in 2022-3, and shows no signs of easing. The recent budget offered only £600m in additional funding for social care (including older and disabled people as well as children). The funding crisis faced by councils should be expected to get worse rather than better.
Boosting support for kinship carers is one means by which ministers hope they can reduce pressure on the overstretched care system. Putting more emphasis on early intervention, and involving families in decision-making when children are removed, are others. Ms Phillipson is also right that care leavers need more support if their life chances are to be improved. But this new entitlement, as well as the requirement for councils to consent to home education in households where there are child protection concerns, are policies that must be funded if they are to work.
The children’s social care system is shamefully flawed. Labour’s efforts to repair it are welcome. But the grim reality is that private capital filled an opening created by a public retreat. Unless and until the state rebuilds its own children’s social care provision, or offers new backing to non-profit partners, it is hard to see how these plans can deliver the change that is needed.
