The trade body that oversees children’s care homes has taken the unprecedented step of publicly berating a major private provider for jeopardising “the wellbeing of young people in its care” after it announced a string of home closures.
The Observer revealed last month that England’s fourth largest provider of residential places for looked-after children, Outcomes First Group was shutting 28 care homes due to “market challenges”.
The controversial decision by the firm, which is owned by private equity company Stirling Square, has led to the uprooting of more than 60 vulnerable children to other homes, with some moved to other areas of the UK.
The Children’s Homes Association, which represents private providers as well as some councils and charities, said Outcomes First only gave local authorities a month to find new placements for children when there is a dire shortage of residential care spaces. “Their decision to close the homes without sufficient notice for local authorities to protect the wellbeing of the young people in their care is unacceptable and falls woefully short of the standards expected of providers in this vital sector,” it said.
Two more Outcome First staff come forward last week with stories of traumatised children being shunted around the country. A care worker told the Observer that one child staying in a home in south-east England was sent to Scotland. “The children were distraught. A lot were very upset and clingy to the staff. When some children are rejected, they can then try to reject you. That can lead to destructive behaviour and violent behaviour, which we did experience,” he said. “It has been completely devastating for them.”
Another of the group’s care workers said a child was moved from South Yorkshire to London. “There’s no one near her – her family is in Yorkshire,” she said. The worker added that another child, who had lived in the home for six years, started self-harming and smashing plates the night before she was due to move out. “I was very close to calling the police because I couldn’t control it. Unfortunately, I started crying, and I said, ‘I’m so sorry, there is nothing I can do’. At that point, she started to calm down, and she was crying along with me through the early hours,” she said. “It was honestly one of the saddest things I’ve ever seen.”
The workers claim they were given the news that the homes were shutting down and their jobs were at risk via a Microsoft Teams video link by a manager who looked like he was sitting in his car in a car park. The children, who were told later, were given two weeks’ notice before the homes closed, staff claim.
The association, which does not include Outcomes First as a member, said the group’s decision was unjustified. “Despite our in-depth knowledge of the financial and operational challenges affecting all providers, we see no reason why such drastic action would be necessary or justifiable for any responsible, properly run residential childcare organisation,” it said.
The firm’s profits increased to £5.5m in 2021, from £3.5m the year before. But analysis of the group’s most recent accounts by a private equity specialist suggests the group is highly indebted and facing sharply rising interest payments. The group is paying close to 10.25% in interest alone on £510m of debt, which is due to be repaid in 2025. It also has £41m of loan notes, £52m of variable loan notes and £15m of preference shares, which are all accruing interest.
There are mounting concerns about the sudden large-scale closure of homes run by private firms, which have come to dominate the sector. The Competition and Markets Authority has warned that highly leveraged providers could start exiting the market when interest rates rise, giving councils little time to place children in other homes.
Outcomes First said it had been operating within the terms of its contracts with the local authorities. “We are unable to comment on individual cases. No placement decision is made in isolation without the full agreement of the local authority and social worker. Transition plans were agreed by all parties,” said a spokesperson for the group. “Where possible, the group is redeploying staff at these homes to others within the organisation.”
