PA
Wealth funds have councils “over a barrel” over the extortionate fees they charge for residential care, George Monbiot has claimed.
The steady erosion of public sector control over crucial services has seen children’s residential care fall victim to the ruthless profiteering of the many private firms that have cashed in from outsourcing.
Every child in residential care now generates, on average, £910 of profit every week for the corporations that control them, which account for an increasing proportion of providers.
Private agencies own 36 per cent of the fostering sector in England, while profit-making corporations own 83 per cent of children’s residential care.
“Blocks of provision” – which means numbers of children – are often traded from one company to another.
Large commercial providers of children’s residential care make average profits of 19 per cent, according to a report commissioned by the Local Government Association – an astonishing rate of return, Monbiot notes, compared to most ordinary businesses, which do well to make 5 per cent.
Among the firms profiteering are private equity businesses, venture capitalists and sovereign wealth funds.
The state of Qatar and the emirate of Abu Dhabi, whose care company in the UK invests mostly in special schools, made 26.5 per cent profits in 2022.
Others raked in huge profits from local authorities which pay an average of £281,000 a year for just one residential placement, or £5,400 a week.
Eton, by comparison, charges pupils £46,000 a year.
“This exacerbates the impacts of austerity: a combination of massive cuts to council budgets, the rising number of children in care and the stupendous profits being made by private operators are driving many local authorities to the verge of bankruptcy”, Monbiot says.
Read his analysis in full here.
