Private equity isn’t just eating up one fifth of the entire NHS budget. It hasn’t just doubled its role in children’s social care homes in the five years until 2023. The profit extraction is also happening to foster children.
The figures are in over foster children
The top three firms made combined profits of £40m through their provision of foster care in 2023.
The three most major providers are all private equity owned. Stirling Square Capital owns National Fostering Group, which made a profit of £23.4 million for the year to August 2023. And CapVest owns Polaris Community, which turned a profit of £14.1m. Then there’s Cap10 partners, owner of Compass Community, which profiteered at £3m.
As the Canary has previously reported, this is a dangerous combination. Profit making from placing children in care incentivises increasing the number of children in foster care.
Private agencies profit from homes for around one in three children in foster care. And the public purse is footing the bill. One review found that private firms charge 92% more than local authorities pay for in-house provision.
The whistleblower
A whistleblower spoke to the Big Issue about the privatisation of the sector. He worked at a number of firms providing care. He alerted people that he was alarmed by the business approach and that, shockingly, carers were offered bonuses for placing children into care. In fact, he said companies branded carers “gold bars”.
He further stated:
In local authorities, the emphasis is on keeping foster placements down, because we want as far as possible to keep children safely in their own homes. Ultimately, we don’t want children to be in care. But in [private firms] they want placement numbers to be high, because each placement represents income.
I saw cases where management would push to get placements filled even if the child was not the right match for the carer. Recruiters would not tell carers the extent of a child’s issues, because a placement meant the income would come in.
We should not be getting bonuses for putting more children into care. Children were treated like a commodity, like a bag of spuds being picked up and moved around.
In 2020, the outgoing children’s commissioner warned in a series of reports that private provision of foster care has resulted in “a clear lack of planning and oversight… leading to an increasingly fragmented, uncoordinated and irrational” system.
The marketisation of vulnerable children is clearly bonkers and costs more than providing services in-house. It’s another facet of the failed neoliberal experiment that needs to come to a swift end.
Featured image via Skookum Kids – YouTube
