Children and Young People: Local Authority Care

Baroness Tyler of Enfield Excerpts

Thursday 18th April 2024 Lords Chamber

[Baroness Tyler of Enfield (LD)]

My Lords, I congratulate the noble Lord, Lord Laming, on securing this critically important debate and introducing it so expertly.

Pressure on children’s social care is at an all-time high. As we have already heard, there are almost 84,000 children in the care system. In my view we are facing a perfect storm, with escalating numbers of young people coming into a system that has become increasingly focused on delivering late intervention services, in particular high-cost residential care placements. Councils are unable to invest in early intervention services that can prevent families reaching crisis point and children having to enter care in the first place.

The figures are stark. On average, the cost of a residential placement is four times that of a foster placement. In the last 10 years, spending on early intervention has almost halved, while spending on late intervention has risen by almost one-half.

We know that more children are entering care with complex or multiple needs. There has been an increase in the number of older teenagers entering care. School age children in care are more likely to have special educational needs and mental health problems. Children in the most deprived 10% of neighbourhoods are over 10 times more likely to be in care or on a protection plan than those in the least deprived 10%.

I think we can all agree that children in care need stability to heal and thrive, yet for too many their experience of care is characterised by instability: being moved from home to home or school to school, being separated from siblings, being moved far away from their support networks, or facing a revolving door of social workers and other professionals.

Over the past decade, as we have heard, there has been a significant change in the way that care placements, particularly residential care placements, are provided. As of last year, private providers operated over 85% of all children’s homes. The Competition and Markets Authority has reported how this changing market has led to what it calls a power imbalance between private sector providers and local authority commissioners, reducing local authorities’ control over the type of provision that is developed, where it is located, and the cost. Little wonder that there are increasing concerns about the role of private equity companies in providing residential care, excessive profit levels among the largest providers and the rising sums that councils are having to spend on residential care.

A recent report by the investigative journalist Justine Smith in The House magazine, already referred to by the noble Lord, Lord Laming, provided truly alarming figures, including a 25% hike in prices in just two years, at the same time as 23% profit margins were taken by the biggest operators. The Competition and Markets Authority report also highlighted that the level of debt carried by some of the largest private providers presents a real risk to local authorities and the wider care system. A real concern is that studies have shown that for-profit children’s homes are too often rated of lower quality than other provision types.

We need to introduce a more effective children’s social care commissioning system as a matter of urgency to help reduce the reliance on private sector firms that are carrying large amounts of debt. I can put it no better than the words of Josh MacAlister, chair of the independent review of children’s social care, who said:

“When sovereign wealth funds are investing in your country’s children’s homes, you know there is something very wrong”.


Like the noble Lords, Lord Laming and Lord Wood, I am concerned about the use of unregulated care homes, which is the subject of another recent Observer investigation. It seems to me that something is going very wrong. I would be grateful if the Minister told me what the Government are doing about this.

Sadly, I do not have enough time to talk, as I would have liked, about the Government’s strategy for reforming children’s social care. As I have said before, it is a very much a step in the right direction but does not go far or fast enough to address the scale of the challenge. I would therefore like to finish by asking the Minister a couple of questions. First, the Government’s Spring Budget provided some welcome additional money for extra children’s home placements. It said that the Government were going to develop proposals to combat profiteering in the sector and look at new ways of unlocking investment in children’s homes. Could the Minister please spell out what these proposals are and how quickly they are likely to come into effect? Finally, could she also give a timetable for when the Government plan to publish a children’s social care Bill, which would provide a vehicle to bring forward many of the reforms of children’s social care that this Government committed to in their Stable Homes, Built on Love strategy?