Children’s Care Homes: Private Equity

Lord Sikka Excerpts

Tuesday 30th January 2024 Lords Chamber

[Baroness Barran (Con)]

The noble Baroness will be aware that we are investing £36 million in foster care, starting with work with local authorities in the north-east to encourage recruitment of more foster carers. That programme has got off to a very good start. We have also launched the first ever national kinship care strategy, backed by £20 million of investment in the financial year 2024-25.

[Lord Sikka (Lab)]

My Lords, private equity has already devoured care homes such as Southern Cross and Four Seasons, which actually had more subsidiaries than General Motors. Profiteering, asset stripping and tax avoidance are the basic business model in private equity. Studies have shown that private equity in care homes is making profits in the range of between 30% and 40% of the revenues. That is clearly unacceptable and is very poor value for public money. Can the Minister give an undertaking that there will be an investigation into the role of private equity in care homes and healthcare?

[Baroness Barran (Con)]

The noble Lord will be aware that the Competition and Markets Authority has already done a great deal of work in this area and has made recommendations which are behind our commitment to a much clearer market oversight regime. We will bring forward legislative changes to enact that when parliamentary time allows.