Question to the Department for Education:

To ask the Secretary of State for Education, if her Department will take steps to ensure that private firms do not profit from out of area looked after children's residential care placements.

The needs of the child are paramount when deciding the right care placement. Though the department wants to reduce out of area placements, they will always be part of the care landscape. Sometimes circumstances make it the right decision for a child to be placed elsewhere, for example when they are at risk from domestic abuse, sexual exploitation, trafficking or gang violence.

Moving a child away is not a decision to be taken lightly and there are legislative safeguards around this. Directors of children’s services are required to sign off each such decision and Ofsted can challenge where they believe poor decisions are being made. This is to encourage local authorities to place children locally wherever possible.

The department is clear that profiteering from vulnerable children in care is absolutely unacceptable, irrespective of whether a child is placed in or out of area, and the department is committed to stamping out profiteering where it occurs in the children’s social care placement market.

On 18 November 2024, the department published its policy paper ‘Keeping children safe, helping families thrive’, which set out ambitious reforms across children’s social care. As part of these, the department is taking forward a package of measures, including through legislation, to rebalance the children’s social care placement market. These measures will improve competition, regulation and commissioning of placements and bring greater visibility to the prices local authorities are paying and the profits providers are making. If the department does not see a reduction in profiteering it will not hesitate to take action to cap providers’ profits.