Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of the adequacy of the fees charged by (a) not-for-profit children's home providers and (b) independent fostering agencies; and whether the proposed financial transparency measures set out in the Department's policy paper entitled Keeping Children Safe, Helping Families Thrive, published on 18 November 2024, will apply to charitable organisations operating in the children's social care sector.

Every child in care should have a safe, loving home which is also value for money for the taxpayer.

However, some local authorities are on the brink of bankruptcy, in part due to the rising costs of spending on children in care which has increased significantly from £3.1 billion in 2009/10 to £8.1 billion in 2023/24. This is all while some providers are making excessive profits despite sometimes providing subpar care for our most vulnerable children.

In their 2022 report, the Competition and Markets Authority examined prices and profits across the children’s social care market and estimated operating profit margins for the 15 largest providers between 2016 and 2020 were 22.6% for children’s homes, 19.4% for independent fostering agencies and 35.5% for supported accommodation.

The department is clear that profiteering from vulnerable children in care is absolutely unacceptable and this is why the department is taking forward a package of measures to rebalance the children’s social care placement market and stamp out profiteering.

The financial oversight measures set out in ‘Keeping children safe, helping families thrive’ will increase financial and corporate transparency among the most difficult to replace providers and their corporate owners.

The scheme will apply to private, voluntary and charity providers of children’s homes and independent fostering agencies operating in England.