Question to the Department for Education:

To ask His Majesty's Government what assessment they have made of profiteering among private agencies, particularly those operating as private equity-owned children’s homes; and whether their proposed financial transparency measures will be sufficient in view of the complex financial structures often used by such organisations.

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

In their 2022 report, the Competition and Markets Authority estimated that the operating profit margins for large children’s social care 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 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’, setting 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, covering children’s homes, independent fostering agencies and supported accommodation. 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, the department will not hesitate to take action to cap providers’ profits.

The department will bring forward legislation when parliamentary time allows.