The care system for children in England represents poor value for money, with a record number living in challenging conditions and often miles from where they grew up, a new National Audit Office report warns. The cost of children’s homes has doubled in the last five years, but the system is “dysfunctional”, the watchdog said.
‘Urgent action’ needed Protecting children in care has become a nationwide problem. “It is a moral failure” that thousands of children are abandoned at critical times in their lives, said a Commons Education Committee report published in July, and “urgent action” is needed to “fix this broken system”.
On a local level, councils are struggling to find suitable placements for children. Many bounce from home to home, with no consistency or stability. “Two in three have a history of abuse and neglect,” said Sky News, and many face continuing problems into adulthood. Due to the “systemic failings” outlined in the latest “damning” report, “those leaving care are three times more likely not to be in education, training, or employment than their peers”.
Profit-run sector The total cost of residential care in England last year was £3.1 billion, almost double the £1.6 billion spent in 2019-20, said the Financial Times. The average cost to local authorities of placements in children’s homes in 2023-24 was almost £320,000 – equivalent to around £6,100 a week. Privately owned companies, often funded by private equity, lie at the heart of the sector. Many charge fees far surpassing the rate of inflation, with some of the biggest providers “enjoying average annual profit rates of 22.6% a year”.
A total of 84% of children’s homes are now run for profit, and because “councils are struggling to find enough appropriate placements”, said the BBC, many private care providers can “cherry pick the children they take, based on how much support they need and how much profit this allows”.
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