In this post I explore the role of the private sector in children’s homes, the standard of care they provide as well as the connection between private equity and large providers of children’s homes.
Children’s homes run by the private sector
According to a recent Ofsted report, the number of children’s homes in England run by the private sector is on the increase.
From the same report we learn:
79% of all children’s homes are run by private companies, while 16% are managed by local authorities
The number of homes run by the private sector has increased by 8%, from 2,096 homes in 2021 to 2,264 in 2022.
This was a smaller increase than from 2020 to 2021 (12%).
By April 2022, private children care homes accounted for 30,000 places, with the top 21 companies accounting for 42% of all homes.
While there’s an argument that without the involvement of the private sector, local authorities could be overwhelmed and not be able to provide children’s homes in sufficient numbers (and quality), we need to be mindful of too much power given to a handful of companies.
One company, CareTech Holdings PLC, accounted for 10% of all private children’s homes.
At the other end of scale - single home providers - only account for 13% of children’s homes in the private sector.
How good are privately-run children’s homes?
In terms of inspection outcomes for privately run children’s homes, here’s how it breaks down.
211 (11%) were graded outstanding
1,327 (66%) were graded good
415 (21%) were graded requires improvement to be good
54 (3%) were graded inadequate
This means that almost 25% of privately run homes are rated as either ‘Requiring improvement’ or ‘Inadequate’. This compares with schools where the percentage of schools graded like this is 12% (Ofsted).
Within homes graded as inadequate, The Guardian’s review of Ofsted reports has uncovered examples of poorly trained staff, chaotic management and a series of incidents that left children’s safety in danger.
The connection between private equity and large care companies
There is also a worrying link between those high profits and poor care provided by some large private providers.
Anntoinette Bramble, chair of the Local Government Association’s children and young people board, said: “The Competition and Markets Authority has confirmed our own findings that private equity providers are making extremely high profits and carrying concerning levels of debt that risks the stability of homes for children in care, which is paramount if they are to thrive.”
Our view
While we accept that private provision is part of a balanced portfolio of care provision, it is vital that large providers, especially VC-backed companies, are held to account for significant drops in the quality of care they offer.