Councils have claimed they are being “held to ransom” by private care providers, as it emerged the taxpayer has been paying as much as £63,000 a week for single children’s social care placements.
The extraordinary bill – equivalent to £3.3m a year for one placement – came in new figures from local authorities in England released on Wednesday that showed the number of placements for the care of vulnerable children costing over £10,000 a week has risen to more than 1,500 – equivalent to at least £780m a year. There were only 120 such placements five years ago.
The councils have provided no further details about the single £63,000-a-week outlay but the Local Government Association highlighted it as an example of how the market for children’s social care placements is “broken”.
The president of the Association of Directors of Children’s Services (ADCS) said it demonstrates “profiteering”.
“Local authorities are the sole purchasers of placements, yet are often held to ransom by private providers due to lack of sufficiency meaning costs can be thousands of pounds a week for individual placements for children in their care,” said John Pearce, the ADCS’s president. “It cannot be right that the largest 20 independent providers of children’s social care homes made more than £300m of profit last year, every penny of which came directly from the public purse.”
The exorbitant costs being charged by some private social care providers emerged as another major council effectively declared itself bankrupt. Nottingham city council followed Birmingham city council in issuing a formal notice that it cannot balance its budget this year. Nottingham cited the increased demand for children’s social care as a reason behind its financial peril.
The latest warning came after the Guardian reported last year that one council was charged £60,000 a week to look after an autistic teenager with a mild learning disability. She had a history of violence and was looked after by six dedicated carers.
The LGA is now calling for urgent funding for children’s social care in the upcoming provisional local government finance settlement. It warned the lack of investment in the chancellor’s autumn statement “risked councils’ ability to provide the critical care and support that children rely on every day”.
“The astronomical costs of care placements mean there is less money available for councils to spend on earlier support for children and families,” said Cllr Louise Gittins, chair of the LGA’s children and young people board. “These findings are indicative of a broken market for children’s social care placements, but it doesn’t have to remain this way.”
In March 2022, the government’s competition regulator concluded that “the UK has sleepwalked into a dysfunctional children’s social care market” and warned about the risks of private equity funding in private children’s social care.