Local Authorities pay up to £1m per child in private children’s homes

Topics covered: adult social care, children social care, Department of Health and Social Care, local authority

On 19 April 2022 The Guardian published an article revealing that some local authorities are paying substantial costs for children to be placed in a privately run children’s care home.  Private providers have defended these figures, citing the rising cost of living alongside high staffing levels needed for complex children as justification for the costs.

Why so much?

Private child care providers are facing suggestions that they are making ‘obscene’ profits. This has been evidenced by one local authority who was quoted £50,000 per week, amounting to £2.6m a year for a single child. Steve Reddy, the director of children’s services in Liverpool said his council recently turned down a provider quoting £30,000 per week stating, “Some of the profits being made are frankly obscene.” A private children’s home will typically involve dealing with children with complex needs such as behavioural problems, autism spectrum disorders, or being a danger to themselves or others. As such, many of these children need constant high level supervision from numerous care staff. Local Authorities have admitted that in some instances, a child will need a carer 4:1 ratio, with four specialist staff to one child, which is expensive to maintain. Mark Kerr, the deputy chief executive of the Independent Children’s Home Association, said:

“Such high-level needs and risks require significant specialised care 24 hours a day to ensure they are kept safe and their needs are met. It is important to note such levels of need are often a result of previously failing to invest in the right provision at the right time.”

However, in contrast to private providers’ estimation and fees, the Ministry of Justice has stated that it costs just £270,000 a year to maintain supervision of a child in a state-run children’s home, which is significantly lower.

Calls for future changes

Steve Crocker, the president of the Association of Directors of Children’s Services (“ADCS”) said:

 “A comprehensive national placement strategy is needed to ensure the right homes are available in the right places. ADCS has previously called for the introduction of legislation which prevents for-profit operations, or as a minimum caps the level of fees chargeable, in fostering and residential services. Whilst this will take time to achieve, ADCS is committed to the aspiration of moving to a not-for-profit model.”

Furthermore, a Department for Education spokesperson said:

“We commissioned an independent review of children’s social care, which will set out to radically reform the system, and are working hard to raise standards for children in care while it continues.”

The terms of reference for this independent review of children’s social care were published in January 2022.




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