Council concern over extent of private equity role in fostering agencies

Councils are growing alarmed about the activities of private equity firms which are buying up small fostering agencies, it has been reported.

The Local Government Association has expressed concern to the BBC that since three groups account for 45% of funds spent on independent fostering by English councils there could be a shortfall in provision were one to fail.

More than 75,000 children are in care in England, compared with about 60,000 a decade ago. Most are in foster care either directly with councils or through independent agencies commissioned by them.

The National Fostering Agency, Compass Fostering and Foster Care Associates are now the dominant providers and are backed by private equity, a BBC report on the issue has said.

LGA deputy chair David Simmonds said: “A number of companies have gone out of business in the social care sector, care home providers principally - because they've gone down this path of consolidation and ever-increasing profit and it's led to trouble.

“Local authorities will be looking at recruitment and retention of our own in-house foster carers to make sure that we're prepared to deal with that situation effectively and efficiently.”

Councils are also concerned there would be little competition and the groups could raise prices.

The National Association of Fostering Providers said its memebrs played a vital part in supporting vulnerable children, and that local authorities were unable to keep up with demand.

Mark Smulian