DfE launches Market Interventions Advisory Group on children’s social care ‘profiteering’

The Department for Education (DfE) has launched a new advisory group on the profiteering of private companies from children’s social care, amid concerns about the rising cost of procuring residential accommodation from private providers.

The Market Interventions Advisory Group is to be led by former director of children’s services for Hampshire and Isle of Wight councils, Steve Crocker, who also served as President of the Association of Directors of Childrens Services (ADCS) in 2021/22.

At an Evidence Session with the Education Select committee on 26 March, concerns were raised by local authority representatives on the rising demand for children’s social care, the rising cost of procuring residential accommodation from private providers, and the negative impacts of placing children out of area.

A 2022 report by the Competition and Markets Authority (CMA) said private providers were making “materially higher profits” than would be expected if the market “were functioning effectively”, while some were also carrying high levels of debt, posing risks to the stability of supply.

Stuart Ashley, Director of Children’s Services at Hampshire County Council, warned MPs that although provision may be high cost, it is not necessarily high quality.

In his inaugural speech this month, ADCS President Andy Smith drew attention to the “unacceptable level of profiteering” within some parts of the system.

He said: “I’m not tarnishing all providers with the same brush nor am I referring to the hard-working residential care workers who support and care for our children, I am referring to those businesses that are funded by private equity finance for the sole purpose of generating maximum profit.”

He added: “We have high hopes for the recently announced Market Interventions Advisory Group and stand ready to work with Steve and the government to ensure the money in the system is directed towards meeting the needs of children and young people, rather than lining the pockets of executives and investors.”

Lottie Winson