\n<\/p>\n
Experts have raised alarm over the \u201ccommodification\u201d of vulnerable foster children as analysis reveals almost a quarter of all foster places in England are now provided by private equity-backed companies making millions of pounds in profits.<\/p>\n
Analysis for the Guardian by thinktank Common Wealth found independent fostering agencies (IFAs) are making millions via public funding from councils to provide placements for foster children, while foster carers struggle to pay bills.<\/p>\n
Sacha Hilhorst, a senior research fellow at Common Wealth, said: \u201cIt raises concerning issues around commodification and children becoming these units for profit-making. We are seeing millions of pounds of profits being made, which I think many of us feel uncomfortable about.<\/p>\n
\u201cThere are also issues around instability because as these private equity giants gobble up more and more small providers, they become harder to regulate \u2013 and if they go bust, you\u2019d have lots of children in an absolutely terrible situation.\u201d<\/p>\n
Placements for foster children are paid for by councils, who either provide the placements themselves or outsource them to IFAs, which now provide about half of all places, up from a third in 2016.<\/p>\n
New analysis has shown that the largest four independent fostering agencies are all private equity-backed and now provide almost a quarter (23%) of all fostering places in England, managing 16,365 places.<\/p>\n
In 2023, the parent company of the UK\u2019s biggest provider, National Fostering Group (NFA), made underlying profits of \u00a3104m, with a profit margin of 21%, up from \u00a388m the year before.<\/p>\n
In 2024, NFA had capacity for more than 5,700 fostering places across the country, and made an estimated average ebitda (earnings before interest, tax, depreciation and amortisation) of \u00a3877 per place based on available data. NFA said it did not recognise this figure and that not all foster places were filled.<\/p>\n
Foster Care Associates (FCA), which provides about 5,000 fostering placements, made an estimated average of \u00a31,500 Ebitda profit per place in 2023. Its ultimate parent company made Ebitda of \u00a349.1m that year.<\/p>\n
Matt Western, the Labour MP for Warwick and Leamington, said the profits being made by private fostering agencies were \u201cobscene\u201d.<\/p>\n
\u201cI struggle to understand what added value they\u2019re really bringing to this sector,\u201d he said. \u201cFrom the outside, it appears minimal, and yet they\u2019re making extraordinary amounts of money.\u201d<\/p>\n
Western said he hoped the Department for Education (DfE) would examine the structure and working practices of IFAs, particularly the nature of their relationships with carers. \u201cThis seems to be part of a broader trend over the last 15 years where big money has moved in and exploited entire sectors,\u201d he added.<\/p>\n
Costs for fostering placements are significantly higher through IFAs \u2013 a Competition and Markets Authority report found operating costs per child were \u00a38,400 higher with IFAs than with councils in 2020.<\/p>\n
Katharine Sacks-Jones, chief executive of Become, a charity for children in care and care leavers, said the foster care system was in crisis and there was growing concern about the growth of private equity-backed companies in the sector.<\/p>\n
\u201cWhen you have fewer, bigger providers, that affects the dynamic with local authorities who need those places for children,\u201d she said. \u201cSome of those bigger providers are making really significant profits \u2013 the largest ones, an average of around 19-20% is not uncommon.<\/p>\n
\u201cAt the same time, you\u2019ve got local authorities completely struggling \u2013 we hear all the time about council finances, and children\u2019s social care is a major component of that. The spiralling costs of it. There\u2019s a lot to be concerned about.\u201d<\/p>\n
Robin Findlay, founder of the foster carers\u2019 trade union, said little of what is paid to IFAs actually reaches foster carers. \u201cSay a foster carer is meant to get \u00a3150 for themselves and \u00a3150 for the child so \u00a3300 total,\u201d he said. \u201cThe agency might be charging the local authority \u00a31,000 a week for that same placement.<\/p>\n
\u201cThe rest, \u00a3700, goes to cover their social workers, fuel, light bills, office costs, directors. So the more they can cut costs, the more profit they make.\u201d<\/p>\n
Findlay said the underlying problem is structural. \u201cYou\u2019ve got to ask: why do these agencies exist? They exist because local authorities have failed. They can\u2019t run fostering properly, so they outsource it,\u201d he said.<\/p>\n
\u201cBut instead of paying an agency thousands of pounds, why don\u2019t they put money into recruiting directly? Or just pay existing foster carers better, so they\u2019ll say to others, \u2018I\u2019m doing fostering at the moment \u2013 it\u2019s really good, and look how well I\u2019m supported.\u2019\u201d<\/p>\n
Esme*, who wished to remain anonymous for fear of reprisal, has been fostering for many years. She said she and her partner calculated their earnings at just 80p an hour. \u201cMost foster carers are relying upon universal credit to get by. The fostering system is broken. It involves the extreme exploitation of foster carers\u2019 labour and rampant profiteering \u2013 they\u2019re squeezing every penny from British taxpayers\u2019 money.<\/p>\n
\u201cLocal authorities are over a barrel. The private agencies demand what they like for placements, and the councils end up paying it. Look no further than fostering for why so many are on the brink of bankruptcy.<\/p>\n
\u201cThese enormous profits are being made from the disadvantaged situations of children who\u2019ve lost the parenting they need from any other source. That should be a sobering thought for everyone.\u201d<\/p>\n
Tim Barclay, chief executive of NFA, said: \u201cThrough our network of 31 independent fostering agencies, we provide safe, stable and nurturing homes to around 3,700 children and young adults.<\/p>\n
\u201cWe are incredibly proud that 100% of agencies are rated Good or Outstanding by the regulators. In close partnership with local authorities across the UK, we\u2019re responding to growing demand and increasingly complex needs.\u201d<\/p>\n
He added that the company reinvests funds to increase long-term placements, improve access to specialist services, and deliver training to foster carers, who are paid a tax-free allowance of up to \u00a324,500 per child, per year.<\/p>\n
\u201cIn 2024 alone, we delivered over 200,000 hours of training to employees and foster carers \u2013 45% of which was non-mandatory \u2013 creating over \u00a330m in social value,\u201d said Barclay. \u201cOur administrative costs reflect the infrastructure required to deliver safe, high-quality care, including staffing, ICT, legal, HR and the assessment of new carers \u2013 all of which contribute directly to better outcomes for children.<\/p>\n
\u201cOur accounts are independently audited and publicly available. We remain committed to transparency and to working collaboratively to improve life outcomes for vulnerable children and young people.\u201d<\/p>\n
A DfE spokesperson said: \u201cThis government inherited a children\u2019s social care system failing to meet the needs of the country\u2019s most vulnerable children \u2013 with some private companies shamelessly profiteering off them.<\/p>\n
\u201cThrough our landmark Children\u2019s Wellbeing and Schools Bill, we are cracking down on care providers making excessive profit, investing an additional \u00a325m to recruit new foster carers, and ensuring earlier intervention to keep families together.\u201d<\/p>\n
FC A declined to comment.<\/p>\n
*names have been changed<\/p>\n","protected":false},"excerpt":{"rendered":"
Experts have raised alarm over the \u201ccommodification\u201d of vulnerable foster children as analysis reveals almost a quarter of all foster places in England are now provided by private equity-backed companies making millions of pounds in profits. Analysis for the Guardian by thinktank Common Wealth found independent fostering agencies (IFAs) are making millions via public funding<\/p>\n","protected":false},"author":1,"featured_media":10233,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[311,3119,661,3117,3120,3118,1877,3116],"class_list":{"0":"post-10232","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-social-issues","8":"tag-england","9":"tag-equitybacked","10":"tag-firms","11":"tag-foster","12":"tag-fostering","13":"tag-places","14":"tag-private","15":"tag-quarter"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/10232","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10232"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/10232\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/10233"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}