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Government opposes profits from child protection – why not from care?

Posted on 19/07/2016 by

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Andy Elvin analyses the amount of money made by private organisations in foster care, and asks why the government can't ensure profit is kept from it

This month the new President of the Association of Directors of Children’s Services, Dave Hill, spoke out against Independent Fostering Agencies (IFAs) offering £3,000 “Golden Hellos” to foster carers to switch agencies.

He said: “We think it is very sharp practice because we’re recruiting, training, assessing and approving those foster carers. We just think that is morally absolutely wrong.”

He encouraged ministers to consider Scotland, where laws state fostering agencies which are profit making cannot approve, review or terminate the approval of foster carers.

I have every sympathy with Dave Hill and would urge the English government to look at copying the Scottish legislation, and have urged Department for Education to do just this.

Ed Timpson said recently, in the midst of the concerned responses to the ‘exemption’ clause contained in the Children and Social Work Bill, that the government will not privatise Child Protection”And it won’t, as the private sector wants no part of a service where they operate to a fixed cost but can’t control how much demand will be placed on that service.

Big business

However the care system was part privatised some years ago. It is legal and above board, and it is big, big business. The Sunday Times reported last weekend how two of Britain’s biggest foster care companies, Acorn and the National Fostering Agency, were to merge in an ambitious £400m plan.  

Also Corporate Watch claim that in 2014/15 the eight largest commercial fostering agencies made £41 million in profit between them from providing foster placements to local authorities.

If the children get good foster placements and achieve good outcomes, so what? That’s the argument commercial agencies use. It’s a good point, surely outcomes are everything, and the process and structure are secondary?


This is fine to a point but the profits are excessive and coming directly from cash strapped local authority children’s budgets. Money that could be spent on looked-after children. Also local authorities, charities and not for profit fostering agencies are achieving great outcomes for children without taking out profit.

The practice of using what are essentially bribes to get foster carers to switch agencies is also potentially harmful to children in foster care. Our experience is that moving agencies can be disruptive to carers when the new agency does not turn out to be all it was cracked up to be.

It would be interesting to track carers who switch in such circumstances, how many are still carers for their new agency 18 months later?

However local authorities who pressure carers to come “in-house” and work for the LA or they will move the children in placement also need to desist, again this destabilises good placements for children.

There is also the issue of the different business model between large commercial IFA’s, local authorities and not for profit IFA’s. In commercial operations occupancy of available foster care places is king and managers are judged largely on this. This can lead to a loss of focus on the best interests of the child. The same argument can be levelled at local authorities which desperately try and place children with LA foster carers when a more suitable IFA option is available.

Longer term this rarely saves money and is often not in the best interests of the child.

Profit from care

We need to decide if we, as a sector and a society, are content to allow venture capital to profit from the care of vulnerable children? The Government are seemingly determined to exclude the private sector from the child protection system, so why not the care system? There seems no logic to this demarcation.

Surely the profit that venture and private capital take can be better spent on children in care? Especially as further spending cuts are coming down the line.

The DfE “stocktake” of foster care seems like a great opportunity to do this. It may be that local authorities and charities have something to learn from the private sector about providing efficient foster care services but I see no reason to allow the continued presence of venture capital and overseas pension funds in this sector.

Perhaps Clause 15 could be used to allow a region of local authorities to opt out of allowing commercial IFA’s to provide foster care for them, we could then see if there was any negative impact on outcomes or if foster carers working for LA’s and charities can provide the service without the profit. Or they could pilot new commissioning options seeking to remove the IFA/local authority tension, and minimise profit making from the care of vulnerable children.

Source: Community Care