Private care providers are raking in excessive profits from looking after Norfolk's vulnerable children, senior council officials have warned.
A hard-hitting report into 'profiteering' within children's social care was presented to councillors at Norfolk County Council, with officials revealing some providers were making "super profits" because of limited supply and lack of choice.
Norfolk has around 1,200 looked-after children, with the county council responsible for finding them care, such as in residential homes, through supported living and in foster families.
At a meeting of the council's children, families and community select committee, James Wilson, director of sufficiency, planning and education strategy, said profiteering was a "serious consideration" and the authority was taking measures to try to ensure good value around taxpayers' money being paid to providers.
He said: "What is going on for children's social care, particularly in the world of externally commissioned placements, is that it is not a functioning market.
"The reason for that is we are trying to buy a caring service and local government is the only customer, which you might think would give us quite a lot of buying power, but the key problem is you have to buy the care, you have no choice."
He said if a place needed to be found for a child in an emergency - and in a situation where there is not enough care of the right quality in the right place - then the price had to be paid to deal with that short-notice challenge.
He said: "When you layer on top of that, how some of the private providers, and I stress the some, are operating in a profit-maximising way, then that's a further challenge to this".
Mr Wilson said nationally and "to some extent" in Norfolk, some providers were making "good and quite substantial profits" at a time when council resources to support looked-after children were stretched and under pressure.
"There are private equity-backed organisations buying up care homes, creating care homes and buying up independent fostering agencies," he added.
"What might appear at the brand level to be a well-meaning organisation operating locally is actually backed by a profit-making enterprise at some scale giving dividends to shareholders at the same time as the council is paying really high prices."
Mr Wilson told Friday's (September 11) meeting he did not want to "demonise" the entire care market and said there were "a lot of organisations doing fantastic work" and being "good partners" to the council.
The committee meeting heard how the council was looking to provide more 'in-house' provision and was working to keep families together, so fewer children ended up needing costly care.
He said efforts were being made to recruit more foster carers and to form more partnerships with other councils and providers.
Wendy Atkinson, cabinet member for children, families and SEND, said: "This is a national challenge that requires a national response.
"We want to see greater investment from government, alongside increased transparency, and stronger oversight of the children's care market, to ensure every child can access the care they need, when they need it.
"There is strong cross-party support for this approach and for continued lobbying of government to bring forward further reform of the sector.”
The government has previously warned of profiteering in the children’s care home sector.
Prime minister Andy Burnham last week said: "We do have to be sure that there isn’t profiteering in the system. I think that is where we absolutely draw the line.
"There are good organisations in all sectors, but what we cannot accept is money being taken out, and we actually do see that happening – not just in adult social care, we see it in children’s social care too."
Analysis by the Local Government Association found the biggest 15 private providers make an average of 23pc profit, with more than 1,500 children in placements costing the equivalent of half a million pounds every year.
Share