'Exploitative' children's home profits to be curbed

Plans aimed astatine preventing companies that tally children's homes successful England from making excessive profits volition beryllium acceptable retired by the authorities connected Monday.

It says it volition bring guardant caller measures that volition necessitate ample providers to disclose their finances. If they bash not bounds their profits voluntarily, they volition look a ineligible bounds connected however overmuch they tin make.

The authorities besides intends to fortify the powers regulator Ofsted has to analyse and good "exploitative" children's location providers that prey connected a stretched attraction system.

The reforms are portion of a large overhaul of the children’s societal attraction system, which supports and protects susceptible young people.

The measures travel arsenic council-run children's services are struggling with rising demand, analyzable cases and spiralling costs.

Local authorities accidental determination were much than 1,500 children successful 2023 for whom councils were paying implicit £500,000 a twelvemonth to beryllium placed successful residential homes, with a deficiency of different options being the astir communal reason.

Meanwhile, a 2022 study by the Competition and Markets Authority recovered the 15 largest children's location providers marque an mean 23% nett per year.

The authorities volition acceptable retired authorities successful Parliament connected Monday that volition necessitate large attraction location providers to stock their finances with the government, truthful it tin situation what it describes arsenic profiteering.

This volition besides see a "backstop" instrumentality that would spot a bounds connected those profits, which the authorities tin enactment into effect if the companies bash not bash truthful voluntarily.

The authorities says the measurement volition besides let it guarantee that the largest providers bash not abruptly illness into administration, leaving children homeless.

But Andrew Rome, an accountant and starring expert successful the field, said the 10 largest providers lone relationship for 26% of each children's homes successful England, with galore providers being overmuch smaller.

He told the BBC that this measurement volition miss "smaller opportunists who are charging the bonzer prices for unregulated [or] unregistered services".

Mr Rome besides said gaining oversight of ample providers' finances would beryllium hard arsenic they often run done a web of companies, portion smaller firms whitethorn lone person to disclose constricted fiscal information.

He added that a "backstop" instrumentality to bounds profits was "close to intolerable to plan and police".

The authorities besides intends to springiness Ofsted the powerfulness to contented backstage providers, including unregistered homes, with civilian fines to "deter unscrupulous behaviour".

It accused immoderate providers of "siphoning disconnected wealth that should beryllium going towards susceptible children" from homes that "don’t conscionable the close standards of care".

In September, a tribunal successful Liverpool heard that unregistered children's homes were demanding up to £20,000 per child a week from a section authority. The assembly said it was forced to hold to specified fees due to the fact that it could not find anyplace other to spot the children - contempt it being unlawful to nonstop them there.

Ofsted volition besides beryllium empowered to analyse aggregate homes being tally by the aforesaid company.

The authorities says it is acting connected the proposal of a kid safeguarding panel, which reviewed allegations of maltreatment astatine 3 children's homes successful Doncaster tally by the Hesley Group.

In 2023, the BBC revealed that much than 100 reports concerning maltreatment and neglect were logged astatine the sites betwixt 2018 and 2021. Children were allegedly beaten, locked extracurricular bare successful the acold and had vinegar poured connected cuts.

At the time, Hesley made a 16% nett from the sites it ran.

Ofsted received 108 reports astir the sites, which housed children with disabilities and analyzable wellness needs, but inactive rated them arsenic "good". The regulator and the Hesley Group person some since apologised for the failings, and the 3 homes person been closed.

An adept sheet tasked to reappraisal the incidents said a "major overhaul" of the safeguarding strategy was needed.

Annie Hudson, the panel's chair, said the caller authorities would "go immoderate mode towards tackling immoderate of the systemic weaknesses that tin make the conditions wherever precise susceptible children are abused and neglected".

Education Secretary Bridget Phillipson said England's attraction strategy was "bankrupting councils, letting families down, and supra all, leaving excessively galore children feeling forgotten, powerless and invisible".

The government's different planned measures include:

• Strengthening the rights of families to beryllium progressive successful decisions astir a kid going into care
• Requiring each assembly to person multi-agency kid safeguarding teams
• Requiring section authorities to connection enactment for attraction leavers, including helping them find accommodation, until the property of 21
• Compelling families with a kid who has had a extortion enquiry oregon extortion program for them to person assembly support to home-school them

The BBC understands that the authorities volition besides outline enactment to woody with the emergence successful Deprivation of Liberty Orders, which person accrued 12-fold successful the past 7 years.

These tribunal orders let children to beryllium locked up - successful registered oregon unregistered homes - and are often granted for children who are a hazard to themselves oregon others. Dame Rachel de Souza, the children’s commissioner, says acold less should beryllium granted.

Responding to the government's plans, the Children's Home Association (CHA), which represents providers successful England and Wales, said the caller Ofsted powers that volition "tackle unregistered and unregulated amerciable residential proviso is agelong overdue".

However, it argued the "backstop" instrumentality that threatens to headdress providers' profits "risks superior unintended consequences" arsenic it would "incentivise much providers to follow offshore involvement and debt-driven concern models".

The CHA besides criticised Phillipson's remark that the assemblage was letting families down, saying it was "not progressive with families oregon their decisions" and took successful children "because societal enactment and preventative measures fail, apt owed to section authorities' deficiency of fiscal resources".

Paul Carberry, main enforcement of foundation Action for Children, welcomed the government's plan, but said that "urgent concern successful not-for-profit and nationalist assemblage proviso is required to make stableness and marque definite each kid gets the placement they need".