Private children’s social care provider registers 20% profit increase for last year
CareTech Community Services charged local authorities £430 million for their services of the course of last year, as increased scrutiny into the children’s social care market continues.
One of the largest providers of children’s homes and foster care services in the UK has announced pre-tax profits of over £60 million last year, financial reports show
Revealed within the company’s annual financial report, the figures show a 20% growth for the period until October 2020, having made £430 million in revenue.
"The report also shows the company now owns a property portfolio worth over £750 million and paid out almost £1 billion in executive bonuses last year."
CareTech, established in 1993, offers nearly 5000 residential places as part of its portfolio of over 550 care facilities, and runs a variety of services for adults, children, and young people in over 300 local authority areas across the UK.
The Care Quality Commission gave the company a 91% rating in its last review in 2019, whilst Ofsted offered a rating of 82% it its report from the same year.
The financial report comes amidst a recent swell of scrutiny into the so-called children’s social care market.
In November last year, the Children’s Commissioner Anne Longfield published a report that found a “broken” residential social care system failing to effectively protect vulnerable children, with hundreds of children unable to access a place in a secure home at all.
Last month, the Competition and Markets Authority (CMA) confirmed that there were ‘clear indications’ that the children’s social care system was not working well. The CMA said it was considering an investigation following pressure from the newly appointed Chair of the Independent Review of Children’s Social Care Josh MacAlister.
Subsequently, the Local Government Association (LGA) called for the Government’s review of children’s social care to consider the impact of increasing private equity and stock market involvement in the system.
Judith Blake, Chair of the LGA’s Children and Young People Board said at the time that independent providers “should not be making excessive profit”, adding: “councils, providers, central government and Ofsted all have a role to play in developing a diverse market that makes sure we have the homes children need.”
Peter Sandiford, Chief Executive Officer for the Independent Children’s Homes Association, suggested that the private sector has emerged in response to issues surrounding local authorities providing the level of service needed and that the upcoming Care Review should focus on all areas providing the best support for children.
“The Care Review provides us with an opportunity to look at how we assess children’s needs when they first come to public attention and explore how we could provide the most appropriate services to meet those assessed needs,” said Sandiford.
“I believe we need to look at how fostering and residential care can work together to ensure that children’s needs are met through having the right placement at the right time. We should also look at how these services can contribute to providing support throughout the child’s minority, whether they are living in their own family or in an alternative, and indeed into adulthood.
“Where significant profits are being made these companies are also shouldering the risk that LA’s shied away from and are, as seen in the reporting by Ofsted, delivering a consistently high quality of service provision for the most vulnerable children,” he concluded.
Speaking on the findings on his Twitter account, journalist Martin Barrow strongly criticised private social care providers making large profits during the pandemic.
“While the rest of the country has been struggling during the pandemic, CareTech has been growing fast and earning lots of money,” said Barrow.
“Private business is exploiting a precarious financial ecosystem and children and families are paying the highest price through abuse, neglect, poor health and lives cut short.”
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