ChildrenThe cost of the residential care house in England has almost doubled which he was four years ago.
The National Audit Office (NAO) said that the local authority, which spent £ 1.6 billion in residential care in the year ending March 2020, increased to £ 3.1 billion in the year ending March 2024.
public spending Supervision It is branded “market failure”.
Residential care settings include children’s homes and so -called supported housing that can be used to keep older children at home that may be able to live more independently.
Most of these settings are run by private companies, with NAO concludes that many are either owned by private equity firms.
The rest are run by local authorities or voluntary areas.
The NAO report published on Friday said: “There is no restriction on the ownership of children’s homes-our analysis suggests that seven of the 10 providers supplying most homes are finally owned or funded by private equity firms.
“Complex ownership system can make it difficult to understand the financial status of the providers. This includes the profits of tracking providers, whether they re -establish profits, and people with high debt levels are at risk of suddenly getting out of the market.”
The government had announced a pledge of a “backstop” law last year, which could limit the profit providers, if the provider does not voluntarily end the profiteering, it can be brought.
Education Secretary Brijet Philipson said at the time that the government would not hesitate to profit in social care of children, if the firms fail to curb their profit, amid warnings from an MP in Parliament that weak children had become “cash cows” for private equity groups.
The NAO stated that the cost of care does not correspond to a greater gradual increase in the number of children in residential care during the same period.
At the end of March, England had 16,150 children in such settings, increased by 10 percent in four years.
The Watchdog stated that there was a “mismatched” between the supply and demand of the places, which promoted “an increase in a relaxed market and cost”.
It said that the lack of supply to meet the increasing demand has motivated local authorities to compete for places and high costs, and said that private providers are able to choose which children are available at home “based on the level of” necessary support or profit “.
It states: “An effective market will prefer local authorities, reduce the cost and provider profit, with provider to invest and join the field.”
Previous estimates of the competition and the markets Authority suggested that the average profit rate for children’s homes between 2016 and 2020 was 22.6 percent, with the prices above inflation rising.
The NAO said the significant increase in costs for local authorities had contributed to the budgetary pressures of the councils in recent years.
The Watchdog warned that while the Education Department has vowed to change, it has neither determined what “productive and flexible markets” should be seen nor “neither” should collect comprehensive information to better understand the causes of market issues.
NAO chief Gareth Davis said: “Residential care system for children seen is currently not paying value for money, many children are kept in settings that do not meet their needs.
“Local authorities are forced to compete for limited locations in a low-supply market to run high costs.
“Our recommendations are designed to help DFE, and local authorities get better solutions to find better solutions for children while dealing with this market failure.”
Sir Geoffree Clift-Browown, chairman of the Public Accounts Committee, said: “The sky-touching costs for the residential placement of children have already kept additional tension on uncertain local authority finance, with more and more children in unfair settings.
“Coordinated commissioning between supply and demand, insufficient forward planning and mismatch have entered all a relaxed market, as local officials compete for placement and the providers have raised prices.
“Although DFE has taken some steps towards setting up more productive and flexible residential care markets, it should be more timely to apply more decisive measures, ensuring that children are provided at the right cost, right place, with correct care.”
Amanda Hopgood from the Local Government Association – which represents local authorities, stated that “the astronomical cost of care placement also means that there is less money available to the councils which is a strict need for children to help before”.
He said: “We would like to see the greater financial monitoring of the greatest providers, making some huge profits when invested in supporting children.
“In the budget of autumn, the government should ensure that all the councils get enough money to invest the child in long -term investments in family assistance, child protection, and care and care liver services.”