Private firms are making big money out of children’s social services

From The Guardian, 5 Dec 2018. The original article can be read here.

By Ray Jones

Companies have colonised social work, with those at the top taking the profits while families in difficulty continue to suffer

Children’s social services have been bitten hard by government-imposed financial cuts since 2010. Politically-chosen austerity has led to poor children and families moving from deprivation to destitution, and the help they might have received has been stripped away. The consequence is more concerns about the safety and welfare of children, leading to a 159% increase in child protection investigations since 2008 and the number of children in council care rising from 60,000 to more than 75,000.

The Local Government Association predicts that by 2020 there will be a £2bn funding gap just to maintain children’s services at what is already a threadbare patchwork quilt shredded by years of cuts. Central government grants to local government have halved over the past eight years. The government intends this trend to continue, despite children’s services budgets already overspending by £800m a year. Services are shrinking but still overspending while the funding pot is being repeatedly squeezed.

But there is another dimension to the children’s social services crisis. The pot is not only being squeezed. It is leaking. What had been a trickle of public funding for children’s services taken as profits by private companies is now a steady stream. The private sector has substantially infiltrated and colonised children’s social services and social work, with big money being made by the owners and senior managers of commercial companies. Just look at what has already happened in England.

Almost three-quarters of children’s homes in England are privately owned and managed, and almost half of all local authorities do not provide and manage any children’s homes. Almost a third of all children in foster care in England live with foster carers provided through private agencies. In 2015, Corporate Watch reported that eight private foster care agencies (there are many more) made profits of more than £40m while also making big payments to senior managers. One of the biggest agencies recently sold itself on to a hedge fund, with its two previous owners likely to have received a substantial financial windfall.

Private employment agencies are also making big money out of providing interim agency social workers, managers, and even whole teams to local authority children’s social services. Almost 20% of children’s social workers in English local authorities are agency staff. Two private employment agencies made millions of pounds in profit in 2016 from providing social workers to local councils and their senior managers were each paid more than £250,000.

The extent to which companies have dug into and captured children’s social work is not only deep but also wide. It includes companies being funded by central government to shape the future education and accreditation of children’s social workers and managing the short-term money the government is making available for “innovation” in children’s social services, trumpeted as additional funding but minuscule when set alongside the real reduction in government grant.

Why should any of this be of much concern? First, money that should be helping children and families in difficulty is instead ending up in the pockets of those who are already rich. This is particularly awful at a time when budgets are being decimated.

Second, it is undermining quality, creating fragmentation and lack of continuity. And the turnover of agency staff means the history of the children and their families is largely unknown to social workers who have little chance of building relationships of trust and care.

Third, accountability and transparency have been blown away. Private companies can hide behind commercial confidentiality. The concept of local authorities as a caring corporate parent is challenged when they depend on short-term agency social workers, themselves largely unknown to the council, arranging and overseeing children’s placements.

Amid poorer services costing more money, it surely would be timely to turn off the tap pouring profits to private companies. The government and senior civil servants may favour the private sector but stopping public funds being taken as private profit is a sensible step to take, and to start to take quickly.