Bridget Phillipson has said the Government will not “hesitate” to cap profits in children’s social care if firms fail to curb their gains, as another MP warned vulnerable children have become “cash cows” for private equity groups.
The Education Secretary said she will “go further and harder” with new caps if care providers drift “towards exploitation in the pursuit of profit”.
It follows a Government “backstop” law pledge, which would limit the profit providers can make, to be brought in if providers do not voluntarily put an end to profiteering.
The watchdog Ofsted is to be empowered to crack down on exploitative providers, while companies will be made to set out their finances in a bid to increase transparency across the sector in England.
The 15 biggest private providers make an average of 23% profit, according to analysis by the Local Government Association, which said there are more than 1,500 children in placements each costing the equivalent of half a million pounds every year.
Spending by local authorities on looked-after children has more than doubled in…
