Government Unveils Plans to Regulate Children’s Home Providers in England
The UK government is set to introduce new measures aimed at preventing excessive profiteering in children’s social care and improving oversight of residential care providers. These reforms come in response to significant challenges in the current care system, including rising costs and complex cases affecting vulnerable children.
Key proposals include:
1. Financial Transparency and Profit Limitations
The government will require large children’s home providers to disclose their financial information. A 2022 report by the Competition and Markets Authority revealed that the 15 largest providers make an average 23% profit annually. If providers do not voluntarily limit their profits, the government will introduce legislation to impose a legal profit cap.
2. Enhanced Regulatory Powers
Ofsted will receive expanded powers to investigate and fine providers, including those running unregistered homes. This comes after revelations of serious issues, such as the Hesley Group case, where over 100 reports of abuse and neglect were logged between 2018 and 2021.
3. Additional Planned Measures
The government’s comprehensive plan also includes:
– Strengthening families’ rights in care decisions
– Requiring multi-agency child safeguarding teams in every council
– Extending support for care leavers until age 21
– Implementing stricter controls on home-schooling for children with protection plans
Challenges and Criticisms
However, experts have raised concerns about the proposed reforms. Andrew Rome, an industry analyst, noted that the largest providers only account for 26% of children’s homes, potentially leaving smaller, opportunistic providers unscathed. He also suggested that gaining financial oversight would be challenging due to complex corporate structures.
The proposals stem from mounting pressures on local authorities. In 2023, councils were paying over £500,000 annually for more than 1,500 children in residential homes, often due to a lack of alternative options.
Stakeholder Responses
The Children’s Home Association (CHA) welcomed the efforts to tackle unregistered provisions but warned that profit-capping could lead to unintended consequences, potentially encouraging providers to adopt more complex financial models.
Paul Carberry from Action for Children supported the plan but emphasized the need for investment in not-for-profit and public sector care provisions.
Education Secretary Bridget Phillipson described the current system as “bankrupting councils, letting families down, and leaving children feeling forgotten, powerless and invisible.”
The government will also address the significant increase in Deprivation of Liberty Orders, which have risen 12-fold in seven years. Children’s Commissioner Dame Rachel de Souza advocates for fewer such orders.
These proposed reforms represent a major overhaul of the children’s social care system, aiming to protect vulnerable children and ensure more accountable, transparent care provisions.
