Scandalous profiteering at the expense of children in care

There is absolutely nothing from which capitalism cannot/will not make a profit. The care of vulnerable, homeless, abused and challenging children used to be in the charge of the state and local authorities. To a certain extent, legally that is still the case.  However, being legally responsible for care is not the same as providing it and, as cut followed cut and local authority budgets were squeezed even harder year upon year, local authority owned, and staffed homes disappeared. 

Care provision for those children is nowadays in private hands and it is obviously based (whatever written charters they want to wave about) on the ability of the care-provider to make the maximum profit from his dealings with (a) the children to be ‘cared’ for and (b) the local authority who will pay him to provide said care.

By December 2019 – January 2020 the situation within childcare had got so bad that Anne Longfield, the then children’s commissioner, was calling on the Department for Education to address the “scandal” of “private firms making obscene profits” by providing residential care for vulnerable children.

Ms Longfield added that the quality of care that these companies provide for children is often poor and that £1m can be spent on an adolescent without improving their life prospects.  She added; “The scandal here is not just the cost of these placements, but what children are getting for this money.”

Enter the pandemic and you have a goldrush of Klondike proportions!

Ofsted, the body charged with checking the suitability of homes and staff along with the safety and general well-being of the child residents, suspended all its routine inspections in mid-March at the request of the Secretary of State and over the next five and a half months made on-site visits to only 29 homes at which there were ‘urgent’ concerns.

Routine inspections resumed in April.  It is reported that 175 new children’s homes were registered by the regulator Ofsted during the first wave of the pandemic last year, mostly without a visit from Ofsted, and with all investigations and enquiries taking place online or by phone.  When visits resumed, serious failings at almost a third of these homes were discovered and at least five closed themselves down before Ofsted could visit.  A new government-backed review under Josh MacAlister, a former teacher, has revealed that these homes constitute ‘almost a third’ of those with serious failings that had been cited for ‘unsafe restraint practices’ or putting children at risk of sexual or criminal exploitation! The conditions at several were found to be so horrifying that Ofsted inspectors blocked the owners from admitting any more child residents.

Both last year and this, the horrors involved in providing so-called care of vulnerable children were initially brought to public attention by the press, namely the Sunday Times and the Times respectively, and they should be thanked for that.  However, these titles are proud defenders of capitalism, and it is almost amusing to see their faux naivety when they write “The director of children’s services at one council said that smaller providers were increasingly being ‘swallowed up by larger conglomerates’ leading to a ‘gradual diminution of standards.” It has to be said that larger groups do not always lead to a diminution of the standards of smaller groups, but anyone who understands capitalism in the least surely understands the inherent movement to monopoly in capitalist economy? i.e., that large conglomerates swallow up small firms to build themselves bigger and to eliminate competition and the danger of being undercut on prices, or, to put it into VI Lenin’s words, “The transformation of competition into monopoly is one of the most important – if not the most important – phenomena of modern capitalist economy” (Imperialism, the highest stage of capitalism, Selected Works. Vol 5, page 15).  

The unnamed “director of children’s services at one council” that the Times journalists quote goes on to add: “One of the concerns for us is whether they’re leveraged upon a level of future profits that is hard to see as being sustainable,” he said. “It feels like we’re on the verge of market failure.

Really?!  They seem surprised that the owners of childcare homes and super-lucrative provision contracts want to keep expanding until they bust.  But, dear journalists and unnamed “director of children’s services at one council”, isn’t capitalism always in a state of driving itself to crisis, to greater impoverishment of the poorest and to war in its mad search for higher and higher profits, looking for a higher yield year upon year, whatever profit has been made this year?  The later articles even mention the case of the Southern Cross care homes for the elderly whose owners borrowed and borrowed to keep expanding until their bubble burst with a cruel bang for residents and staff alike.

Oh well, back to children’s care in Britain during the pandemic. 

During that initial period of the pandemic when councils were fearing a massive increase in vulnerable children in need of care, fees paid by local authorities to private providers rose by 5 per cent to an average of £4,100 per child per week! Children whose behaviour is termed as challenging, i.e., who require more care and more intense staffing levels, can cost as much as £10,000 a week!!!

The big companies – there are around six giants in the field who obtain most contracts – and the small newcomers, who have just seen a big market open up, realise that they need new properties.  It is always the care provider that also provides the property, but there is little in the way of purpose-built care homes and so they come in all sizes and states of (dis)repair.  To cash in on cheaper property prices the new homes are disproportionately built in the North West.  This means often placing children hundreds of miles from friends, family and the surroundings they knew.

Childcare providers who wish to register a home must first give details of key staff, provide extensive policy documents, building suitability and proof of financial viability.  They should also be visited by Ofsted, but, as we have already pointed out Ofsted visits were cancelled temporarily with the exception of where ‘urgent’ concerns existed.

It is now known that many of these homes were in unsuitable premises, using low-paid, over-worked staff with little or no training.  Often the staff were not much older than the residents, many homes did not have an overall manager, and these places were fraught with danger for the children and untrained staff alike. 


The review notes that nearly a quarter of the 176 new children’s homes opened between April 1 and August 31 2020 did not have any form of inspection reports published, they were basically left to themselves, and local authorities pushed children into them because they had very little choice.  The whole system, according to Review Chair, Josh MacAlister, is like a “tower of Jenga held together with Sellotape”.

The review also reveals that i(in 2020) in nearly 135,000 cases where a child was suspected of suffering significant harm they were not put on a protection plan. The figure has risen threefold over the past decade showing quite clearly that the current situation is not some blip caused by the pandemic but a clearly marked path over at least ten years towards total breakdown!  The only guarantee for the children who should be in care is that capitalism will find many cruel and degrading avenues to send them down to make profits from their misery.

Andy Elvin, chief executive of the Adolescent and Children’s Trust  again, correctly pointed the finger at capitalism and those seeking even short-term huge profits when he said “The majority of children’s homes now are owned by three or four private equity houses and they have a business model that’s based on bed nights…because you can charge … upwards of £5,000 a week from the point of view of the people at the top of the tree — the private equity analysts — if you can even get three or four weeks of that fee it was worth it.”

There are lists of individual children put at risk of great harm during the pandemic childcare goldrush and we don’t intend listing them.  Dame Rachel de Souza, the current children’s commissioner for England, said of the cases mentioned in the review that they showed children and the system “being exploited for profit”, adding: “In some cases they’re just downright dangerous. That has to stop.”

Ultimately, there can be no entirely satisfactory solution within the boundaries of capitalism to the problems that leave these scarred and damaged children on our streets, but there have to be steps taken to protect them at least from capitalism’s worst effects until we can put this immoral and deadly cancer-like political system to the death it deserves and has richly earned during its criminal reign.