Private Companies Have No Place in Children’s Social Care

The growing involvement of private capital in the provision of children's social care is a sinister force – one that reduces kids in need of support to opportunities to turn a profit.

Ofsted figures show that just ten companies own 33% of private children’s homes. Credit: Catherine Falls / Getty Images

Michael Gove has always said the quiet parts out loud. In September’s ‘Gove leaks’ we heard a familiar bigotry, only in a more determined, pubescent lilt. It was this same performative elitism that characterised his time at the Department for Education. In a speech to the NSPCC in 2012, he hit out at an apparent left-wing bias in children’s social work training:

‘In too many cases, social work training involves idealistic students being told that the individuals with whom they will work have been disempowered by society. They will be encouraged to see these individuals as victims of social injustice whose fate is overwhelmingly decreed by the economic forces and inherent inequalities which scar our society.’

These words were used to introduce a new social work training scheme, Frontline. Frontline was designed to be an explicitly ‘elite’ training route, fast-tracking graduates into the specialism of child protection, where they would work with children judged to be experiencing or at risk of harm.

It was also a rebuke, both ideologically and financially, of traditional social work courses and their more expansive focus on social justice. This approach proved palatable to corporate backers, who have pumped funds and pro-bono support into the charity ever since.

A founding partner of Frontline was management consultancy Boston Consulting Group (BCG), who in 2019-20 alone provided £568,000 in financial support. The opaque banner of corporate social responsibility obscures more than just tax, with the private sector becoming emboldened in its efforts to direct policy: BCG has its own foundation, the Centre for Public Impact, which it has modestly tasked with ‘reimagining government’. In 2019, the CPI and Frontline worked together on a report calling for major reforms to children’s social care.

In their 2019 manifesto, the Tories promised a review into the care system for children and young people. Like the review in Scotland then underway, this was expected to be focused on support for children living apart from their birth parents, which would have meant looking at systems of fostering, adoption, kinship, and residential care, as well as at the social work and legal practice that surround them.

What was in fact announced earlier this year was a ‘once in a generation’ review of the entire system of children’s social care. Its remit included everything from early intervention services through to services for all children judged to be ‘in need’ or at risk of harm.

Given that this review is chaired by Frontline’s founder, Josh MacAlister, there are significant concerns around vested interests. His contract with the Department for Education includes a clause stating that additional funding cannot be assumed, raising questions about where the money will come from.

As in the NHS and adult social care, privatisation will not happen in one fell swoop. Socialists must first understand why corporations like BCG position themselves as they do, before considering how we can resist capital’s march upon these essential services.

A short answer is that there has never been a better time to hold this influence. In the past five years councils have overspent on their children’s services budgets by over £3 billion, while just last year, the six largest private providers of private residential or fostering placements made £219 million in profit. This drain on council resources extends to staffing, with employment agencies exploiting crises in recruitment and retention.

As ever, capital continues to contort itself, looking for new fixes to extract profit from a failing system. Once services capitulate, the language of public-private partnerships becomes one of sensible pragmatism. In the heady reforms that followed Gove’s speech, the country’s Chief Social Worker tweeted that responding to those concerned about privatisation was ‘like living in Animal Farm. 4 legs good. 2 legs bad.’

Our first response must be to lean into these binaries. Gove’s caricature of a social worker speaks the truth; economic inequality is the key driver of demand for social work services. The market is attracted to this demand, and no amount of talking tough will make the welfare of children come before profit.

Unlike children’s lives, private equity firms tend to work in three-to-five-year cycles. Cartelisation is built into this system, with recent Ofsted figures showing that ten companies own 33% of private children’s homes. Smaller providers are swallowed up, before being rapidly restructured and sold on. The human impact of this is often in costly, remote and unregulated placements, where a bare minimum of care is provided for vulnerable young people.

As in the care home market for adults, leveraged buyouts are routinely used to purchase fostering agencies. This means using finance from a number of bonds, secured against the assets of the agency. Restructuring becomes necessary to generate enough income to service the debt and its interest—and as human services are volatile, cuts to wages and staffing levels become a reliable means of gaining the confidence of the market.

It was against this backdrop that the IWGB’s successful campaign to secure Article 11 rights for foster carers was so significant. With four out of seven of the largest fostering agencies holding more debts and liabilities than tangible assets, volatility is built into the system. The fight continues in securing greater rights for these workers, and resisting the short-termism built into financialised models of care.

Councils hold wide responsibilities toward children in need of support and protection. This includes services for children with disabilities, for homeless teenagers, and for families with no recourse to public funds. One of the many criticisms of so-called ‘social impact investing’ is that the market can act selectively in what it funds. Mechanisms such as social impact bonds require the quantification of social outcomes, so that investors can be sure of the likelihood of returns. This leads to a disproportionate funding of individualist, behaviour-centred interventions, such as services to reduce rates of youth reoffending.

In The Care Crisis, Emma Dowling jokes that anyone using the word ‘community’ should do so with a disambiguation notice. It is in the interests of capital to strip this term of any radical connotations. A common thread runs from Thatcher’s ‘living tapestry’ of support, to Blair’s Third Way, and Cameron’s ‘compassionate conservatism’: their vision is of a society reliant upon the ‘free gifts’ of unpaid care work and those who disproportionately carry it out.

The reason this matters is because another vision, another society, could exist instead. If we are serious about giving power to communities, we cannot be serious about market-driven investment. To paraphrase Nancy Fraser, capitalism expands and then eats its own tail, devouring the social capacities that sustain the economy. The only services left palatable to investors are those that blame the individual, as inequality and disadvantage become a revenue stream.

For all of their attempts to obscure, and to colonise a sensible middle ground, the answer remains simple. The market can have no place, and every encroachment provides a context for resistance. Organising within communities is central, forging alliances between those who use services, and those who provide unpaid and paid care. This system cannot be regulated, or repaired: we must rebuild from the ground up.