Children’s social care is one of the ugliest failures in British government because everyone responsible can describe the crisis perfectly and still leave it in place.
The Public Accounts Committee set out the scale of the problem in a report published on 16 January 2026. Private sector providers are responsible for 84 percent of children’s homes and 74 percent of places in England. Seven of the ten largest children’s homes providers are owned by private equity. The Department for Education, according to the committee, does not fully understand the financial position of those providers, does not know what constitutes a reasonable price for residential care and needs new legislation just to collect the data it should already have. That sentence should have caused a political storm. It did not.
This is not an abstract market. These are homes for children who cannot safely live with their families. Councils have a legal duty to find them care. When there are not enough suitable places, the council is not a normal buyer. It cannot wait for the price to improve. It cannot walk away. If a child needs a placement tonight, a placement has to be found. Scarcity gives providers all the power.
Scarcity gives providers all the power.
That is how councils end up paying extraordinary fees. The Competition and Markets Authority found the 15 largest children’s social care providers had average profit rates of 22.6 percent, with prices rising 3.5 percent above inflation every year. Costs across the sector have risen 96 percent since 2019/20 to £3.1 billion in 2023/24. Placements costing £10,000 or more per week have risen by 1,150 percent over five years. The Local Government Association has recorded councils’ highest cost placements running from £9,600 to £32,500 a week, with the highest reported placement at £63,000 a week. Some councils now pay £1 million a year for a single child’s placement.
For every £100 of public money spent on the four biggest independent fostering agencies in 2024, £21 was taken as profit. Interest costs for the five largest private equity backed providers run at £102 per bed per week, around 16 percent of the average fee. That money services corporate debt. It does not fund care.
The official language stays soft. Placement sufficiency. Market stability. External residential provision. The reality is harder. In September 2024, nearly 800 children in England were living in unregistered settings that Ofsted cannot routinely inspect. Children are moved miles from home, away from siblings, schools and support networks, because the right local placement does not exist. Every move carries a human cost. Every failed placement carries a financial cost. The system then pays more to repair the damage it helped create.
Private providers will say they are meeting need the public sector cannot meet. Sometimes that is true. Many staff inside these homes do difficult work for modest pay. But the ownership question cannot be waved away. Lord Wood of Anfield told the House of Lords in January 2024 that the market was “completely broken,” describing providers “making high profits in the sector, increasing their margins and carrying large levels of debt, yet expanding their share of the care market at the same time.” When private equity owns the majority of the largest providers in a market built on shortage, the public is entitled to ask whether children’s welfare or investor return has the stronger pull.
The deeper scandal is that the state has allowed vulnerability to become a seller’s market. Councils are cutting early help, youth services and family support while paying huge sums for crisis placements at the sharp end. That is not prevention. It is expensive failure, and it feeds itself: cut early intervention, more children reach crisis, crisis placements cost more, less money left for early intervention.
This site is building a full investigation into who owns the companies charging these fees, what they charge, what profit they extract, what debt they carry and what happens to the children inside the system. Freedom of information requests are being sent to local authorities across England asking for the highest weekly placement costs by year, the number of placements above £5,000 and £10,000 a week, total spend with external providers, the top ten providers by spend, average placement distance, how many children are moved three or more times, agency social worker spend and use of unregistered emergency provision.
Councils carry the legal obligation. Providers hold the capacity. Children live with the consequences. The question is not complicated. Who profits when councils have no choice?