Care companies 'profiteering' as council costs soar

Costs of caring for five vulnerable children hit £3m a year as companies "profiteer" from providing specialist services, a council's deputy leader has said.

West Berkshire Council overspent by £9.3m for the first three months of the financial year, in part because of the need to pay for some children's specialist care and increasing demand.

Deputy leader Heather Codling said companies are taking advantage of councils being unable to provide the services themselves.

The authority will get £5m in exceptional financial support from the government over the next two years to create a single point for families and carers to access support for special educational needs provision and other services.

The council said it had 24 children in care placements across the country that were costing an average of £500,000 a year.

"These are children that we absolutely have to protect, we want to protect and they are very vulnerable young people," Codling said.

"I believe there are many companies profiteering on that because of the lack [of spaces].

"Due to the lack of space we have, local authorities don't run their own children's homes. We have to buy in that service.

"Those children go into these care homes and the companies that run them make a lot of money. But some of those children are incredibly vulnerable and need two or three [staff] to care for one child."

She said the council is lobbying the government to ensure the market is better regulated "so huge profits are not being made".

It is also working with other nearby councils to see if they can work together to reduce their care costs, Codling added.

Last year, the National Audit Office (NAO) said the cost of residential care for vulnerable children in England nearly doubled in five years but many of them did not receive appropriate care.

The NAO said authorities on average spent £318,400 on every child placed in a children's home in the year ending March 2024.

Its report took work that showed that the 15 largest providers of children's homes were making average profits of more than 22%.

The government has already says it plans to limit the money providers can make.

But the Children's Homes Association, which represents providers paying tax in the UK, said council-run homes can be more expensive.

It said their services can demonstrate better value for money for authorities.