Education Secretary: Children in care failed by system, concedes some private providers treat them as ‘cash cows’

By Jamie Roberton

Children in the care system are being failed despite the government “spending an absolute fortune”, the education secretary has told Channel 4 News.

Bridget Phillipson pledged the biggest overhaul of children’s social care “in a generation” to move away from what she said was a “cycle of crisis” costing the country “billions and billions”.

The average spend on residential children’s homes in England and Wales has soared by 137% since 2018, a Freedom of Information request by Channel 4 News has revealed.

Around 17% of responding councils reported a rise in spending of more than 200%.

Ms Phillipson outlined measures in England to clamp down on the profiteering by private providers of children’s homes, to empower multi-agency safeguarding teams and ensure care leavers are supported until they are 21.

The number of looked-after children in England reached 83,630, according to the most recent government statistics – an increase of more than 20% in a decade.

Child protection enquiries also stand at a record-high, with an estimated 600 opened every day in England last year.

Describing her view of the current treatment of children in care, Ms Phillipson said: “It’s a real stain on our society.”

The education secretary admitted that the announced measures would not benefit from fresh funding, admitting she would “like to have gone further” but the economy was “in a terrible mess.”

“We’ve got to change what we do”

Ms Phillipson said social workers were doing a “phenomenal job” under “extreme pressure.”

But asked what those frontline workers would think of her blunt assessment of the current system, Ms Phillipson replied: “It’s just a fact.”

She added: “As a country, we are failing children going through the care system, and we are failing families.

“The reality is we’re spending billions and billions as a country on crisis level intervention which isn’t working with terrible outcomes for children – we’ve got to change what we do.”

She said earlier intervention and support for families was a priority under the reforms, with money diverted into domestic violence, substance misuse and mental health to ”keep children and families together.”

Private providers run 83% of all children’s homes in England, with the 20 biggest independent firms estimated to have brought in over £300 million in profit in 2022.

“Crack down on the excess of profiteering”

The government’s own competition regulator concluded that same year that the UK had “sleepwalked into a dysfunctional children’s social care market.”

The education secretary said it was “hard to escape from the conclusion” that some private providers were treating children in care as “cash cows” as she pledged to tackle profiteering by failing firms.

Asked about the risk of providers leaving the market because of more stringent profit controls, Ms Phillipson said “we’ll do this carefully” but greater financial oversight was necessary.

“Private providers are stepping in and charging extortionate costs to local councils, putting them under enormous pressure,” she said.

“We are absolutely determined to crack down on the excess of profiteering in the sector.”

”When you turn 18, it is like your time is up”

Tayahnay had been known to child protection services for a number of years when she fled Nottingham for London at the age of 16.

The fashion student then became a victim of what campaigners say is the current “care cliff edge”, being told a few months prior to her 18th birthday that she would have to leave the supported accommodation that she was living in.

This was due to so-called local connection test rules – which determine eligibility for support – and forced her off the housing register.

“Most girls when they come up to 18 just want to enjoy their birthday, go out with people, go clubbing for the first time, and kind of just enjoy it normally.

“But coming up to 18 was just nerve-wracking. Every conversation I had revolved around me thinking I was going to be homeless.

”It felt like all power I had, had been basically stripped from me and I just felt really helpless.”

The 18-year-old is now living in a hostel “in limbo” as she fights to be able to continue building a life for herself in London.

The government has promised to take action on local connection rules to better support care leavers.

Asked what else she wants the government to do to improve support for children in care, Tayahnay said: ”When you turn 18, it is like your time is up.

”More things need to be put into place. Care leavers actually want to live the same life that everybody else is living and don’t want to feel belittled because of the life they were forced to grow up in.”

”You can’t separate poverty from what’s going on here”

Ms Phillipson also acknowledged the link between poverty and the numbers of children now being looked after by the State.

”You can’t separate poverty from what’s going on here,” she said, promising that work was underway in the government’s Child Poverty Taskforce.

Pressure remains on Sir Keir Starmer’s government to remove the two-child benefit cap, including from the former Labour prime minister Gordon Brown.

Responding to Ms Phillipson’s plans, a spokesperson for the British Association of Social Workers said: “We welcome today’s announcement to clamp down on profiteering providers of children’s homes, but ministers need to go further, and quicker, because the model is flawed.

“We should be considering a direct model of public provision, where the government holds the burden of risk and lines of responsibility and accountability are transparent.”