The leader of Swindon Borough Council has welcomed restrictions to what he calls the “extortionate profits” made by some children’s care providers.

The new Secretary of State for Education Bridget Phillipson has announced the government will bring in new laws to prevent what is says is some care providers: “siphoning off money that should be going towards vulnerable children, making excessive profits or running unregistered homes that don’t meet the right standards of care.”

It says: “New rules will require key placements providers - those that provide homes for the most children - to share their finances with the government, allowing profiteering to be challenged. Increasing financial transparency will ensure the providers that have the biggest impact on the market don’t unexpectedly go under and leave children without a home.    

“There will also be a “backstop” law to put a limit on the profit providers can make, that the government will introduce if providers do not voluntarily put an end to profiteering.”

Cllr Jim Robbins says this could help both the children looked after by the council and also its finances, as Euclid Street’s children’s department budget is one of the main pressures on the council’s whole budget over the last few years.

He said: “Looked after children in Swindon deserve high-quality care – and taxpayers must be given value for money. That’s what these reforms are all about.

“Labour nationally is fixing the foundations of a broken children’s social care system after years of neglect and ballooning costs. Today, we are spending far too much money on crisis-level intervention, and some of the most vulnerable children are being failed. That has to change and the work of change has begun.

“Labour will crack down on care providers making excessive profit, tackle unregistered and unsafe provision and ensure earlier intervention to keep families together and help children thrive.”

Cllr Robbins said the average cost paid by Swindon council for an out-of-borough placement for a child is £7,000 with at least two costing the public purse £15,000 a week each.

He was not critical of the providers of those specific placements but added: “There are venture capital firms starting to provide care for children and they are making extortionate profits taking funding that should be used to support the most vulnerable people in society.”

Currently, a projected overspend of £5m in the borough council’s children’s department is the largest single factor in a projected overspend of £8.4m in the council’s £178m revenue budget.

The provision of services to children and families is a legal duty the council must fulfil.

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