Some private children’s homes are “profiteering” by charging local authorities more than £15,000 a week to look after one child, a council boss has said.
Halton Council said a lack of foster places and other suitable provision had forced it to place more children with private providers at huge expense.
A Children and Young People and Families Policy and Performance Board report said the age of those being placed in care was also becoming younger.
The council’s chief executive said local authorities were being put “absolutely at the mercy” of private sector operators which meant prices were “absolutely sky rocketing”.
The report said the situation in Halton was reflected nationally, with government watchdog Ofsted also raising concerns.
It identified three cases of homes charging in excess of £15,000 a week for single children.
It said all three had ADHD and had suffered adverse childhood experiences, including abandonment, separation and domestic abuse.
The report said that while placement searches continued, none of the children had had any providers come forward to care for them.
On a podcast, Halton’s chief executive Stephen Young said there had been increased demand since Covid and that resources were increasingly stretched, the Local Democracy Reporting Service said.
He said: “I do think there’s quite a lot of profiteering going on and that’s being called out increasingly.
“It’s putting local authorities absolutely at the mercy of private sector operators and that’s seeing these prices absolutely sky rocket.”
A report to the board said the council was looking at a number of measures, warning that it “could not continue” to fund such expensive placements.
According to government figures, the number of private homes increased by 12% in 2023, and 83% of children’s homes were now owned by companies including private equity groups.
Ofsted recently stated it wanted to tackle “excessive” profit-making by private-equity owned children’s homes.
But the Children’s Homes Association, which represents many private providers, previously said it “recognised the challenges” local authorities were experiencing, but added: “Residential childcare is the most complex sector of children’s social care and it is vital to be cautious in oversimplifying high-level cost data.”
