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Public Services The creeping entry of privateers into child welfare services

A SNEAK government announcement just before Christmas revealed that private companies received £8.52 million of government funding as part of changes to social workers’ employment. 

The controversial new accreditation process has already been criticised by social workers and local government bosses as too costly, unnecessary and undermining professionalism.

The accreditation test for social workers has been mired in controversy since it was first announced at a time of local government cutbacks. 

The government has faced a backlash over private-sector involvement in the test’s development after it was announced private consultancies KPMG and Morning Lane Associates would design the assessment process. Some 60 per cent of social workers surveyed by the British Association of Social Workers are against the new system. 

In addition to undermining social workers, the government’s slashing of local authority social work budgets over the past five years has eroded their capacity to run residential care. 

It’s a classic case of running down a public service to the point of failure and then justifying privatisation as a solution. 

Councils receiving poor Ofsted inspection reports would have troubleshooters parachuted in, ostensibly to help turn services around. But the hidden agenda is to soften them up for eventual privatisation. 

New regulations have allowed companies such as G4S, Serco and Virgin Care to legally bid for work within children’s social services once they create a not-for-profit subsidiary company. 

The original private-sector company would be able to charge the subsidiary for costs, therefore garnering profit from children’s services. 

With cuts in funding, local authorities are struggling to fulfil their statutory duties to ensure child protection and other children’s social services. The fear is that cuts may force them to go with cheaper alternatives, such as external bidding companies. 

There is also added concern that private-sector companies would use their not-for-profit subsidiaries to place children in care that was beneficial to them financially, rather than what was best for the child’s development. 

For example, private equity firms own two of the three largest foster placement providers and 65 per cent of residential homes for children are now run by the private sector (only 11 per cent are run by charities).

Laing Buisson, the research analysts of private health and social services, recently provided an insight into this market. 

Their most recent report on the children’s social care sector offers plenty of encouragement for investors. 

In recent years outsourcing to private children’s homes rose 8 per cent to 67 per cent, “encouraged by capital shortages,” and this “momentum still has some way to run.” 

Privatising children’s care will herald a return to the Poor Law, with state institutions and practices overwhelmed by the most intractable, complex and labour-intensive work, leaving quick-fix, easy-to-solve problems to profiteers. 

The long-term consequences for social policy will be disastrous, cheating a generation of children of good-quality state provision and leading to deprived areas becoming even more socially excluded. 

Councils in Doncaster, Richmond and Kingston are experimenting with creating private companies to run social care while Staffordshire and Bristol have allowed groups of social workers to set themselves up as independent practices separate from local authority control. 

The College of Social Work was abolished two years ago, removing a further obstacle to privatisation. 

When it was set up in 2010, after the controversy sparked by the death of 17-month-old Peter Connelly, the outgoing Labour government said social work needed an authoritative voice. 

Like the royal colleges in the health sector, the College of Social Work was intended to help give the profession the standing it deserves and the status it needs to influence national policy-making and public debate. 

The news about social work accreditation follows shocking revelations in December that Richard Branson’s Virgin Care won a record £1 billion of NHS contracts last year, as £3.1bn of health services were privatised despite a government pledge to reduce the proportion of care provided by private companies. Many of these contracts are for vulnerable children’s services. 

Overall, private firms scooped 267 — almost 70 per cent — of the 386 clinical contracts that were put out to tender in England during 2016-17. 

They included the seven highest-value contracts, worth £2.43bn between them, and 13 of the 20 most lucrative tenders. 

Virgin’s £1bn haul means it now has over 400 separate NHS contracts. The £3.1bn in contracts, a big rise on the previous year’s £2.4bn, prompted concern that profit-driven companies are increasingly involved in delivering care, in a development that undermines repeated assurances by the Health Secretary Jeremy Hunt that they play only a marginal role. 

“These figures clearly show that privatisation has a strong momentum within the NHS,” said Paul Evans, the director of the NHS Support Federation, a campaign group which monitors the privatisation of NHS services and which produced the report. 

“The doors to private-sector involvement in the NHS remain open despite promises to move away from market-based approaches by NHS leaders and politicians. Privateers continue to win huge new NHS contracts.”

Virgin Care’s role has prompted particular anger among anti-privatisation groups. It pays no tax in Britain and its ultimate parent company, Virgin Group Holdings Ltd, is based in the British Virgin Islands tax haven. 

In addition, it came under fire for suing six clinical commissioning groups in Surrey, NHS England and Surrey County Council last year after losing an £82 million contract for children’s services to a rival bid involving a local NHS trust and two social enterprises. A settlement of the action appears to have involved the six CCGs paying Virgin an undisclosed sum. 

The private sector’s £3.1bn of wins last year represented 43 per cent of the £7.2bn of contracts tendered by the NHS for services, including babies’ health and out-of-hours GP care. 

That dwarfed the £2.55bn (35 per cent) of tenders won by NHS trusts and £1.53bn (21 per cent) by not-for-profit organisations, including charities. 

Steven Walker is a Unicef Children’s champion and author of Safeguarding Children and Young People (Russell House Publishers).

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