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Away from the glitz of Children in Need, kids’ care homes are being farmed out to tax-dodging firms


BBC Children in Need tonight always grips the public’s attention, but hidden behind the glitz and appeals for donations, the government is making things worse for vulnerable children.

Social workers have been warning for decades about the increasing stealthy privatisation of services for the most vulnerable children in society.

The latest scandal to emerge into the daylight reveals children are being treated like cattle and moved around care homes in England and Wales, with councils routinely inviting private companies to compete for the work because austerity cuts have destroyed their own local services. 

Trades unions, care workers, teachers, MPs and charities expressed concern that children’s care homes are in a state of crisis, with private companies taking over the market and charging councils more than £7,000 a week per child for residential placements — double what it would cost a local authority. 

Labour MP Ann Coffey, who chairs the all-party parliamentary group for runaway and missing children and adults, said: “Children are being treated in a barbaric manner by being randomly auctioned out online to private companies. This chaotic bidding system is not how the care needs of vulnerable children should be met. It is a catastrophic failure working solely in the interests of private providers.” 

The marketisation of children’s homes, 73 per cent of which are now privately owned, is also leading to a concentration of homes in the north-west and south-east of England, due to low operating costs in these areas, according to experts. 

Private equity firms own two of the three largest foster placement providers. Out-of-borough placements for children in care have risen from 2,250 in 2012 to 3,680 in March 2017, leading children as young as nine to go missing after being placed in unfamiliar areas. 

Vulnerable children are often highly disturbed and removing them to the cheapest facility hundreds of miles from family and social contacts increases their disturbing behaviour, prompting them to run away, self-harm or fight others in the care home. 

Staff trying to cope with extremely challenging behaviour are often non-unionised, on zero-hours minimum wage contracts, with poor supervision and little training.

In December 2017 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 former health secretary Jeremy Hunt that they play only a marginal role. 

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

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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