openDemocracyUK

Social care: sacrificing standards for profit

Well-publicised care home scandals are symptomatic of broader, deeper problems within the national care system. What role does privatisation of care services have to play in causing these deficiencies? 

Stuart Weir
17 July 2012

Rochdale is shaping a sudden surge in concern for children in care.  The media have recently seized on the deficiencies of state care of children but, as ever, the press has an ‘angle’ – the continuing sexual and physical abuse of girls in care by gangs and individual men, epitomised by the case of the gang of nine men jailed for sexual exploitation of vulnerable girls in care in Rochdale.  The revelation that some 23,000 children are being cared for more than 20 miles from their original homes has sharpened this focus of media interest.

The danger of cases such as that in Rochdale continuing is, of course, a dreadful prospect.  However, we need to look behind such incidents to the greater enormity of a system of child care that has failed throughout the lifetime of the welfare state to protect, educate, and care for children in care.  We are not talking Dotheboys Hall here, but there is a chronic shortage of foster parents for the 83,000 children in care in the UK, and some half of the children in care experience more than four care placements.

Children’s homes are an utterly inadequate substitute for good foster or natural parenting.  There is a high turnover of frontline staff who, often trying their best, are poorly qualified, undervalued and underpaid.  The children typically receive a disrupted and poor education, and are at a high risk of being bullied or ‘excluded’. A survey of 16 to 21-year-olds by Barnardo’s found that some 80 per cent of these children in care obtained no GCSEs, and only just over 10 per cent reached the target of five GCSE passes (the national average is 60 per cent). When they leave care, the children are all at greater risk than the average of being unemployed or in low-paid work, being homeless or in prison, turning to prostitution or becoming a teenage parent.

The point of the official guidance that children in care should not be placed more than 20 miles from their home is to encourage and make possible continuing contact with their natural parents, as well as to avoid damaging disturbance to their lives and secure their protection from exploitation.  This safeguard is being breached by the gross reductions in government funds for local authorities and the gold-rush of global and UK private equity firms into ‘the market’.  These predators have moved into areas of low property prices to establish clusters of premises in them; for example, Rochdale (population 205,000) has 47 children’s homes; 14 inner London boroughs (population 3.1 million) have four between them.

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GI Partners, the US private equity group behind the care
home involved in the Rochdale scandal. 

So ‘the market’ is grossly distorted.  Standards are being sacrificed in the name of ‘efficiency savings’.  The private providers make huge profits.  The average annual fee for a child in a children’s home is more than six times the cost of fees at Eton or Winchester, at £200,000 - rising to £378,000 in at least one case. One fund, according to The Times, which has run an exemplary investigation into this ‘market’, has made a return of over 500 per cent in only six years. Sovereign Capital in London bought the National Fostering Agency in 2006 and sold it on this year for £103 million, tripling the original investment.

It must be acknowledged that local authorities have not been good guardians of standards in social care, for children and elderly people alike.  Their subservience to private providers in both spheres is a shocking dereliction of duty, but inevitable under the pressures of government stringency.  Harold Macmillan once famously accused Margaret Thatcher of “selling the family silver” when she began the government privatisation drive.  Governments since then have piled the lives and dignity of countless young and old people into the coffers of unscrupulous private companies. Social care belongs in the public sphere where there is at least a prospect, however distant, of accountability to the public.

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