Why do we let fostering agencies profit from caring for vulnerable children?

Author: TACT

TACT CEO Andy Elvin published an opinion piece  on The Guardian, which questions why fostering agencies are allowed to make profit out of caring for vulnerable children.

Recent research from Corporate Watch shows that in 2014-15, eight commercial fostering agencies made around £41m profit between them from providing foster placements to local authorities.

This is pure profit. It’s after allowances for foster carers, staffing costs and support services. Who did this money go to? Well, according to Corporate Watch, one company, Graphite Capital, made £14.4m on shareholder loans from the National Fostering Agency, which it owned, and then sold it on. The Ontario Teachers’ Pension Plan accrued £13m from its ownership of Acorn Care and Education. And Sovereign Capital took £1.9m in 2014 alone from company Partnerships in Children’s Services, a group that comprises several foster care agencies.

There is nothing remotely illegal or underhand about any of this.

Meanwhile, in 2014-15, local authorities were making significant cuts and services for vulnerable children were being squeezed. The fact that £41m of public taxpayers’ money, allocated to support children in state care, actually ended up in the pockets of a Canadian pension fund and some seriously rich capital firms is obscene.

Of course, they provided a service for the money. Foster carers (and the overwhelming majority of foster carers are selfless and fantastic in my experience) provided stable, loving homes for the children placed with them. But minimum fostering allowances, which range from £123 to £216 a week depending on location and the age of the child, are still scandalously low given the amazing work foster carers do.

The truth is that £41m could make a transformative difference to the young people these firms care for. It could pay for their university tuition fees, additional tuition, or a deposit on a rented flat. It could pay for their living costs so they could intern like their privileged counterparts.

Should we allow this, should local authorities stand for it? Do we need these firms, must we unthinkingly accept the logic of the market and accept that this is the price of doing business?

The commercial agencies will argue they have improved the quality of foster care. I would argue that charities and effective local authorities are equally adept at doing this – and don’t take millions in profits.

The National Association of Fostering Providers (NAFP), which largely represents the commercial agencies, recently took three local authorities to court in a judicial review to claim their commissioning approach was unlawful. The local government association deputy chairman, David Simmonds, said: “With most councils still maintaining high-quality foster care provision for a wide range of children’s needs despite 40% budget reductions, we will robustly contest this case as taxpayers do not need to be ripped off any further.” Simmonds is a Conservative councillor from Hillingdon, a traditionally Conservative borough. In

In Scotland it is illegal for commercial, for-profit firms to provide foster care. Some companies have social enterprise subsidiaries operating in Scotland but, theoretically, no money is taken in profit. Children are still fostered. Local authorities and charities provide excellent foster carers and no one takes any profit; all the money goes on services for children. So another way is possible, it would be fairly straightforward for similar legislation to be introduced in England and Wales.

Surely we don’t want the care of vulnerable children to be a vehicle for enriching the already wealthy. Corporate Watch concisely told us what goes on, now we will see if the Department for Education and local authorities are listening.