Union founder slams private equity milking foster care for profit

Founder of the National Union of Professional Foster Carers, Robin Findlay, has called out private equity ownership of foster care services in the UK.

Shameless profiteering

According to the Observer, Findlay said:

Private equity is looking at this as a goldmine that should be tapped into and it’s bleeding the sector of money… on the back of vulnerable children.

Stirling Square Capital Partners, Cap10 Partners, and CapVest own the largest share of the provision of foster care for children in England. They are all private equity companies and the bosses, who extract profit from children needing care, generate £13m in annual profits.

A privatised foster placements can cost around double the amount than a local authority place — with prices hitting approximately £50,000. As the state is not providing for vulnerable children, councils are left with no choice but to pay higher fees for private providers.

Privatisation is branded as ‘efficiency’, yet it’s costing councils double. In the process, children are treated like commodities by large asset management firms concerned with wealth accumulation. In fact, the Competition and Markets Authority said in 2022 that private equity firms profits, averaging 19 percent, are too high.

Foster care should ultimately be brought in-house. At the moment, it’s publicly funded while the private sector continues to profit. The lack of planning also means that lots of children are sent 100 miles or more away from their hometown.

With such issues in mind, Wales has moved to ban profiteering companies from providing foster care.

The top-line

The top three firms generated a combined profit of £40m from foster care in 2023.

Stirling Square Capital, which owns National Fostering Group, made a profit of £23.4 million for the year to August 2023. CapVest, which owns Polaris Community, which turned a profit of £14.1m. Then there’s Cap10 partners, owner of Compass Community, which profiteered at £3m.

Taking resources from children certainly chimes with the community spirit. Private agencies profit from homes for around one in three children in foster care. And the public purse is footing the bill.

This has to stop.

Featured image via the Canary