Source · Select Committees · Public Accounts Committee
Recommendation 24
24
Not Addressed
Some private providers of children's social care achieve unacceptably high profit margins.
Conclusion
We raised concerns about the high levels of profits of some private providers.64 The Competition and Markets Authority found in 2022 that the fifteen largest providers of children’s social care had average profit rates of 22.6% for children’s homes, and that their prices increased by an average of 3.5% above inflation each year.65 The Association for Directors of Children’s Services and Children’s Homes Association told us private-equity- owned providers were a particular concern because they were more likely to have excessive profits.66 The Children’s Homes Association told us that most of the small, micro or SME practitioner-led homes do not make vast profits.67 We asked the Department whether suppliers were price gouging. It acknowledged that in some places suppliers make a significant amount of profit.68
Government Response Summary
The Committee raised concerns about the high levels of profits of some private providers. The government's response notes that despite private providers providing most care home places, the Department does not fully understand their financial position.
Government Response
Not Addressed
HM Government
Not Addressed
5. PAC conclusion: Despite private providers providing most care home places, the Department does not fully understand their financial position.