Recommendation 24

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