Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of trends in the level of profit per placement for private children’s homes in England.

The Competition and Markets Authority’s 2022 report on the children’s social care market found that the 15 largest providers of placements for looked-after children were making an average profit of 22.6% on children’s homes.

In addition, reports from Revolution Consulting found that aggregate profits among the top 20 children’s homes providers, measured using the earnings before interest, taxes, depreciation and amortization (EBITDA) method, increased from 18.8% to 19.8% between 2021 and 2022. In 2023, the average EBITDA margin was 19%, although this figure excludes Caretech, the largest provider.

The department’s work to improve the data that both we and local authorities have access to on the children’s social care placement market, and the financial oversight scheme we are legislating for through the Children’s Wellbeing and Schools Bill, will enable greater central government oversight. This work will help us to keep the market under close review.