John McDonnell MP: Another World Is Possible

Monday, October 22, 2007

Children's Homes - the Latest Target for Private Equity Firms

As a constituency MP and also someone who has worked in local government and for a time in social services I have taken an interest in care services. Most recently I have been raising concerns in my area about the care of the elderly. I have been particularly worried about what has happened to home care since it has been largely privatised and also residential care for the elderly which is now largely provided in private care homes.

However I don't know how but I missed it. Missed the fact that the role of looking after children taken into care by the state has largely been privatised over the last decade. In the Observer business section at the weekend I was shocked to read that 65% of children's homes are now in private hands. Earlier this month I discovered that fostering is now largely under the control of private fostering agencies.

With companies able to charge between £2000 and £4000 per child a week this sector of the welfare state has become an attractive opportunity for profitmaking by the private sector and in particular private equity companies which are always seeking new fields in which a lucrative profit can be made.

Recenty however one of the biggest players, Sedgemoor backed by the private equity company ECI, has gone into administration. This is only three years after its group gave a £20 million payout to its investors. Sedgemoor's childrens homes are now being sold off leading to uncertainties for the staff and for the future care arrangements of the children.

I don't know how we have allowed the care of the most vulnerable members of our society to be privatised and passed over to institutions whose main and overriding motivation is profitmaking.

The Chief Executive of the Adolescent and Children's Trust summed it all up for me when he said "Our concern with private equity firms moving into the sector is that their prime motivation is making a profit not the quality of service they provide. I think it is immoral to want to make money out of children living in care."

I couldn't agree more. I also think it is immoral for any Government to pursue policies which allow this to happen.

posted by John at 8:45 PM | permalink |

11 Comments:

Anonymous Jon Carr said...

It's a saddening fact that the most vulnerable in society - whether young or old - can increasingly receive the care that they not only need, but deserve only if they can be seen to be 'profitable'. When i read these stories i have to remind myself that we're talking about people and not commodities that can be traded for the 'going rate'.

It's about time that we set aside these areas of society - in terms of caring for the most at risk etc from the need to be 'profitable' and into the need to treat people with dignity, respect and compassion - to do what is right - and if that means being unprofitable then so be it!

12:00 AM 
Anonymous h said...

yes I saw that story in Teh Guardian and was very shocked

we have enough money in thi scountry to build teh infrastructure - literal e.g water an dgas pipes. sewers etc and social e.g. car efor our sick and disabled be they children or whatever age. It would all save a lot of problemns in the long run. Of course in teh public sector than can still be abuses etc. but it is much less likely without the profit motive and there are measurees to deal with it for example when I temped inHousing Benefits I notoced it had it's own special fraud department. this is the only way a civiilsed society can go in my opinion. I remember as a child I believed UNICEF's slogan "clean water for all by teh year 2000 -what happened to that?
We can't sort out rich or developing countries without socialism.

It's like cooking - you have to plan ahead! It's not as if teh NHS trusts that have been told off by teh Govt for causing MRSA deaths will face any real sanctions and also what's doen here sadly can't be undone but COULD HAVE BEEN PREVENTED -shame on our gov ernment the PFI merchants.

5:39 PM 
Anonymous Jon said...

One aspect that concerns me about private companies moving into care is about pay also. Scanning the local papers / job agencies the pay for elderly care work is around minimum wage (if not minimum age) probably due to the need for 'profit'. It worries me though, because to look after elderly or young people you want to attract a responsible caring professional to do a good job - most do treat their jobs in the correct manner but obviously some bad apples sneak through when these agencies are looking for staff to work for low wages.

You get what you pay for - low wages, profit making = sub-standard care!

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David Simpson (Upper Bann, Democratic Unionist) Hansard source

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Blogger George Dutton said...

This post has been removed by the author.

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Blogger George Dutton said...

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