For the past 40 years, successive governments have pushed crucial services out of public ownership and into the private market. Despite the dismal track record of big outsourcing companies failing to deliver on their public service contracts, and overcharging central and local government, opportunities continue for private companies to make money from the public purse.

This is now being challenged by Labour with a commitment to bring vital services back into public ownership and control. Nowhere should this be more urgent than for services that protect and care for children.

Since 2010, Conservative-led governments have coerced local authorities to contract out statutory children’s social services. In 2014, despite wide opposition, regulatory changes were introduced allowing commercial companies the power to take children away from their families along with other child protection services. Companies such as G4S, Serco, Virgin Care, Mott MacDonald and Amey have been hovering around the Department for Education ready to scoop up contracts.

Private firms are making big money out of children's social services | Ray Jones Read more

Privatised children’s social services are already a big moneymaker for commercial companies, with funds that should be spent on helping children and families being taken as profit. Increasingly, the owners of these companies are private equity companies and distant venture capitalists.

For children in foster care, on 31 March 2018, 16,200 (39% of all foster children in England) were in placements arranged through for-profit agencies. A government-commissioned 2018 report found that the average weekly cost to local authorities of each these placements was £823 compared to a cost of £553 for those provided directly by a local authority with its foster carers, and that the private agencies were making a profit of 10.5%. In a year this totals a profit of £73m taken out of children’s social services.

Three-quarters of children’s homes in England are already provided by for-profit private companies. Almost a third of local authorities no longer directly provide any children’s residential care. As at 31 March 2018, 6,990 children were placed by local authorities in private children’s homes. In 2016, the average weekly cost of a private children’s home placement was £3,289. With a profit level of 10% on such placements, the total annual profit would be £110m.

In local authorities in England, 15% of social workers in children’s social services are employed through private for-profit employment agencies, and local authorities are paying £335m a year for agency social workers. Assuming just 5% profit, that would add up to £16.75m, while profits by social worker employment agencies in England from children’s social services are likely to be more than £10m a year.

In total, profits of more than £220m a year are being taken out of local authority children’s services by private companies, including overhead and transaction costs. That is equivalent to local authorities employing about 4,400 children’s social workers – and if each social worker helped about 20 children and families a week, it would mean almost 88,000 more children and families getting help.

But even more importantly, not only are local authorities spending large sums with private companies, they are purchasing poorer quality services at a higher cost.

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Some 84% of children in private children’s homes and 50% of children in private fostering agency placements are not within the area of the local authority. Often, private children’s homes pay their staff less and have fewer staff than local authority homes. Short-term agency social workers may have little knowledge of the children and families with whom they are working. This is not a disaster waiting to happen; it is one that is happening today.

It should be a priority for any government, whether Labour or not, to end the privatisation children’s social services.

For a start, local authorities should have to report how many children are in care directly provided by the council and how many social workers they employ directly. Councillors should also to commit to caring for children within their communities, rather than sending them away.

• Ray Jones is emeritus professor of social work at Kingston University and St George’s, University of London, and the author of In Whose Interest? The Privatisation of Child Protection and Social Work