The Government is introducing new reforms to stop children’s home providers in England from making excessive profits, by requiring them to share financial information or face limits on their earnings.
LGA analysis found that the biggest 15 private providers make an average of 23 per cent profit, with more than 1,500 children in placements each costing the equivalent of half a million pounds every year.
Further plans for funding for children’s social care – including investment in preventative services – are due to be set out in the upcoming provisional local government finance settlement.
Cllr Arooj Shah, Chair of the LGA’s Children and Young People Board, said: “It is positive to see the Government… pursuing an approach rooted in what we know works for children and their families.
“We are particularly pleased to see an ongoing focus on early help and family networks, and a strong commitment to tackling profiteering and other problems in the market for children’s social care placements.
“Moving forward, progress will be limited by the significant funding and workforce challenges within children’s social care, councils, and among partners more widely.
“It is vital that the Government uses the forthcoming Spending Review to ensure that all those working to keep children safe and to help them thrive have the resources they need to do that well.”