Private equity controls over half of England's largest child-care providers, report shows

Research by the think-tank Common Wealth shows that private-equity investors now own or partially own 11 of England’s 20 largest fostering and children’s home providers, with the sector’s four biggest agencies accounting for nearly 25 % of placements. Since 2020 these firms have paid more than £205 million in interest to shareholders through high-rate shareholder loans, often between 8 % and 14 %. The study found that roughly one-third of fostering placements and one-fifth of children’s home placements are operated by companies financed by private equity, hedge funds, venture capital or sovereign wealth funds.

Union leader Andrea Egan described the profit-driven model as “obscene” and called for a return to public provision, while Common Wealth’s senior analyst Sophie Flinders advocated banning private profit from public services. The report also noted that the Competition and Markets Authority has previously flagged higher profits and prices in the sector, and the Welsh government has pledged to end for-profit child-care provision by 2030. Calls were made for a temporary pause on for-profit providers and a full audit of illegal homes, with suggestions to use compulsory purchase powers to bring substandard services into public hands.