It follows a number of scandals in which private equity firms running children's homes were charging high fees to the taxpayer while providing sub-standard care.
Ministers have announced a crackdown on businesses ‘profiteering’ from children’s social care services.
In addition, new rules will require private providers to share their finances with the government, allowing ‘profiteering to be challenged’, the Department for Education said. Spending by local authorities on looked-after children has more than doubled in just over a decade, from £3.1billion in 2009/10 to £7billion in 2022/23, the DfE said.
Education Secretary Bridget Phillipson said: ‘Our care system... is bankrupting councils, letting families down, and above all, leaving too many children feeling forgotten, powerless and invisible.' The DfE said a longstanding challenge in the system is some private providers ‘siphoning off money that should be going towards vulnerable children’.
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