As the number of children in state “care” stands at its highest level since the 1989 Children Act – last year it reached 69,540 in England alone – not one single aspect of our “child protection” system fails to raise disturbing questions: from the bizarre excuses concocted by social workers for removing children from their families in the first place, and the willingness of too many judges to endorse them, to the often horrendous experiences of children while they are in “care”. But one aspect of this system attracting rather closer scrutiny has been the way “fostering” has in recent years become a highly lucrative industry.
The National Fostering Agency, founded by two social workers, was sold in 2012 for £130 million to a private investment firm
Most people would be startled to learn how much of the child protection sector is now dominated by a handful of companies, most of them run by ex-social workers. These companies are paid huge sums by local authorities to make their fostering arrangements. Several have become such big business that they are traded by private equity funds.
A meticulously researched survey by the Corporate Watch website has tracked down the financial details of the seven largest of these companies.
The biggest, Foster Care Associates, is still largely owned by two former foster carers, through a holding company which in 2013 paid its shareholders £9.2 million. In 2014, on an income of £127 million, it paid its owners £7 million, and its highest paid director earned in salary and other benefits £406,000.
The National Fostering Agency (NFA), founded by two social workers, was sold in 2012 for £130 million to a private investment firm owned by an array of bankers and accountants, which also owned a chain of steak restaurants and the Groucho Club. In 2015, the NFA was sold on again to another private equity firm. The price was not disclosed, but the first private equity firm announced that it had “more than doubled” its original investment, suggesting that the NFA had been sold for more than £250 million. Income from foster care was shown in the NFA’s 2014 accounts as £94 million, with the owners receiving £14.4 million and the highest paid director £318,112.
In some ways, the oddest of all the fostering companies analysed by Corporate Watch is Acorn Care, owned by the Ontario Teachers Pension fund. This organisation in 2014 had revenues of £73 million, although only 65 per cent of this appears to be for foster care. This firm, the accounts show, has so far yielded those Canadian teachers a profit of £47 million.
A recent FOI request revealed just how much Norfolk County Council pays to the leading fostering agencies: in 2014-15 it gave the NFA £7,861,788
All these profits ultimately derive from British taxpayers, on top of the generous sums earned by the carers themselves, employed through local authorities, such as Norfolk county council, which two years ago was advertising pay of £590 a week, or £30,000 a year for each foster child taken.
With more than 1,100 children in care, Norfolk has one of the highest figures in the country. A recent FOI request revealed just how much it pays to the leading fostering agencies: in 2014-15 it gave the NFA £7,861,788. Yet for two years running the Ofsted inspectors have awarded Norfolk’s children’s services their lowest possible rating, “inadequate”.
It would be interesting to hear the views of those parents and children caught up in this very strange system.