scottish councils

Councils spent £200m on profit-making residential care providers for children and young people

Scottish councils have given up to £200m to private firms to provide residential care for children and young people, despite promising to move away from the practice four years ago.

Campaigners raised concerns about the “scale to which profit-making companies are benefiting financially from the care system” and opposition politicians called for more homes that offered quality care and value for money. 

According to the independent care review’s final report – launched on 5 February 2020 and known as the Promise – there is “no place for profiting in how Scotland cares for its children”. Regulatory bodies must “scrutinise any presence of profit” and make sure funds are “properly directed to the care and support of children”, it added then. 

Following publication of the 2020 report, all 32 local authorities pledged to keep “the Promise”. The aim is for all its recommendations to be fully implemented by 2030.

Using freedom of information (FoI) law, charity Who Cares? Scotland, asked each council how much they spent on residential care since the Promise was published. Twenty-six out of 32 responded.

Residential care across Scotland

Four local authorities – Angus, Dundee, Moray and Shetland – confirmed they had stopped using profit-making companies. A further two said they had plans to do so. Five said they did not record the data.

The remaining 15 councils who responded, collectively told Who Cares? Scotland they spent £218m on privately run residential homes.

Aberdeenshire council responded to the FoI to say it had spent £50m. But when approached by The Ferret it said that figure was spent on out-of-area care and would include other local authorities as well as private providers.

Other high spenders included Falkirk Council, which spent £43.5m, and the Scottish Borders, which spent more than £26m. Councils noted the “pressure” to find residential care across Scotland.

Private companies used by councils in Scotland include CareTech, which operates 14 Spark of Genius homes across Scotland. 

The vast majority of CareTech’s services (93 per cent) have been rated adequate or above by the Care Inspectorate. However, last May “serious concern” was raised by the regulator about “the conduct of a staff member towards a young person” at its Woodside Farm home in Ayrshire.

A CareTech spokesperson said a new manager has been appointed and stressed the home “continues to deliver good outcomes for the children and young people”. 

Other profit-making companies include Care Visions, which has 30 homes across Scotland, and Common Thread, which has 11 homes.

It is really concerning that four years on we have uncovered the scale to which profit making companies are benefiting financially from the care system. 

Louise Hunter, Who Cares? Scotland

Who Cares? Scotland is publishing a “report card” on Monday – the fourth anniversary of The Promise – charting the progress made. It will include details of the number of children in care excluded from school, success in keeping siblings together, as well as the use of restraint on children in care.

Louise Hunter, chief executive of Who Cares? Scotland said: “It is really concerning that four years on we have uncovered the scale to which profit making companies are benefiting financially from the care system. 

“At the same time that local authorities are having to make budget cuts, it’s difficult to see how some of this money is being invested. The Promise was quite clear this has to end. “

Council insiders told The Ferret that the weekly cost of privately run homes and schools could be thousands of pounds more than local authority ones. Other concerns included inconsistent quality of care and less stability if companies are forced to close a home.

However, a report by the Competitions and Markets Authority found “no real differences” in quality or price between council and private providers. It said it would take time to move away from private providers due to a shortage of places. 

Fraser McKinlay, chief executive of The Promise Scotland – the organisation overseeing the Scottish Government’s flagship children’s care system reform, agreed change was “not quick or easy”.

He added: “The fact that some local authorities can avoid using private, ‘for profit’ residential homes is welcome, and shows it can be done. But these overall figures are concerning and serve as a stark reminder of how far Scotland still has to travel in its efforts to keep some aspects of the promise.”

He called for greater investment to help support families to stay together, reducing the need for residential places. 

Money is already short so we need to use tight resources to get the best for our young people.

Willie Rennie MSP

Last month The Ferret revealed The Promise Scotland had spent almost a third of its budget on external costs, including consultants paid £1,000 a day.

Willie Rennie, Scottish Liberal Democrat MSP for North East Fife, said profiteering from the sector would be “wrong” adding: “We need to improve the range of high quality establishments which provide value for money and high quality care. Money is already short so we need to use tight resources to get the best for our young people.”

A spokesperson for the Convention of Scottish Local Authorities (COSLA) said significant progress on the ten-year plan for change had been made so far, both locally and nationally.

They added: “We are keenly aware of our responsibilities in ensuring Scotland’s keeps The Promise and will continue to work collaboratively with Scottish Government, The Promise Scotland and other vital partners to reach our shared aims and ambitions.”

A Scottish Government spokesperson said: “The Promise is clear that there is no place for profiting in how Scotland cares for its children and the Scottish Government supports this principle.”

‘Restraint has no place in modern Scotland’

Local authorities across Scotland have restrained children and young people in care over 2,000 times since The Promise was launched in February 2020, according to figures shared with The Ferret.

In 2020 The Promise said that Scotland must “strive to become a nation that does not restrain its children”. Nicola Sturgeon, then first minister, said she was inspired to launch the independent care review back in 2016 after hearing from one young boy about his experience of restraint. 

Physical restraint covers a wide range of ways to hold a child or young person by force but at its most extreme young people can be brought to the ground and held by multiple staff members. In 2021 The Ferret found children as young as five were restrained. 

Nineteen councils responded to freedom of information requests and said they had used restraint between 2,355 and 2,360 times. Ten authorities did not respond and three said they had no records.

Louise Hunter, CEO of Who Cares? Scotland, said: “Our members have told us that restraint leaves a lasting impact on them psychologically. This is a practice that is not employed in family homes and has no place in a modern Scotland.”

Cover image thanks to iStock/Pablo Rodrigo Sanchez Remorini

This story was published in partnership with the Sunday Post. Our partnerships with other media help us reach new audiences and become more sustainable as a media co-op.  Join us to read all our stories and tell us what we should investigate next.


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