Half of children’s homes “owned by offshore firms”

It has been claimed that half of Britain’s 10 largest child social care operators are owned by offshore private equity firms in Jersey, Luxembourg and the United Arab Emirates.

According to a report from The Times based on Local Government Association data, offshore corporate bodies are “largely paid by the taxpayer to look after some of the country’s most vulnerable children”.

This ultimately means “hundreds of children’s homes and fostering agencies” are in the hands of foreign entities, many of which are “loaded with debt” in order to finance more takeovers.

One such example of a group owned by a firm in Luxembourg is Outcomes First Group, who are under the control of SSCP Spring Topco. The company recently posted a pre-tax loss of £69 million and has debts of £871 million. Outcomes First said:

“We are a UK registered company and pay all UK taxes due, any profit is reinvested into improving and extending services.”

Another example is CareTech, who run around 200 children’s homes. According to The Times, the firm previously sent £2 million to offshore companies in the Caribbean owned by its founders – all the while accepting Covid support from the British government. CareTech reportedly said company dividends were “subject to UK taxes”.

Anne Longfield, chairwoman of the Commission on Young Lives, said:

“This is a sign of how broken the children’s homes market is. Money that should be invested in providing high-quality places for vulnerable children here is instead being shipped abroad to fill the coffers of wealthy investors and institutions.”

This comes as children’s care has been in the spotlight recently with the publication of the “once in a generation” Independent Review of Children’s Social Care. The review’s lead, Josh MacAlister, called for £2.6 billion in funding over five years to prevent the number of children in care exceeding 100,000. Other recommendations include:

• New child-protection experts to ensure senior staff are directly involved in frontline decisions
• A recruitment drive to increase the number of foster parents who can care for children
• A new law protecting care leavers from discrimination
• Young offender institutions, described as “wholly unsuitable for children”, to be phased out

The government responded by promising a “fundamental shift in how children’s social care services are delivered”. The Child Safeguarding Practice Review Panel has also commented on the review’s findings, calling for new expert child protection units across the country.