Private children’s homes making ‘too much profit’

Private companies are making too much profit from children’s homes, a report by the Competitions and Markets Authority (CMA) has warned.

The research by the regulator found that the system of placing children in accommodation by councils was “failing” and that private providers were being allowed to take advantage of a lack of supply to “charge high prices and make big profits”.

In some cases, due to a critical shortage of homes to place children with complex needs such as autism, two or more councils end up bidding against each other. The CMA found that companies had an average operating profit margin of 23 per cent.