‘We’ve lost the capacity to care and private equity is cashing in’

We’ve lost the capacity to care. Private equity is cashing in

A 12-year-old girl and her 10-year-old brother are taken into police protection after officers respond to a serious domestic violence incident. No emergency foster placement can be found, so they spend the night in police cells.

A 14-year-old girl is taken to A&E after self-harming; while being assessed, she discloses sexual abuse. She remains in a hospital bed for a week because, again, social services cannot find her a suitable placement.

Situations like these would have been unthinkable when I qualified as a social worker 12 years ago. Now, an acute shortage of foster carers is making them routine.

There were 81,770 looked-after children in England in 2025, up 18% since 2015. Yet the total number of approved foster carers has fallen every year since 2021, down 10.4%.

The crisis in our care system tells a story about a very specific way Britain is broken. We are losing the capacity to care for the most vulnerable children in our society, and private equity is cashing in on this failure.

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The traditional foster carer — a parent with older children or an empty nest, and the space and time to offer care — is disappearing. Fewer people have spare rooms, and dual-income households mean most families can’t afford for one adult to step back from work.

At the same time, austerity has gutted local authority in-house residential provision, leaving statutory duties intact but the ability to meet them hollowed out. 84% of children’s homes are now run by the for-profit sector, increasingly by private-equity-backed providers. The average cost of a residential placement is now around £300,000 a year per child, with some individual placements exceeding £1 million a year. Local authority spending on residential care reached £3.1 billion in 2023–24, up from £1.6 billion in 2019–20.

We are paying more for less. A residential home, however good, can’t replicate the consistency and emotional containment that a family environment provides. While some children with complex needs may need a residential placement, increasingly children in care are ending up in these settings not because it’s the best option, but because it’s the only one.

The children’s minister Josh MacAlister has pledged 10,000 new foster places by 2029. The government’s fostering action plan has some welcome elements — capital grants to allow existing foster carers to extend their homes, and regional care cooperatives to pool resources and improve forecasting — but the scale of funding is modest: £88m, repurposed from existing budgets.

The main levers the government is pulling in an attempt to fix recruitment and retention are process reform and deregulation, relaxing the rules on who can foster and giving carers greater day-to-day autonomy. A notable absence in the government’s plan, is the question of remuneration. MacAlister has argued that pay isn’t the biggest issue, insisting that fostering “isn’t a job”.

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MacAlister is right that the commitment and responsibility demanded of foster carers far exceeds anything found in a 9-to-5. Fostering is about as concrete an instance of the common good in action as you could find. It is pure reciprocity: the attachment and consistency carers provide benefits not just the child but society as a whole, just as the costs of relational failure — a child denied safety and stability in their formative years — are borne by us all, through criminal justice, health and welfare costs down the line.

Yet the capacity to care is being squeezed out by housing insecurity, the cost-of-living crisis and a system that treats caring as a commodity. While billions flow out of the public purse onto private-equity balance sheets, in many parts of the country foster carers are compensated as little as £195 a week.

Properly funding foster care isn’t about a fee for a service rendered; it’s about investing in the latent capacity communities already have, so people are free to take up a caring vocation.

As Andy Burnham prepares to enter office, he is promising ‘Manchesterism’: a pivot away from neoliberalism towards an active state, directly-managed essential services and devolved power to local and regional authorities.

The crisis in foster care should be an early test of this vision. This is an emergency, but it is also a solvable problem. Providing care to vulnerable children shouldn’t be beyond the wit of the world’s fifth-largest economy.

We are already paying for this crisis; we are just paying the wrong people. There is no clearer example of the need to direct resources towards the common good, and to draw a line under a dysfunctional, amoral system that allows children in need of protection to become sites of profit extraction.

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