More than 100 privately run children’s homes in England with serious deficiencies have been branded inadequate by inspectors, with several found to have links to private equity firms including: observer investigation found.
Poorly trained staff, chaotic management and a series of incidents endangering children’s safety have been cited in official reports from Ofsted, which inspects children’s homes, as it concluded they were providing inadequate care. Several have closed since inspectors raised concerns.
That observer examined the recent Ofsted inspection of private childcare homes. It turned out that 114 houses received the lowest “inadequate” rating, prompting further investigation. About 20 of these were operated by providers with links to private equity. It comes amid ongoing frustration over the “broken” supply of child care homes.
Private companies now play a large role in the provision of care, with more than three quarters of homes in England being operated by this sector in 2021. Local government figures have also pointed to the growing role of private equity and warned that the pursuit of profit and debt that may result is not a solid foundation for nursing home operations.
Anntoinette Bramble, chair of the Local Government Association’s Children and Youth Committee, said: “The Competition and Markets Authority has confirmed our own findings that private equity firms are making extremely high profits and carrying levels of debt that are threatening the stability of the children’s homes in care, which is of the utmost importance if they are to thrive.”
Graphite Capital, which owns shares in the Hawksmoor restaurant chain, currently has interests in three companies that managed six poorly rated properties. All have closed since their inspection, two before Graphite took an interest in the company in question.
At one of the properties operated by Compass Children’s Homes, an employee failed to share a plan about making a “significant visit” for a child and his siblings. “As a result, the child failed to see all of his brothers and sisters together before some proceeded to adoption,” inspectors noted. Their report states that deficits “put children’s physical and emotional health at risk.”
At another facility owned by a Horizon Care group provider, inspectors found children living in a “hazardous environment,” prompting an environmental health investigation. They found that when a child told staff they had self-injured, “the staff didn’t ask further, nor did they find out if the child needed medical attention.” According to Tussell, which tracks public contracts, Horizon has public contracts with two councils worth £1m.
A Graphite Capital spokeswoman said his ownership did not affect the decision to close any of the homes. She said Compass and Horizon have above-average Ofsted ratings among all the homes they operate and “significantly exceed industry norms”, with the Graphite investment allowing companies to improve their homes.
Partly owned by Waterland Private Equity, Aspris has two houses with significant deficiencies that have received the lowest possible rating from Ofsted, while a third deficient house has been closed. In one of the homes run by Progress Care and Education Ltd. operated, inspectors found that one child was physically prevented from leaving his bedroom, but “the records of this incident did not show that this restraint was necessary or proportionate”. It adds: “Furthermore, the continuity of childcare has been significantly affected by the high use of temporary workers and a high number of staff absenteeism. For example, in one week in March 2022, 15 different agency members worked at the home.”
A spokesman for Aspris said: “We currently have two children’s homes that have been assessed as ‘inadequate’, a number that will shortly be reduced to one following a recent re-inspection. For comparison, nine of our properties are currently rated ‘Outstanding’ by Ofsted. We have every confidence that the standard of service for the people we serve will not be affected by our ownership arrangements.”
Ardenton Capital has interests in companies operating two undersized homes. In one, run by Radical Services Ltd, inspectors said: “The garden is littered with cigarette butts and rubbish waiting to be taken to landfill and is overgrown and unkempt. The interior finishes are not particularly high quality, especially in the children’s room.” The house, which is now the final owner of Pebbles, is being closed after talks with Ofsted. Michael Walsh, Chief Executive of Pebbles said, “Our owner, Ardenton, has always said and still says, ‘What do we need to do to better provide the children with the care they need?’. As long as investors take this long-term, child-centric approach, I think there is a place in our industry for that type of owner.”
Josh MacAlister, who chaired a government-backed independent review of children’s welfare, called for a “reset of the entire system” to create regional bodies to oversee and build the children’s homes needed. “Children’s homes provide a safe haven for some of our most vulnerable children, and many of the staff who work in these homes go above and beyond,” he said. “However, the review found that the childcare ‘market’ is broken. Greed for profit, children being removed far from their communities, and a lack of homes that meet the children’s needs are all pressing issues that need to be addressed.”
A Graphite Capital spokeswoman said private provision generally costs local authorities no more than they would pay for home care. “Without private sector investment in new capacity, there would be no place for children and young people who need residential care.”
That observer analyzed the latest inspection data for all privately run children’s homes in England on June 14, including those that later closed.