Child social care 'slowly bankrupting' council

Children's social services firms are engaging in "outrageous profiteering" which risks bankrupting a local authority, an MP has said.

Labour's Jonathan Brash told the House of Commons that Hartlepool Borough Council was "being slowly bankrupted" by firms overcharging for their services.

His comments came as the local authority said its spending on children's social care had doubled over the last five years to £46m for 2024-25.

Councillor Rachel Creevy said the high costs were the "biggest threat to the council's financial sustainability".

Speaking in the Commons, Brash claimed the top four private providers in Hartlepool were charging an average of £12,000 a week per child.

Speaking to the BBC, he added: "Most people don’t realise the crisis councils are facing.

"They are having to make impossible choices around cutting services and increasing taxes to fund the care of our most vulnerable children - all because of the disgraceful profiteering of companies making their money from the misery of others."

Brash's comments were made in response to Bridget Phillipson's plans to cap the profits of children's social care firms.

The education secretary said there were now more than 1,500 placements each costing more than £500,000 a year and the top four providers were making between 20 and 30% profit.

"When you think crucially to where they are making this profit, it is off the backs of the trauma, abuse and sometimes very difficult early childhood experiences of some of the most vulnerable children in our country," she said.

The government aims to bring in new measures requiring large providers to disclose their finances and limit their profits.

It also intends to strengthen Ofsted's powers to investigate and fine providers.

Creevy, who is chair of the council's children's services committee, said: "Like many northern councils, Hartlepool is facing significant and sustained pressures on children's social care, with private market costs being a major factor."

She added: "We welcome any government plans that may address this position, including any cap on profits."

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