Derbyshire council leader accuses private childcare providers of ‘profiteering’ as authority considers a ‘£3.9m’ savings plan

Council Leader Barry Lewis and Deputy Leader Simon Spencer have repeatedly stated that the Government needs to make a potential change in legislation with a cap on what the council regards as crippling fees and costs from private providers for childcare services.

The issue has resurfaced after the council set a balanced budget while facing a forecast deficit of over £39m for the 2024-25 financial year and as parents and child agencies are being urged to contribute to a consultation about the proposed restructure of the council’s provision of Early Help services and Children’s Centres to save about £3.9m in costs.

In an interview prior to the launch of the consultation, Cllr Lewis said: “They are exploiting the misfortune of young people and it’s profiteering.

“I do not mind any organisational body working in these places making a sensible and reasonable profit but what I object to is off-shore companies trousering £300m.”

The Conservative-led council has stated that its biggest financial concern is the rising costs for children’s services and adult education costs which it states are outside of the control of the authority.

Cllr Lewis says care home placements for children are causing significant spiralling, runaway costs for the council and he has previously stated that in a market where demand outstrips supply there have been further cost increases while private care providers charge hyper-inflated costs and pick and choose which children to accept.

He added that in recent years this market has become distorted with some of the biggest private care providers making profits of over £300m last year ‘on the backs of some of the most vulnerable children in the country’ and this is being paid for solely by the taxpayer which Cllr Lewis feels is ‘immoral’.

A recent council report stated that because there has been such a continued demand for Children’s Services, Safeguarding and Education Services combined with rising costs this resulted in a significant estimated budget overspend in these areas of about £17.9m.

Cllr Lewis, and Cllr Spencer are continuing to urge the Government to make a change in legislation with a cap on what the council regards as crippling fees and costs from private providers for some childcare services.

The council is currently having to consider reviewing and potentially redesigning its provision of Early Help services and Children’s Centres to make them more efficient with massive savings while facing runaway childcare costs and suffering from inflation rates, the impact of Covid-19, the cost-of-living crisis and continued uncertainty over Government funding.

However, it is eager to hear from parents and partner agencies during a public consultation on the future of the Early Help Services and Children’s Centres which was launched on February 12 and runs until March 24.

Cllr Julie Patten, Cabinet member for Children and Families, told a recent meeting that children’s services have already put forward possible plans to save around £2.8m from the Early Help Services and Children’s Centre provision and plans have also been proposed not to extend the Early Help Development Team beyond July 31 reducing demand for the Supporting Families reserve by £1.6m per year.

The council is considering the most efficient use of disabled residential services at The Getaway centre – which provides residential short breaks or care to disabled children – and it is also looking at its Outback service which supports disabled children in their own homes.

Cllr Patten has also criticised private childcare providers to the council after identifying one particular placement costing as much as £12,000 a week as the demands for childcare continue to increase.

In addition, Cllr Alex Dale, Cabinet member for Education, has stated that private providers are being allowed to make massive profits and this money is not being properly reinvested back into supporting children’s services.

A Derbyshire County Council spokesperson said: “The council is facing increased demand for many services, and higher costs for lots of things we buy. We’ve also seen a huge increase in costs for private placements for children in our care.

“Private, independent care providers have always been a part of the way we look after children but in recent years this market has become distorted with some of the biggest private care providers making profits of over £300 million last year – all on the backs of some of the most vulnerable children in the country and paid for solely by the taxpayer.

“We’ve called on the Government to urgently address this issue and take steps to fix the broken placement market, as it is affecting council budgets across the country.

“Partially because of the impact of these high costs on our budget we are now having to go out to consultation on reducing some of the very services that can keep families together and children out of the care system, and relying even more on partner agencies like health and schools to provide this type of early help support.

“We recognise that in the longer term this may lead to more demand for social care services, but we have very little choice as we need to balance our books and must focus our limited resources on delivering the statutory work we do to keep children safe and protected from harm.

“That is why it’s so important the Government intervenes urgently to reform the children’s social care system. We’d encourage everyone to have their say in this consultation.”

Derbyshire County Council’s Early Help teams and Children’s Centres’ provision delivers services including health visitors, speech and language development, healthy eating, parenting, school readiness, family support, parenting groups, and improvements for family relationships.

The council’s Early Help service is delivered through its Children’s Centres and in families’ homes, and the centre buildings used by the council teams provide support groups and activities and are also used by other organisations to help children, families and the community.

Children’s Centres can be located in Chesterfield, Bolsover and NE Derbyshire, Amber Valley, High Peak and the North Dales, Erewash, South Derbyshire and the South Dales.

A council spokesperson explained the majority of Children Centre buildings are owned by Derbyshire County Council and some can be found on school sites and a small number are leased from third parties.

Those wishing to take part in the consultation can do so by visiting the county council’s website link https://online1.snapsurveys.com/interview/b23c433f-faab-4be3-b549-0d43b0f2587e for details.