The government is planning to introduce new measures mandating large children's home providers in England to disclose their financials and limit excessive profits. If they fail to comply voluntarily, there will be legal restrictions on profit margins.
The proposed reforms are in response to rising demand and the escalating costs local councils face while trying to manage children's services amidst a stretched care system, with many councils paying over 500,000 per year for residential placements.
The government's legislation aims to address the issue of exploitation within the children's care sector, highlighting that some of the largest providers average a 23% profit per year, raising concerns around profit-driven motives over child welfare.
While the reforms aim to regulate large providers, experts caution that focusing only on the biggest companies will not tackle the potential exploitative practices of smaller operators which may also be financially abusive.
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