There are concerns about the stability of the
fostering industry.

Foster agency collapse risk

Tighter regulation is needed so children in foster care are not left without placements if a private agency folds, a leading charity has said.

Last year young people in some children’s homes were left without placements overnight when a children’s residential care company owned by a private equity firm went into administration.

Sedgemoor, a residential and education company owned by private equity company ECI went into administration and closed.

Care charity TACT have said fostered children should not have to face the same uncertainty.

Keith Williams, chief executive of TACT said:

“Private equity has one primary motive and that is to maximize the return on their investment.

"Sedgemoor is a reminder to this sector that where the profit motive is paramount for private equity firms the consequences can be disastrous for children, staff and carers.”

The Children and Young Person’s Bill currently going through parliament adds no strength to the regulations.

The government says it is working with Ofsted, who regulate care homes and foster care providers, to ensure more inspections.

In March children's minister Kevin Brennan told the children, schools and families select committee:

“We are strengthening the inspection regime to make sure that there is a transition in relation to pulling the plug.”

Dominating the market

The last two years has seen a few large agencies take over some smaller fostering agencies.

Neil Loader, Fostering Manager at Five Rivers Fostering said:

"If you wanted to buy a fostering agency it wouldn’t be too difficult. A lot of people are trying to sell
because it has got so competitive."

Four of the UK’s biggest fostering agencies: The National Fostering Agency, Fostering Solutions, Pathway Care and Acorn Care, are owned by private equity companies.

None of them would provide a comment for this website.

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