In June 2005 the Glazer family took over Manchester United. But they didn’t just use their own money to buy Utd, they borrowed most of the money and then, once they had purchased the club, they transferred their debt to the club. Since 2005 the club has paid out £815m in debt interest repayments & £197m in external net debt repayments. Just for good measure, the club has paid out £10m in management and administration fees to Glazer family companies.

What has this got to do with children’s social care?

Well, these are precisely the financial arrangements that private capital use to buy chains of residential children’s homes and fostering agencies. They borrow the money to buy them and then load the debt onto the children’s home company or fostering agency they have just bought.

All of this is perfectly legal. The issue is that the debt must be serviced, and interest payments covered. So, who’s paying off the interest on all this leveraged debt? Well, you and I are: the debt interest is part of the fees these firms are charging Local Authorities to look after children in residential or foster care. This is money intended to pay for the care of some of the UK’s most vulnerable children. Instead, it is paying interest (at rates way above the Bank of England base rate) on debt that has been artificially inserted into the children’s social care market. The lenders tend to be Hedge Funds controlled by multi-millionaires; they are adding to their fortunes by collecting interest from money that was intended to transform the lives of children in care.

Has this approach improved the quality and location of homes for children? Well in 2024 in St Helens, one of the smaller Local Authorities in England, there were 37 children’s homes, with 34 run by private providers. Millionaire owners who borrow their money from fellow millionaires don’t want to invest in homes near where children come from when they know full well that Local Authorities will have no choice but to send children hundreds of miles away to children’s homes in St. Helens, Blackpool and other areas where large property is more affordable.

The Government could act to end this practice. The previous Government rejected amendments 145 – 147 to the 2022 Health & Care Bill which would have addressed this issue effectively in adult social care and could have been extended to children’s social care.

There is an opportunity for the government to introduce the rejected amendments, as amendments to the Children’s Wellbeing and School’s Bill currently passing through parliament. The ironically opaque practices of the Glazers allow the wider public to understand how inappropriate it is that these financial tools are allowed in the children’s social care sector.

It’s time for transparency in children’s social care.

Andy Elvin, TACT CEO