Councils and Ofsted must access the financial records of private children’s care providers to prevent potential risks to services, according to the former head of the provider Sedgemoor, which collapsed last month.
Andrew Rome, who ran the company until two years ago, told Community Care LIVE Children and Families that more needed to be done to protect children against losing placements when providers ran into financial trouble.
He said that when Sedgemoor, which was backed by private equity firm ECI, went into administration he had been “distressed” to learn that children in homes run by the company had their stable placements ended “overnight”.
He called Sedgemoor’s collapse “an absolute tragedy” for the children, some of whom had autism and could not cope with change.
He said some but not all of the children under the care of Sedgemoor had successfully been found other placements.
Rome raised concerns that the Care Matters white paper on children in care, published in June, did not contain any measures to ensure a case like Sedgemoor could not happen again in the future.
He pointed to the need “more explicit” protection for vulnerable service users in the care of private providers.
“Every local authority and Ofsted or other regulators have a responsiblity to look at companies’ financial standing to help them spot signs of risk earlier in an increasingly financially sophisticated market, ” he said.
The Sedgemoor case sparked concerns about the involvement of private equity and venture capital in children’s services.
However, Rome added: “They are already there and we have to deal with it.”
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