There is no doubt that the rise in demand for special school places over the past few years was neither anticipated nor effectively dealt with by the State. One consequence is that large amount of off-balance sheet debt being carried by many local authorities responsible for schooling in England. Another consequence, highlighted by the Liberal Democrats in a press release issued today, is what might be described as the ‘windfall’ profits being made by a few in the SEND sector. Lib Dems demand cap on SEND providers profits as top firms rake in £100m – Liberal Democrats
When the highest paid director of a company operating both care homes for children and special schools is paid over £300,000, or more than twice the salary of a Director of Children’s Services commissioning the use of places in the schools and homes, it seems sensible to question whether such use of public money should continue.
At this point, I must make clear that I am a capitalist. The 40 years I have traded on my own account and through a company, as well as held a portfolio of investments in other companies. However, there are two issues that concern me. Where should the boundary line between services offered by the State and those run by the private sector be drawn? And how should price be determined?
It is interesting, as I have noted before, that in the USA and many other countries, public transportation is just that: a service run by the State. In England it has become a battleground between the State and private enterprise and the differing political opinions. Most would expect SEND to be a public service.
What often seems to be lacking is a mechanism to regulate the costs of suppliers to the State. When the private sector funds its enterprise by borrowing to provide the services and then expects the State to service that debt with a profit element added, it seems to me like time to take the service out of the private sector, and back into public provision.
In the case of SEND school places, national and local government should work together to prove places in state-run schools that would obviate the need for private sector intervention. This means the State, in this case the DfE, being much more interventionalist than has been the case.
The Liberal Democrats, of which I am a member and activist, noted in their press release that
‘Research commissioned by the party and carried out by the House of Commons Library showed that the top handful of profiting companies each took home tens of millions a year. One Group, operators of 28 special schools, turned over just over £200 million a year, making £44 million in profit – a margin of over 20%. That profit is 150% what the company made in 2022.’
How many more teachers might the £44 million have funded? While we wait for the government to produce a White Paper on SEND, perhaps the Local Government Association should set up a taskforce to remove the need to use the private sector.
I am sure that when John Stuart Mill, the nineteenth century philosopher, said that’ it was the duty of the State to see it citizens were educated, not to educate them itself’ he did not expect the cost to the State to be more than a reasonable amount.