Bridget Phillipson is considering introducing measures to curb profiteering by private firms running special educational needs (SEND) schools, it has emerged.
Under the schools bill, government would get new financial oversight powers for private providers of social care provision – including plans for a “last resort” profit cap to “curb profiteering”.
Many of the same providers run special schools – charging double what state schools do – but government has previously refused to extend the powers.
However in an interview with the i newspaper, Phillipson said this is now being considered as part of wider SEND reforms.
She said stopping profiteering in SEND education was “part of the wider reform and we do need to look very carefully at placements, but as a part of that we need to create more placements for children close to home”.
Private-equity-backed firms make millions
A special Schools Week investigation in 2023 revealed how firms backed by private equity investors and a Middle East sovereign fund were making millions from special schools.
But average independent special school costs are double that of the state sector, and councils’ growing expenditure on costly private provision is contributing to huge funding deficits.
Some of those cash-strapped councils are now slicing more funding from their mainstream schools to fill the gap.
A rise in demand has left state special schools overwhelmed, a Schools Week investigation in 2022 revealed.
Some councils have told the ongoing education committee inquiry that profit-making from SEND placements should be banned.
However, the Independent Schools Association (ISA) said private schools were a “vital partner in alleviating strain on the state SEND system”. They currently teach 132,000 children with SEND.
Norfolk council said a “value for money” equation could be introduced for placements, focusing on Ofsted ratings and the cost of schools.
‘Better outcomes first principle for SEND reform’
The schools bill will introduce new powers for social care settings, including giving Ofsted power to take enforcement action where there are quality issues across multiple settings.
A financial oversight scheme will also enable government to closer scrutinise the financial health of large children’s social care providers. This would include large providers with dual-registered special schools
And a “last resort” profit cap to “curb profiteering” in non-local authority children’s home and fostering agency providers will also be introduced.
The i reported a package of SEND reforms are due to be announced after the spending review in June.
“The first principle of SEND reform is better outcomes for children with SEND – their educational outcomes are not as good as they should be,” Phillipson told the paper.
“We are spending vast sums of money on a system where parents have lost confidence, where children are not getting what they deserve. This will involve more mainstream inclusion.”
She also criticised the “extraordinary” costs of transporting children from home to special schools. The currently taxi costs are nearly £2 billion.
