Few topics in children’s social care generate as much heat as privately owned fostering organisations. Headlines often suggest profiteering at the expense of children and councils paying fostering organisations thousands per child with the money disappearing into shareholders’ pockets.
But the truth is more complicated.
There are sometimes concerns about the role of profit in fostering. But financial success and putting children, young people and foster families first are not mutually exclusive.
Independent fostering organisations come in many different shapes and sizes, and many have strong links with the communities they serve. Being financially strong allows organisations to invest in their services, support foster families, develop their staff and, most importantly, improve outcomes for the children and young people in their care.
Misunderstanding often comes from how costs are shown. When a local authority places a child with an independent fostering agency, that fee can appear high in comparison to the fee they display for placing “in house”. But these figures are not like-for-like. Local authority fees do not include their overheads within their figures. Office space, management costs, staff salaries, training, recruitment and many other administrative costs are often spread across wider council budgets and therefore may not appear in the headline placement figure. Private organisations, on the other hand, have to include all these costs in one clear fee. What has been described as profiteering is often just the real cost of running a safe, high
quality, regulated service.
The Government’s current fostering reforms aim to recruit 10,000 more foster families, improve support and make commissioning more effective. Regional Care Cooperatives are being introduced to help councils work together, understand local demand and negotiate better value from providers. At the same time, the Children’s Wellbeing and Schools Act 2026 gives Government powers to introduce regulations capping profits made by non-local-authority providers, including IFAs. This is a significant step. Excessive profits should be challenged, but regulation should be based on evidence, not the assumption that every independent provider is profiteering.
Placement stability is one of the clearest indicators of quality. When foster parents are well matched with children and well supported, children experience less moves. When support is overstretched, weak or slow, breakdowns occur, leading to multiple moves or the need for significantly more expensive residential care.
This is where the false economy becomes clear. Focusing solely on lower placement costs can obscure the long-term consequences of under-resourced support. Frequent placement breakdowns disrupt education, mental health and relationships, compounding trauma and increasing future expenditure across health, justice and social care systems. What appears cheaper at the outset can prove far more costly over time, both financially and socially.
None of this suggests that local authorities lack commitment. Many deliver exceptional work under intense financial pressure. And the independent sector is far from uniform. Many agencies operate responsibly, reinvesting in training, staff development and foster parent support.
The Government’s reforms should therefore focus on quality, transparency, stability and outcomes, alongside proper financial scrutiny. The conversation should be about what works best for children, not public vs private. If an organisation keeps children safe and happy in stable foster families, supports foster parents, shows positive outcomes for children, and is open about costs, it deserves recognition, not suspicion. Taxpayers deserve honesty about what quality care really costs.
Details matter. Evidence matters. Outcomes matter.
It is time we stopped tarring every independent fostering organisation with the same brush.