Private companies providing education for pupils with special educational needs and disabilities (SEND) should have their profits capped, the Liberal Democrats have said after finding that top equity firms have made combined profits of £100 million a year.
The Liberal Democrats described the findings as an “absolute scandal” and demanded that private providers of special education are subject to an operating profit cap of 8 per cent to curb “exorbitant” profits.
Many of the firms involved in running private SEND provision are backed by private equity companies based in tax havens or by foreign sovereign wealth funds, the Liberal Democrats said.
One company made £34.8 million in profit in the year to August 2024, while another made £12.2 million in the year to September 2023.
There are concerns that a lack of state school capacity for pupils with SEND is contributing to a financial crisis in the SEND system because it is resulting in increased spending on more expensive placements at independent settings.
‘Shameless profiteering’
The research into private equity firm profits, commissioned by the Liberal Democrats, comes amid an ongoing crisis of local authority SEND deficits. There have been warnings that combined local authority deficits could hit more than £8 billion within three years if the SEND system is not reformed.
Experts have warned that government reforms aimed at improving inclusion in mainstream schools will fail to curb spending on independent special schools after a Vlog analysis revealed that one in five councils more than doubled its outlay over the past four years.
In November the education secretary vowed to crack down on “
Bridget Phillipson has suggested that the average operating profit margin across all for-profit entities calculated by the Office for National Statistics of 8.8 per cent could be a reasonable cap in the children’s social care sector.
It has also been reported that she was considering looking at
However, a Liberal Democrat proposal to introduce a cap on private companies’ special-school profits was voted down at the committee stage of the Children’s Wellbeing and Schools Bill.
Munira Wilson, the Liberal Democrats’ education spokesperson, said: “It is an absolute scandal that private equity companies are shamelessly profiteering from the crisis in SEND education, while families are left to fight tooth and nail for vital support for their children.
“Children with SEND deserve the best possible support, and should not be viewed as cash cows for vulture firms. This excessive profiteering is a major driver of the crisis in our SEND system. These companies should be ashamed.”
Ms Wilson added: “We need urgent action. Liberal Democrats are calling for the government to cap these exorbitant profits at 8 per cent, to ensure that money is channelled back into the SEND system and not into the pockets of shareholders. It’s time to put our children first, not corporate greed.”
A Department for Education spokesperson said: “The system we’ve inherited has been failing families of children with SEND for far too long, and it’s appalling that some companies are capitalising on this crisis.
“Through our Plan for Change, we will build a system where every child can achieve and thrive. That requires all schools to be firmly focused on improving children’s outcomes - not excessive profit-making.”
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