Richard Lynch-Smith Special Edition

Building their seat at the table: why privatisation can never deliver for children in need of state support

‘The form of wood … is altered if a table is made out of it. Nevertheless the table continues to be wood, an ordinary, sensuous thing. But as soon as it emerges as a commodity, it changes into a thing which transcends sensuousness. It not only stands with its feet on the ground, but, in relation to all other commodities, it stands on its head, and evolves out of its wooden brain grotesque ideas far more wonderful than if it were to begin dancing of its own free will.’ – Marx, Capital Volume One


The youth services in the area where I used to work are buffeted by the sounds of an A-road. Articulated lorries fly over the heads of social workers. Homework clubs take shelter in the underpass.

I used to wonder, in my less-interesting moments, whether there was a correlation between traffic pollution and government funding. The noise is deafening for those who have had to carve out space in the arterial roads.

A young person I worked with, Yasmine[i], could define her years in those spaces. When she was first in foster care there was the art therapist who it took her a year to trust. For months on end their silences would be punctuated by the buses. When she eventually found her voice she tested it in the microphones of the music centre, her words rising above the car horn section. 

Yasmine will become eighteen when the Care Review makes its provisional recommendations. As one of those concerned about the proximity of the chair, Josh MacAlister, to government and corporate interests, I have been left wondering what its findings may mean for her. 


The chair’s sympathy to public-private partnerships has been well-documented. Social impact investing was first entertained under New Labour, but emerged with vigour after the 2008 crash. Its proponents portray it as a no-brainer, with the competition and oversight of the market leading to innovation in the solving of social problems.

As Ray Jones has shown, privatisation will not emerge overnight. It is likely that the review will make some sound recommendations. It is possible to believe in the good intentions of those involved whilst holding concern about their proximity to the interests of private capital. It is not just who is sat at the table, but the space they are leaving for others to build their seat.

Yasmine has been living with Em, an agency foster carer, for the past eight years. Her agency is owned by a private equity firm, with the familiar business model of buying up smaller agencies, restructuring and selling on. The agency is one of the three that receive 45% of independent fostering council funds. This cartelisation has led to a vast increase in unregulated, remote and costly placements.

Em began working for the agency after being offered a slightly improved rate. When the firm was first sold on, she found that the conditions worsened. There are limited avenues open to the capitalist looking to restructure and profit from a care provision. The exploitation of the cheap labour of foster care is a reliable means of instilling confidence in the market.

One of MacAlister’s first actions as chair was to appoint the Competition and Markets Authority (CMA) to investigate the provision of care. The parameters of this seem opaque, and it appears highly unlikely that they will challenge the structures that make profit the paramount principle. Until this happens, the goodwill of foster carers like Em will continue to be exploited.

There is also an urgent question around what would happen if one of these companies failed.

Financialised systems of care breed a dangerous short-termism, with price distortions being one of the risks. This means debts further down the line, and desperate attempts to shore up profit. If failure can be avoided it is through harsher working conditions for people like Em, not the appropriation of funds from offshore tax havens.   

The rhetoric around the review has been one of asking difficult questions. My social work training -through Frontline – stressed the importance of ‘radical candour’. The instability that Em lives and works through helps me to understand why this idea never quite clicked for me. You can hold as many difficult conversations as you like, but when you ignore the exploitation hard-wired into the system then your candour will never be enough.


When I think of life under the A-road, I don’t think of services that provide a neat solution to a social problem. It is difficult to quantify the value of Yasmine sitting silently on the art therapist’s couch. The CD that she made in the music centre didn’t add to any statistics for children out of education, employment or training.

This quantification is integral to market-driven investment. Mechanisms such as social impact bonds (SIBs) allow public bodies to seek private investment for specific interventions. The ability to quantify outcomes is essential, as investors only receive returns once specific outcomes are met.

For councils, this creates an impetus to provide clear metrics on social outcomes. Measures of cost-effectiveness are necessary at the level of commissioning, and in order to attract investment on capital markets. The government’s own guide on SIBs points to the correlation between closely measurable outcomes and increased investment.

As Emma Dowling shows in The Care Crisis, the vast majority of SIB-funded projects are about supporting an individual to adapt to the demands of society. An example would be a CBT-based project designed to reduce rates of recidivism. The metric could be the net savings to society if someone remained out of prison for a defined period of time. Once a set measure is reached, investors begin to receive a return.

This is unsavoury on two levels. Firstly, this means that private investors are pocketing profit from the savings that they set out to make for the public. Inequality and disadvantage effectively become a revenue stream. As with private equity firms, this is not the work of a few bad-faith actors, but integral to the system of financialisation.

The second concern I have is for the services that may be available for Yasmine in future. Some of those she benefited from were chaotic in organisation, or formed in defiance of the council. I don’t know if it’s possible to quantify self-expression or political awakenings, even if the market had any interest in doing so. More than anything I worry that Yasmine will be taught to adapt to society, rather than to use her voice to demand more from it.


Mechanisms like SIBs are yet to live up to their promises. Shortfalls in returns are often met by central government, through schemes such as the Cabinet Office’s £20 million ‘Social Outcomes Fund’. Ronnie Horesch, the conservative economist credited with driving SIBs forwards, places the blame in their lack of ‘tradeability’.

The argument goes that their focus is too short-term, which means there is limited time for new entrants to the market. A secondary market, in which investors would bet on the likelihood of these outcomes being achieved, would allow for the necessary growth. This would increase the pressure on bond holders, and make it more likely that outcomes are met. 

What this could lead to is a situation where risk is simply insured, or sold on in other forms of securitisation. We could face a situation where the slightest sign of risk leads to investors pulling out. Services that were once-rooted in communities become subject to the undulations of the market.

It is also here that concerns around vested interests come to the fore. What started out as pro-bono corporate social responsibility becomes a mechanism for influence. Those who traverse capital markets and the boards of prominent charities should be firmly on the radar of those who plan to resist. 

Of course, this corporate capture of children’s services will not be contained in the report’s recommendations. The involvement of private equity in fostering is more developed than the advance of SIBs. Developments take place at different paces, but they are part of the same trajectory. Market principles cannot be adopted selectively, as profit will always take precedence over public good.

This is the lens through which any attempts at reform must be seen. The market cannot provide for the communities that we serve; it can only fragment and individualise them. The problems we face are economic and social, and have to be met as such. There can be only one answer – solidarity.

Solidarity with Yasmine, as she uses her voice to demand better.

Solidarity with Em, whose labour is exploited by those who profit from her goodwill.

If they do not have a space at the table, we must build them one.  

Richard Lynch-Smith is a social worker.

Twitter: @richlynchsmith

[i] To ensure confidentiality, names and identifying information have been altered throughout.