“`html
The Liberal Democrats are advocating for a cap on profits for private providers of special educational needs and disabilities (SEND) schooling, citing concerns over what they describe as “shameless profiteering.”
According to research commissioned by the party, some firms are generating tens of millions of pounds annually, with profit margins exceeding 20%.
Munira Wilson, the party’s education spokesperson, has proposed capping profits at 8% to prevent funds intended for SEND children from ending up “in the pockets of shareholders.”
In response to the research, the government stated that Labour is requiring schools to focus on “improving children’s outcomes – not excessive profit-making.”
Analysis by the House of Commons Library, commissioned by the Lib Dems, revealed that several leading providers of SEND education, some backed by offshore private equity firms, have experienced significant profit increases in recent years.
One provider reportedly generated over £44m in profit on an annual turnover of £208m, marking a 60% surge in profits in just two years.
Another provider reported £20.9m in profit from £194.2m in turnover, resulting in a profit margin of 10.8%.
Wilson contends that these profits are being made “off the backs of disabled children” at a time when local councils are facing financial pressures.
She characterized the situation as “an absolute scandal,” accusing private equity-backed firms of exploiting the shortage of SEND education provision.
“Children with special educational needs deserve the best possible support, and should not be viewed as cash cows for vulture firms,” she stated.
The Lib Dems stated that firms exceeding the 8% margin could face sanctions if the proposal is implemented, including returning excess profits to local authorities.
The proposed cap would mirror “similar measures” considered by Education Secretary Bridget Philipson in November to cap profits for companies that run children’s homes in England.
The Lib Dems maintain that the cap would not reduce competition or worsen access to special school places.
Instead, the party stated that the cap would be accompanied by efforts to expand state-run specialist provision, including support for councils to build their own schools and the rapid rollout of 66 new special free schools currently in development.
Ministers are considering a major shake-up of the SEND system, with details due to be set out in a Schools White Paper later this year.
A Department for Education spokesperson stated: “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.”
The government is setting out plans to “requires all schools to be firmly focused on improving children’s outcomes – not excessive profit-making,” the spokesperson added.
In December, the government announced £740m in new funding to support SEND pupils and those needing alternative education, which the spokesperson said encourages “councils to create more specialist places in mainstream schools.”
Sign up for our Politics Essential newsletter to keep up with the inner workings of Westminster and beyond.
“`