That’s the idea behind a new proposal just recently announced by the Liberal Democrats. They want to limit total profits to 8% for privately-operated schools for children with special educational needs and disabilities (SEND). This action comes on the heels of the shocking profits raked in by several of these firms. Local councils are already under significant financial pressure, and these results have caused alarm bells to ring.
For context, recent reports have found that many companies operating in the SEND market make annual profits upwards of £60 million. One notable provider earned £44 million in profit from an annual turnover of £208 million, showcasing a staggering profit margin exceeding 20%. In the latter example, another consulting firm shared in the winds on impressive profits of £20.9 million. With a turnover of £194.2 million, that makes for an extraordinary profit margin of 10.8%. Tellingly, one company’s earnings jumped by 60% in only two short years. This growing trend has caused concern among advocates for children with disabilities.
Munira Wilson, the Liberal Democrat spokesperson for education, emphasized the need for reform, stating, “Children with special educational needs deserve the best possible support, and should not be viewed as cash cows for vulture firms.” She continued to argue that current profit levels are out of line and that they need to be rolled back with an 8% profit cap. The cap and other provisions included in the legislation are designed to keep the profit motive from overshadowing the important mission of producing quality educational results for students.
Local councils are under more pressure than ever financially, strained by soaring costs and decreasing funding. In addition to the Lib Dems’ plan, there are important enforcement mechanisms to impose sanctions on firms making more than the proposed profit margin. Such sanctions could even push firms to repatriate windfall profits to the municipalities. This would provide some substantial financial relief to many councils that are financially hanging by a thread.
The Liberal Democrats commit to increasing state-run specialist provision so that all children with SEND can be properly supported. This expansion will encourage district councils to start constructing their own schools. Home We’ll open 66 new special free schools quickly and all over the country. This effort would help prevent children with special needs from being denied the robust educational opportunities to which they are entitled and prevent undue reliance on profit-driven private providers.
A spokesperson from the Department for Education commented on the situation, saying, “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.” They stressed the importance of ensuring that “all schools are firmly focused on improving children’s outcomes – not excessive profit-making.”
