Liberal Democrats call for profit cap on “profiteering” private SEND providers

House of Commons Library research, commissioned by the Liberal Democrats, has revealed that the top private equity companies providing SEND schooling have seen their annual profits increase as the SEND crisis has worsened, with some making margins of over 20%. 

Meanwhile, Bristol City Council is facing a £63 million hole in its school budget, largely due to the increased demand and growing cost of providing SEND services. At the same time, 1,276 children are on a waiting list for an assessment that secures them the support they need. A total of 4,931 children in Bristol currently have one of these plans, called Education, Health and Care Plans (EHCPs), which legally sets out the support they require.

In Bristol, one of the national firms making a profit from SEND provision is set to open two schools by the end of the year. Avonside School in Brislington East and Manor Wood School will operate under the Acorn Education name. Outcomes First, the parent company, made a profit of £7.1 million in 2024.

The SEND crisis has led to local authorities across the country facing exorbitant costs for private provision, while further figures have revealed that home-to-school transport for SEND young people cost £1.42 billion between 2023 and 2024.

Council finances are being pushed to the brink, with many facing bankruptcy or having to reduce or end service provision for vulnerable groups. Bristol’s budgets too are stretched thin, with a £52m deficit that needed to be filled in this year’s budget.

Liberal Democrats are pushing for private providers of special needs education – some of whom are backed by private equity companies based in tax havens or foreign sovereign wealth funds – to face profit caps of 8% to curb excessive profiteering off the backs of disabled children.

Bristol Liberal Democrats have criticised these companies for “exploiting” the crisis in the SEND system, and has echoed their party’s calls to introduce an 8% cap on their profits. 

Cllr Andrew Varney, Liberal Democrat Councillor for Brislington West said: 

“It is totally unacceptable that top private SEND providers are lining their pockets exploiting a SEND system in crisis, while children are being failed every day.

“SEND provision is a key issue for many parents across Bristol, so I am deeply concerned to see this greedy profiteering from private equity firms. It is a major driver of the crisis in our SEND system.

“The Government needs to cap the profits of these firms at 8%, to ensure that money is channelled back into the SEND system, and not into the pockets of shareholders. It's time to put provision over profits - our young people deserve so much better.”

ENDS

Notes to Editor:

EHCP data, including plan numbers broken down by mainstream and special provision, can be found here. 

The average operating profit margin across all for-profit entities calculated by the Office for National Statistics (ONS) is 8.8 per cent. The Education Secretary has previously said that this could form the basis for a profit cap in the Children’s Social Care sector. 

Please see the research by the House of Commons Library here:

• Outcomes First Group (Oasis Topco 1 limited): Only available for the year to 31 August 2024 when turnover was £264.3 million and operating profit £7.1 million.
  • In Bristol they are set to open and operate Manor Wood School (Bishopsworth) and Avonside School (Brislington East) under the Acorn Education academy name this year.
• Aspiris Holdco limited: Turnover was £192.5 million and operating profit £19.2 million in the year to August 2023. Turnover was £194.2 million and operating profit £20.9 million in the following year.
• Witherslack Group Limited: Turnover was £172.8 million and operating profit £34.8 million in the year to August 2024. Turnover was £208.0 million and operating profit £44.6 million in the following year. Director salaries in the company’s Full Accounts 2024.
• CareTech Holdings Limited: Revenue was £574.6 million and operating profit £12.2 million in the year to September 2023. Revenue was £630.4 million and operating profit £53.4million in the following year.