The Liberal Democrats (Lib Dems) have made a strong call to impose a profit cap on private entities operating within the realm of special educational needs and disabilities (SEND) schools. This initiative seeks to combat what party officials describe as “shameless profiteering.” The recent research commissioned by the party indicates that several private firms generate substantial profits—some at rates exceeding 20%—with annual earnings reaching into the tens of millions of pounds. Education spokesperson Munira Wilson stated that profits should be restrained to no more than 8% to ensure that funds meant for SEND children do not line the pockets of shareholders.
In response to this initiative, the government countered that the Labour party is focusing schools on optimizing children’s outcomes rather than prioritizing excessive profit margins. The emphasis here is on placing the well-being of the children at the forefront rather than allowing corporations to gain financial advantage from vulnerable populations.
A deeper analysis conducted by the House of Commons Library on behalf of the Lib Dems revealed a troubling trend: several prominent SEND education providers, many of which are backed by offshore private equity firms, have witnessed their profits skyrocket in recent years. One notable provider achieved over £44 million in profit from an annual turnover of £208 million while experiencing a staggering 60% profit increase within just two years. Additionally, another company reported £20.9 million in profit from a turnover of £194.2 million, yielding a profit margin of approximately 10.8%.
Munira Wilson strongly articulated the Lib Dem position, arguing that these profits are ultimately derived “off the backs of disabled children,” especially at a time when local councils are grappling with significant financial constraints. Wilson described the situation as “an absolute scandal,” accusing private equity-backed firms of taking advantage of the existing shortage in SEND educational provision. She emphasized that children with special educational needs deserve the highest quality support and should not be considered mere revenue sources for opportunistic firms.
The Lib Dem proposal stipulates that firms exceeding the 8% profit margin could face potential repercussions, including the requirement to return excess profits to local authorities. This profit cap mirrors similar measures proposed by Education Secretary Bridget Philipson last November, aimed at limiting profits for companies managing children’s homes in England.
The party firmly believes that instituting a profit cap will not stifle competition or result in reduced access to special school placements. Instead, they assert that it should be coupled with initiatives to enhance state-operated specialist educational provisions. These initiatives include granting councils the necessary support to establish their own schools and accelerating the rollout of 66 new special free schools currently in progress.
As the government prepares for a significant reform of the SEND system, details for which will be unveiled in the upcoming Schools White Paper later this year, there is attention to the systemic failures that have plagued families reliant on SEND support for too long. A spokesperson from the Department for Education expressed concern that some companies are profiting from the prevailing crisis, stating the necessity for all schools to concentrate on improving children’s outcomes rather than focusing on excessive profit-making.
Furthermore, in December, the government announced a new funding allocation of £740 million to assist SEND pupils and others requiring alternative education. This funding is seen as a strategic move to encourage councils to develop more specialist placements within mainstream schools, directly addressing the needs of vulnerable student populations.
As this issue unfolds, the Liberal Democrats and the government appear to be preparing for significant changes in how SEND education is provided and funded, influencing the future landscape of education for children with special needs in the UK.
