While ministers insist there is “no place for profiting” in now the nation cares for its children it accepts that companies will still deliver surpluses.
While fostering agencies cannot earn profits, residential childcare companies that also support fostering placements are free to do so — and some are paying directors eye-watering sums.
The Herald revealed that Edinburgh-based operator, Care Visions Limited — which describes itself as Scotland’s largest independent provider of children’s homes, running 28 residential services — paid its highest-earning director £752,048 over two years to October last year. The sum is roughly twice the First Minister’s salary and represents a £119,181 increase on the previous year.
Many other companies’ pay structures remain hidden behind complex corporate arrangements. Amalfi Cleanco Limited, which owns and invests in a wide range of residential care services across Scotland, the UK and overseas, awarded its top director £1.226 million in 2024 alone.
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The think tank Common Weal, which has been tracking the financial and ethical landscape of Scotland’s childcare sector, has told ministers to outlaw profit-making residential care altogether. It argues that current provision is “financially opaque” and fundamentally at odds with the duty to protect vulnerable children.
Children and young people minister Natalie Don-Innes stood by a decision not to ban profits (Image: Natalie Don-Innes MSP)
As Ms Don-Innes stood by Scottish Government stance to limit rather than ban profits, she admitted that “some of the figures” relating to profits “were very disappointing” and said more needed to be learnt.
Quizzed at the Scottish Parliament, she said: “There is no place for profiting in how Scotland cares for its children, which is why we are legislating to limit the ability to generate and retain profit while providing residential care.”
She said a bill currently being considered “strikes a balance between reducing excessive profit in residential childcare while ensuring vital services for children are maintained”.
She said: “If passed by Parliament, the bill will further accelerate progress towards ensuring all children and young people receive the compassionate and considerate care that they need throughout their care journey, so that they grow up loved, safe and respected.”
Last year it emerged Scotland’s councils had given up to £200m to private firms over a three period after The Promise to provide residential care for children and young people.
And there are concerns that profiteering goes against the pledge that “there is no place for profiting in how Scotland cares for its children” made in The Promise, the final report of the 2020 Scotland’s Independent Care Review. Scottish ministers and local authorities have said they were committed to keeping The Promise by 2030.
Asked further about the levels of profiteering, the minister added: “I think some of the figures highlighted in the report are shocking, but obviously we’ll need to consider and look into those further.”
She admitted: “I would say is I’ve had a fair amount of concern around the provisions in the bill. But you know, we need to be really clear as to why we’re doing this. “Of course, it is very important that we understand the level of reinvestment and where that profit might be being spent appropriately. That is exactly why we are taking the steps to understand this picture more clearly with the aim of limiting excessive profits.
Scots private childcare chiefs are pocketing salaries up to twice that of the First Minister while companies rake in huge profits — despite government promises to stop anyone cashing in on vulnerable children. ( (Image: Newsquest)
“I believe that the provisions that we are taking in the bill strike that balanced approach that will allow us in time to ensure that we are not seeing any excessive profit.”
The Competition and Market Authority told ministers in the 2022 analysis that the largest private providers of placements were making “materially higher profits and charging materially higher prices”, than they would expect.
The business regulator’s review of the children’s social care market covering the year 2016 to 2020 showed that children’s homes had accumulated an estimated average of £28,000 in profit per child.
Ministers have argued that there is already an understanding that organisations will reinvest profits in order to make enhancements to their services which will benefit children and young people, such as upskilling their workforce or making improvements to homes and buildings.
They hope to use the Children and Young People (Care and Services Planning) (Scotland) Bill, to further propose that private childcare service providers give financial and other information over its operations directly to them.
There were estimated to be 359 registered children’s homes in Scotland as of March 2025 and 171 — or 46% — are privately operated. Between them they offer over 2000 places.
