By Jamie Roberton

Children in care are being failed despite the government “spending an absolute fortune”, the education secretary told Channel 4 News.

Bridget Phillipson promised the biggest overhaul of children’s social care “in a generation” to break away from what she said was a “cycle of crisis” costing the country “billions and billions”.

Average spending on children’s residential homes in England and Wales has risen by 137% since 2018, a Channel 4 News freedom of information request has revealed.

Some 17% of responding councils reported an increase in spending of more than 200%.

Ms Phillipson highlighted measures in England to cap the profits of private providers of children’s homes, empower multi-agency safeguarding teams and ensure care leavers are supported until they are 21.

The number of children in care in England has reached 83,630, according to the latest government statistics – an increase of more than 20% in a decade.

Child protection inquiries are also at a record high, with around 600 inquiries opened every day in England last year.

Describing her view of the current treatment of children in care, Ms Phillipson said: “It’s a real stain on our society.”

The Education Secretary admitted the announced measures would not benefit from fresh funding, admitting he “would have liked to go further” but the economy was “in a terrible mess”.

“We have to change what we do”

Ms Phillipson said social workers were doing a “phenomenal job” under “extreme pressure”.

But asked what those frontline workers would think of her direct assessment of the current system, Ms Phillipson replied: “It’s just a fact.”

She added: “As a country we are failing children coming through the care system and we are failing families.

“The reality is that we’re spending billions and billions as a country on crisis-level interventions that aren’t working with terrible outcomes for children – we need to change what we’re doing.”

She said earlier intervention and support for families was a priority under the reforms, with money diverted into domestic violence, substance abuse and mental health to “keep children and families together”.

Private providers run 83% of all children’s homes in England, with the top 20 independent firms estimated to bring in more than £300m in profit in 2022.

“Crack down on excess profit”

The government’s competition watchdog concluded the same year that the UK had “entered a dysfunctional market in child welfare”.

The education secretary said it was “hard to escape the conclusion” that some private providers were treating children in care as “cash cows” as she pledged to fight against profiteering by bankrupt firms.

Asked about the risk of suppliers leaving the market due to tighter profit controls, Ms Phillipson said “we will do this carefully” but greater financial oversight was needed.

“Private providers are stepping in and charging local councils exorbitant costs, putting them under enormous pressure,” she said.

“We are absolutely determined to crack down on excess profits in the sector.”

“When you turn 18, it’s like your time is up”

Tayahnay had been known to child protection services for several years when she ran away from Nottingham to London aged 16.

The fashionable student then became a victim of what campaigners claim is the current ‘cliff edge of care’, being told months before her 18th birthday that she would have to leave the accommodation she was living in.

This was due to so-called local connection test rules – which determine eligibility for support – and forced her off the housing register.

“Most girls, when they get to 18, they just want to enjoy their birthday, go out with people, go clubbing for the first time and enjoy it normally.

“But getting to 18 was just a struggle. Every conversation I had revolved around me thinking I was going to be homeless.

“It felt like all the strength I had was basically stripped away and I felt really helpless.”

The 18-year-old is now living in a hostel ‘in limbo’ as she struggles to get on with building a life in London.

The Government has promised to take action on local connection rules to better support care leavers.

Asked what else she wants the government to do to improve support for children in care, Tayahnay said: “When you turn 18, it’s like your time is up.

“Several things need to be implemented. Care leavers actually want to live the same life that everyone else is living and they don’t want to feel slighted because of the life they were forced to grow up in.”

“You can’t separate poverty from what’s happening here”

Ms Phillipson also acknowledged the link between poverty and the number of children now in state care.

“You can’t separate poverty from what’s happening here,” she said, promising that work was underway in the government’s Child Poverty Taskforce.

Pressure remains on Sir Keir Starmer’s government to scrap the two-child benefit cap, including from former Labor prime minister Gordon Brown.

Responding to Ms Phillipson’s plans, a spokesman for the British Association of Social Workers said: “We welcome today’s announcement to stop for-profit providers of children’s homes, but ministers must go further and faster because the model it is defective.

“We should consider a direct model of public provision, where the government owns the burden of risk and the lines of responsibility and accountability are transparent.”