Private providers of special educational needs and disabilities (SEND) schooling should have their profits capped to stop “shameless profiteering,” the Liberal Democrats have said.
Research commissioned by the party has found some firms make tens of millions of pounds annually, with profit margins exceeding 20%.
The party’s education spokesperson Munira Wilson said profits should be capped at 8% to stop money meant for SEND children going “into the pockets of shareholders”.
Responding to the research, the government said Labour were requiring schools to focus on “improving children’s outcomes – not excessive profit-making”.
House of Commons Library analysis commissioned by the Lib Dems found several leading providers of SEND education, some backed by offshore private equity firms, have seen their profits surge in recent years.
One provider reportedly made over £44m in profit on annual turnover of £208m, and saw a 60% jump in profits in just two years.
Another made £20.9m in profit from £194.2m in turnover – a profit margin of 10.8%.
Wilson argued profits are made “off the backs of disabled children” and at a time local councils face financial strain.
She described the situation as “an absolute scandal” and accused private equity-backed firms of exploiting the shortage of SEND education provision
“Children with special educational needs deserve the best possible support, and should not be viewed as cash cows for vulture firms,” she said.
If implemented, firms exceeding the 8% margin could face sanctions, including returning excess profits to local authorities, the Lib Dems said.
The proposed cap would mirror “similar measures” floated by Education Secretary Bridget Philipson in November to cap profits for companies that run children’s homes in England.
The Lid Dems insist the cap would not reduce competition or worsen access to special school places.
Instead, it would be accompanied by efforts to expand state-run specialist provision, according to the party – including support for councils to build their own schools and the rapid rollout of 66 new special free schools currently in development.
Ministers are considering a major shake-up of the SEND system, with details due to be set out in a Schools White Paper later this year.
A Department for Education spokesperson said: “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.”
The government is setting out plans to “requires all schools to be firmly focused on improving children’s outcomes – not excessive profit-making,” the spokesperson added.
In December, the government announced £740m in new funding to support SEND pupils and those needing alternative education, which the spokesperson said encourages “councils to create more specialist places in mainstream schools.”