Making a buck - make that a pound sterling - off kids in need

There are certain services that shouldn’t be privatized, shouldn’t be profit-making, shouldn’t be under the control of rapacious capitalism.

Take healthcare. We have an excellent current example of what happens when private equity takes over a healthcare system. Steward, which runs a number of hospitals in Massachusetts (as well as in a few other states), has filed for bankruptcy. The owners have been pillaging the system for years, with proven profit-enhancing techniques like setting up an entity to acquire the buildings and grounds, then renting them back to the hospitals for bigger bucks than would be spent on property that the hospital still owned. Steward has also been cutting costs with practices that put patient care at risk. Case in point: a woman gave birth at a Steward-“run” hospital and experienced life-threatening complications that required a certain piece of equipment. Alas, that lifesaving piece of equipment had been repossessed for non-payment. By the time the poor new mom was transferred to a hospital that was paying its equipment bills, it was too late. She died, leaving a bereft husband and a baby girl who would never know her mother. Meanwhile, Steward’s CEO was swanning around in a $45M yacht.

Take prisons. Private ownership of prisons comes with a truly perverse incentive. In order to reap greater profits, the system needs to grow. And that means more prisons, and more prisoners. Which means supporting lengthier sentences for more and more crimes. Criminalization for everyone! Cost cutting matters, too. Which means worse food, fewer opportunities for education, and prisoners and their families paying outrageous fees for phone calls home and reading books online.

Take education. Profit-making schools can cherry-pick their students while siphoning off funds that should be going to cash-strapped public schools. It’s not all that difficult to imagine a local government giving a foundering public school system over to a private company, which decides that the best cheapest way to educate poor kids is to plunk them in front of a computer – at home, or in a hall – and interact with a remote teacher (maybe even a robotic remote teacher), depriving them of authentic learning opportunities. Meanwhile, rich kids will continue to have top-drawer teachers and first-rate learning.

Etc.

But I hadn’t thought about farming out care for children in need of special services to private entities until I saw a recent article in The Guardian about the increasing use of privatized children’s services in the UK.

Children’s residential care, foster care and special schools have steadily been taken over – with the blessing of successive governments – by profit-making companies. Private agencies now own 36% of the fostering sector in

England, while profit-making corporations own 83% of children’s residential care. “Blocks of provision” – which means numbers of children – are traded from one company to another. How much is a human being worth? The value of a child on the books, as the dedicated journalist Martin Barrow documents, is £100,000.

The UK is not alone. I couldn’t find comparable numbers for the US, but there’s plenty of this going on here as well.

Kids as commodities, chewed up and – once they no longer have monetary value –  spit out by capitalism. Because, when it comes to generating big bucks/big pounds, children’s services are where it’s at. Swell. Just swell.

Children in residential care, on average, generate £910 each of profit a week for the corporations that control them. Large commercial providers of children’s residential care make average profits of 19%, according to a report commissioned by the Local Government Association – an astonishing rate of return. Ordinary businesses do well to make 5%.

One local council in England pays an average of £281,000 to put a child in residential care. (That’s $357 USD, by the way.) Yes, these children have profound problems – physical, mental, social – with complex needs. Still…

And despite the enormous fees paid by the local governments, the private companies are driven by profit making. This often means putting their institutions in low cost areas. Which means that while a local government may be paying a lot for the care of their child citizens, those child citizens may be sent hundreds of miles away from home, depriving the child citizens of the comforts of homes: relationships with their parents, sibs, other friends and family, pets, familiar locations, community. All the things that make life worth living.

As with the Steward situation in healthcare:

In some cases, their business model looks like that of the privatised water companies: loading themselves with debt, sucking out profits and dividends, dumping risk, and creating what could be a highly unstable system. In some cases, their ability to service these debts relies on their enormous rates of profit. Were these to falter, they would collapse. Because a few large companies now dominate the sector, if one of them fails the effect could be catastrophic for thousands of their “transferable assets”, known to you and me as children in care.

All this is predicated on the warped notion that a private, profit-making entity will be better run and produce better results that anything the public sector can do. But if making money is the prime motivator, "better run" will translate into often brutal efficiencies. As for producing better results, if the prime result is making money, the metrics cited will likely be skewed. And there'll be no accounting for the isolated kiddo whose folks have to drive 300 miles to see them (or the new mother who dies because a $45M yacht for the CEO is more important than paying equipment bills.)

Making a buck  - make that a pound sterling - off kids in need is pretty disgraceful. The commoditization of children for sheer greed...Sadly, there doesn't seem to be any end in sight for privatization schemes. 

Sigh...