Private equity firms taking millions in profits from care sector each year, new analysis reveals

Private companies operating care services in just three regions of England have taken more than £250m in profits in three years, new analysis has found.

A new report, Ending extraction in the UK care system, published today by Reclaiming Our Regional Economies (RORE) reveals how public money is being siphoned out of the care system rather than reinvested to improve services.

In 2024 alone, £3.8bn was spent by local authorities to fund care services in the North East, South Yorkshire and West Midlands combined authority regions. Yet not all of that investment is reaching those it is designed to support.

Between 2021 and 2024:

• £256m of profit was made by companies providing care services in these regions

• Over a third of those companies are owned by private equity firms or companies based in tax havens (or both)

• £45m was paid out in dividends to shareholders

• £33.6m was paid in interest, up to 60% of which went straight to private equity and tax haven owned companies

Directors of these companies were earning up to 60 times more than the average wage, while frontline care workers were often paid below the living wage.

The analysis was carried out by the RORE programme, a partnership between Centre for Local Economic Strategies (CLES), the Centre for Thriving Places (CTP), Co-operatives UK and the New Economics Foundation (NEF),

Leah Millthorne, report co-author and associate director at CLES, said:

“We all know there may come a time when we or someone we love needs care. Yet it is clear that too many people across the UK are not receiving the dignity and support they deserve.

“The vast majority of local authority budgets is spent on care services, but far too much of it is leaking out of the system, extracted as profit and investor returns, instead of providing better services and fair pay for workers.

“It does not need to be this way. The government could act, limiting how much can be taken out of public services and supporting further procurement reform so that more local authority contracts go to organisations that reinvest in care, not investors. Care should be a public good that strengthens our communities, not a commodity that drains them.”

Author Ann Cleeves, best known for the Vera and Shetland series of novels which have been turned into series for television, has backed the report’s findings.

She said:

“A short investigative piece from BBC Radio 4’s File on Four triggered a novel. My only angry novel, The Dark Wives. The programme described the lack of care and compassion in some of the UK’s privately run care homes, focussing on the troubled teens whose needs can only be met by skilled and properly trained staff providing consistent support. Instead, the experience of the residents was of agency staff who came and went without any opportunity to engage properly with the clients they should have been helping.

“I hadn’t realised then the extent of the problem and the way the system seems devised for the profit of investors rather than the benefit of the children. This report shows just how much money is siphoned away from the people who need it. Imagine how many lives could be changed if this cash were channelled into providing counselling, treatment and care. The long-term financial savings would be enormous, not just for the stretched local authorities paying these outrageous costs, but by keeping young people out of the criminal justice or mental health systems.

“Please read this report, be shocked and press for change.”

Rosie Maguire, report co-author and manager of policy and programmes at CTP, said:

​“Our new figures are just part of the picture we can get from publicly available information.

“We know there’s a deeper issue with big companies taking out even more money in debt payments and rent, but our systems are set up — from national to local level — to be unaccountable about where public money goes.

“We at RORE are calling for a move to a more open system which is fairer for tax payers, workers and caring for citizens.”

ENDS

Contact

James Rush – james.rush@neweconomics.org 
Jo Burkill — joanna@centreforthrivingplaces.org
Rosie Lockwood — rosielockwood@cles.org.uk 

Notes

The full report is available to read here.

This report presents a new primary analysis of extraction in the UK care sector, focusing on South Yorkshire, the West Midlands and the North East Combined Authority regions.

The research team analysed care sector contracts data from local authorities and combined authorities within the regions obtained from Tussell from 2011 to 2025, as well as the financial data for contracted suppliers receiving local authorities’ care spend payments, data from Companies House via The Data City.

For the 1,567 care suppliers identified in the contracts and spend data, we gathered financial data to understand profitability and extraction for the last three years.

Some form of financial data was found on Companies House by our data provider for 1,245 suppliers (covering around 90% of spend in 2023 – 24). Profit from local care provision was estimated based on the profitability of the overall company (EBITDA/​turnover) multiplied by the value of spend in local authority areas. Dividend and interest payments data was available for 551 companies making up around 65% of total spend.

Reclaiming Our Regional Economies (RORE) is a five-year programme, co-ordinated by four leading not-for-profit organisations, Centre for Local Economic Strategies (CLES), the Centre for Thriving Places (CTP), Co-operatives UK and the New Economics Foundation (NEF). The programme brings communities together with political and institutional leaders to test ideas that help to re-wire and reform their regional economies, so that they deliver good lives now and for generations to come. Each of the programmes’ three pilot regions (the West Midlands, South Yorkshire and the north-east) is exploring a different pathway which will enable programme teams to test and demonstrate the many routes to delivering, not just better regional economies, but also wider systemic shifts.