A new report has laid bare how private equity firms have extracted billions of pounds from UK public services, including care homes and children's services, often prioritising profit over quality of care. The study, conducted by the Centre for Health and the Public Interest (CHPI), reveals that between 2010 and 2025, private equity-backed companies in the care home sector alone generated over £3.5 billion in dividends and management fees while saddling homes with debt.
Impact on Care Homes
The report highlights that the four largest private equity-owned care home chains in the UK—including HC-One, which is backed by a consortium led by the US private equity firm Apollo Global Management—accumulated debts of £2.8 billion by 2025. This debt burden has led to staff cuts, reduced spending on food and activities, and a deterioration in care quality. According to the CHPI, the number of care home beds in these chains fell by 15% between 2015 and 2025, while the Care Quality Commission rated 40% of homes as requiring improvement or inadequate.
Children's Services Under Strain
The report also examines private equity's role in children's services, particularly in children's homes and fostering agencies. It found that private equity-owned providers now account for 30% of the children's home market in England. These firms have extracted £1.2 billion in dividends and fees since 2018, while the number of children in care has risen by 15% over the same period. The report notes that staff turnover in these homes is 40% higher than in local authority-run homes, and Ofsted inspections have found that 35% of private equity-owned children's homes are not meeting required standards.
Regulatory Failures
The CHPI report criticises the government for failing to regulate private equity ownership in public services. It calls for a ban on the use of debt to fund dividends and for greater transparency in ownership structures. Dr. John Lister, co-author of the report, said: 'Private equity is treating essential public services as cash cows. The government must step in to stop this looting of our care system. The current regulatory framework is wholly inadequate to protect vulnerable people.'
Government Response
A spokesperson for the Department of Health and Social Care said: 'We are committed to ensuring high standards in care homes and children's services. We have introduced new measures to improve oversight of private equity ownership, including a review of financial sustainability. We will consider the report's findings carefully.' However, critics argue that the government has been slow to act, with similar concerns raised over the past decade.
Broader Implications
The report is part of a growing body of evidence highlighting the risks of private equity involvement in public services. Similar patterns have been observed in the US, where private equity ownership of nursing homes has been linked to higher mortality rates. In the UK, the report estimates that private equity firms have extracted over £10 billion from public services since 2010, including from hospitals, ambulance services, and social care. The CHPI warns that without urgent reform, the quality of care will continue to decline, and taxpayers will ultimately bear the cost of corporate debt.
