Vulnerable young people should no longer be sent across England to Rochdale's privately-run children's homes because their safety cannot be guaranteed, the leader of the council said last night.
The former mill town is host to 41 children's homes. At least 18 of them are owned by a private equity firm, including one where a child from Essex was sexually abused by a gang of nine Asian taxi drivers and takeaway workers.
Of the 64 children in care in Rochdale, only one originates from the town. The rest have been sent from elsewhere under contracts signed between councils and private providers, worth up to £250,000 a year. However, once a child arrives there is no statutory requirement that doctors, police, the education authority or social workers be informed of their presence as they remain under the care of their home authority.
Rochdale council leader Colin Lambert said the current dispersal system, was a "disgrace and a scar not on Rochdale but the whole of England."
There are 65,000 children in care in England – about a third of whom are being looked after outside their home authority. The situation has become pronounced in the North-west where cheap property prices including converted pubs have attracted providers.
While Rochdale has 41 homes, Haringey in north London, which is a similar size, has nine. Only three of Rochdale's children's homes are council-owned.
Last week The Independent revealed that the parent company of the care home at the centre of the Rochdale grooming trial was sold at a loss by private equity house 3i just days before the jury returned its guilty verdicts. One of the 15-year-old victims sexually abused by the gang was living in a solo home owned by Green Corns Ltd. The company said there was no link between the timing of the sale and trial's conclusion. The deal included18 solo homes in Rochdale run by Green Corns, a subsidiary of Continuum Care and Education Group which was acquired by Stockport-based Advanced Childcare Ltd in April It is owned by London and California-based private equity company GI Partners.
The company said it was undertaking a full review of policies, procedures and systems to re-affirm the safety of children and young people.