Private Equity's Grip on Child Care: A Descent into Chaos

Private equity firms have significantly increased their involvement in critical public services, including elderly care and child welfare. Compass Community, a provider of children's homes and special educational needs services, experienced a sharp decline in standards following its acquisition by private equity group Cap10 in May 2024. Sources within the company report intense pressure to rapidly open more homes and admit more children, even with insufficient staffing and management.

Ofsted inspections revealed a stark deterioration in care quality. One home for six children, previously rated "good," was deemed "inadequate" in April 2025, citing chaotic conditions, children climbing on roofs, and sexual activity unnoticed by staff. Another home for eight children, once "outstanding," also received an "inadequate" rating due to safety concerns and poor decision-making by uninformed personnel.

These issues have led to closures of care homes, staff suspensions, and disciplinary actions. Critics argue that private equity's profit-driven model creates downward pressure on services, harming workers and compromising care quality. The collapse of NRS Healthcare, a major disability equipment supplier owned by Graphite Capital, further exemplifies the risks, leaving hundreds without essential mobility aids.

Cap10 stated that new leadership in 2025 addressed issues by closing or suspending homes and strengthening safeguarding. They reported that 88% of Compass Community homes are now rated "good" or "outstanding." Graphite Capital denied allegations of undercutting competitors at NRS Healthcare, attributing financial issues to external economic challenges and increased operating costs.