Private equity companies have quietly expanded their footprint in UK public services, from elderly care homes to fostering placements, often with dire consequences for staff and vulnerable people, according to experts and multiple sources.
Compass Community: rapid expansion under private equity
Compass Community, a private equity-backed provider of children's homes, fostering, and special educational needs schooling, was sold by Graphite Capital to Cap10 in May 2024. The sale followed a model of buying companies, maximizing assets, and reselling for profit. Staff reported intense pressure to open homes and admit children even without adequate staffing. One staff member said: "There was growing pressure to open homes and fill those homes, despite having no managers. We started this strategy which was basically: employ anybody." After the sale, the "frenzy just doubled" as Cap10 sought rapid growth, leading to intolerable pressure, managerless homes, and staff leaving meetings in tears.
Ofsted inspections reveal decline
Ofsted reports document a rapid descent. A Compass home for six children, rated "good" in 2023, was rated "inadequate" in April 2025. Inspectors described it as "chaotic," with children climbing on the roof and having sexual intercourse "unnoticed by staff." High distress led to self-harm, children going missing, and "riot-like" behavior. Another home for eight children, previously "outstanding," became "inadequate" in 2025 without a manager; staff could not keep children safe, and decisions were made by people lacking understanding of the home. Restraint was poorly recorded, and staff frequently took time off due to feeling unsafe. A former staff member said: "They're treating children like cattle, and scapegoating everybody on the way out."
Cap10 and Graphite Capital respond
Cap10 said it "strongly rejects the suggestion that standards declined at Compass Community following the change of ownership in 2024, or that decisions about children's care are driven by financial concerns." A spokesperson noted that new leadership appointed in 2025 closed or suspended homes, strengthened safeguarding, and improved recruitment. They added: "Today, 88% of Compass homes are currently rated 'good' or 'outstanding,' compared to a national average of 83%." Graphite Capital also rejected allegations, calling them "completely false" and stating that "the welfare of children was always the organisation's overriding priority."
Broader concerns: a 'financial pandemic'
Economists and politicians have described private equity's takeover of British services as a "financial pandemic." Sarah Longlands, chief executive of the Centre for Local Economic Strategies, said: "This is public money, our money, that we're talking about. But the way in which private equity companies are structured puts downward pressure on a service, and ends up creating an environment which is really bad for workers." Experts also worry about firms going bust due to high debt levels, leaving local authorities to pick up the pieces.
NRS Healthcare collapse leaves disabled without equipment
NRS Healthcare, owned by Graphite Capital since 2019, was one of England's biggest suppliers of disability equipment. It collapsed into administration in August 2024, leaving hundreds without mobility aids or stuck in hospital. The company worked with 44 local authorities. Industry sources said it may have undercut competitors with unsustainable low prices to expand rapidly, though Graphite Capital blamed "macroeconomic and sector-specific challenges," including higher operating costs, inflation, and a rise in the national living wage. The collapse severely affected families like Nataleigh Buckley and her 10-year-old son Laigan, who has spinal muscular atrophy. He was left without a suitable wheelchair for months after surgery. Buckley said: "He lost everything... He got really upset because he said he felt like he was more of a burden than he was previously." Charity Newlife stepped in to source a new wheelchair, but its campaigning and public affairs manager Ceara Chamberlin warned: "While charities like us are stepping in, this must not become the norm."
Long-term costs of privatisation
Longlands argued that bringing services back under local authority control, though initially expensive, is necessary: "When social care goes wrong, it's hugely expensive for the local authority, for the NHS, for the legal cases... So it's about investing now to save later."
