Town hall leads have called for a ban on independent agencies offering foster carers cash to switch from working for local authorities.

The Local Government Association (LGA) said these ‘golden hellos’ - which are often worth thousands of pounds – can lead to higher costs for council services.

After training the foster carer at the taxpayer’s expense, the local authority can end up being charged double or more to buy their services back from an independent agency.

‘Offering “golden hellos” to entice foster carers away from councils does nothing to increase the number of carers available in our increasingly over-stretched system, and nothing to improve the lives of the children and young people who need our help the most,’ said the chair of the LGA’s children and young people board, Cllr Richard Watts.

‘It all too often forces councils to pay higher fees for fostering services, which only serves to cut the amount of money available to help all children.’

The Government’s foster carer adviser, Sir Martin Narey, recently highlighted that eight agencies made £41m in profits in 2014/15 and the LGA said this money would be better invested in improving services for vulnerable children.

‘The fact that just eight commercial fostering agencies can make more than £40m in profits in one year is completely unacceptable,’ added Cllr Watts.

‘Profits of that level simply cannot be justified at a time when the public sector is facing enormous financial strain and is having to cut services to make ends meet. That much money could pay for the care of more than 1,200 of society’s most vulnerable children, be invested in improved support for foster carers or fund an extensive recruitment campaign to help find some of the 9,000 new carers needed to meet current demand.’