Just to remind, you can tell all sorts of political lies with numbers

On seeing this we thought we’d better change our line of business. Net profit at 20% of turnover? Why aren’t we - and everyone else - piling into this sector?

Revealed: top 10 children’s care providers made £300m profits

Concern at growing role of private equity as councils struggle to meet spiralling costs

Sounds like the very thing, doesn’t it? Such profits must mean gross undersupply and thus plenty of room for us and others to fatten our own wallets:

Profits among the top 20 providers of care home and fostering places now amount to 20% of their income.

We thought we’d check though, for such margins are most, most, unusual outside the racier sort of tech operation. This is last year’s report on the same issue but they’ll not have changed their measurement method:

Aggregate profits measured using the popular EBITDA method (Earnings before Interest, Depreciation and Amortisation) amount to £265 million at an EBITDA margin of 17.2%.

Ah, they’re not in fact measuring profit at all.

There is a spectrum in politics concerning numbers. One can tell the truth, be misleading, that shades into casuistry and then to flat out lying. We’ll leave it as an exercise for the reader as to where this particular measure belongs on the spectrum.

So, one is doing children’s care, children’s homes. Which rather implies that there’s a home, a building, in which this is being done. Businesses, just like us individuals, tend to borrow on a mortgage to pay for those buildings. The interest bill on that borrowing is a cost of being in business - a substantial one. As is putting money aside each year - depreciation - to do the necessary reworking, repair and general maintenance on those very buildings.

As with anything property based in Britain these days these costs will be substantial.

So, the measurement of “profit” being used here is one before a substantial portion of the costs. That is, it’s not profit at all. It’s margin before interest, amortisation, depreciation.

Or, somewhere on that spectrum from truth to lying - again something for the reader to specify.

Just to make one further point. The second part of the report worries about the debt levels at these companies. Measuring profitability before interest plus also being concerned about high debt levels does strike us as being very close to cakeism. But then that’s rather the art of using numbers in politics, isn’t it?