On 22 October the Senedd will decide whether a new law that makes changes to children’s and adults’ health and social care will move a step closer to becoming a reality. Some of the biggest changes the Health and Social Care (Wales) Bill would introduce are to:
- put measures in place to stop profit being made by providers of accommodation for services for children in care; and to
- make Direct Payments possible for NHS Continuing Healthcare (CHC).
Our summary of the Bill explains these and other planned changes to the law.
In this first of our two articles, we look at the main impact this Bill could have on children and young people. Our second article will be published on Monday and looks at the Bill’s impact on adults and disabled people. Both will set out key themes from a Committee report on the first stage of the Senedd’s legislative process.
Doing nothing is ‘really not an option’
Minister for Children and Social Care, Dawn Bowden MS, explained the rationale for this legislation by saying that “doing nothing in this area is really not an option for us”. She went on to say that that care experienced children and young people don’t want to be treated as commodities and that the costs of the current system are “unsustainable” for local authorities, explaining:
“In 2016-17, I think the cost to local authorities of looked-after children was around £65 million. We’ve seen that increase in less than 10 years to nearly £200 million; […]. Somewhere in the region of 20 per cent to 25 per cent of that is being extracted as private profit (…) if we continue on this trajectory, we are going to see within another 10 years potential costs for looked-after children approaching £1 billion.”
How will the Bill ‘restrict’ profit and when?
The Bill will require providers of restricted children’s services that are registered with Care Inspectorate Wales to be a “not-for-profit” entity, as defined in its Explanatory Memorandum (EM). Only these providers can legally provide placements.
- The intention is that from April 2026, new providers registering with Care Inspectorate Wales must have a “not-for-profit” status.
- From April 2027, there will be transitional arrangements for existing “for profit” provision (there will be some exceptions).
- There are powers in the Bill to stop ‘for profit’ entities from accommodating any new child after a certain date (yet to be specified). The Minister has said there could be different a end dates for local authorities to transition: “for different purposes, for different cases and for different areas”.
- Longer term, the plan is that local authorities would need to get approval from Welsh Ministers on a case-by-case basis if they wanted to place a looked-after child somewhere other than a ‘not-for-profit’ entity. This would then be called a ‘supplementary placement’ although the full detail of how this process would work is yet to be decided.
- After all transitional provisions have ended, these supplementary placements would have to be in England, because only ‘not for profit’ entities could legally register in Wales under the Bill’s provisions.
Concerns include ‘sudden and critical shortage of placements’
The Welsh Government concluded from its consultation on proposals for the Bill that the “proposed timing of the introduction of the requirements for existing providers of 1 April 2027 was felt to be overly ambitious and carried with it a risk to the safety of children and young people who require a good quality, registered and stable placement”.
The WLGA has also said that “if current for-profit providers decide to exit the market or reduce their services, there is a risk of a sudden and critical shortage of placements, especially for children with complex needs”. The Committee was told of a range of concerns which include that there are:
- Demands that already outstrip supply: Councils have faced significant and long-term challenges in making sure they have enough accommodation for the children they ‘look after’. The Bill’s EM. refers to ‘demand outstripping supply’. It says, “there is an insufficient supply of residential and foster care placements to meet the wide-ranging needs of our looked after children population”.
- Nearly 2,000 children in private placements: As of June 2023, the Welsh Government estimates that 1880 children are placed by Welsh local authorities in independent/private placements in Wales (1284 placed with independent foster agencies and 596 placed with independent residential providers). The Committee heard that 7 of the 22 local authorities have all their entire residential provision in the ‘for profit’ sector.
- More looked after children and with increasingly complex needs: Despite polices and funding aimed at reversing the trend, the numbers of looked after children have increased significantly. 7,210 children were looked after by Welsh local authorities as at 31 March 2023, an increase of 26% since 2014. ADSS and WLGA say cases are becoming more complex.
- Shortages within the children’s social care workforce: The Chartered Institute of Public Finance and Accountancy say the “there is the risk that eliminating the profits of providers will lead to a series of significant, unintended consequences” including “workforce leaving the market during a time when there is a workforce crisis” and a loss of skills. The Senedd’s Children, Young People and Education Committee has already found that in 2021-22 of a workforce of 4,774 posts there were 639 vacancies in children’s social work teams across Wales. Social Care Wales said that November 2023 that 17.5% of children's social workers work for an agency.
We “don’t want to be advertised with a price tag”
Care experienced young people gave evidence to this first stage of Senedd scrutiny, with one young person saying:
“Children in care want to be looked after by people who treat them as if they were their own. They ‘don’t want to be advertised with a price tag’”
Rowan Gray went on to say:
“I agree with the Bill—I so heartedly agree with it—but my biggest concern, if and when it does get stopped, is that all these companies are just going to end up packing up and just going elsewhere, because they no longer are able to profit off us, and that's going to cause a lot of problems for all the kids that are being looked after by all these different companies.”
What next?
The majority of the Health and Social Care Committee supported the general principles behind this Bill but made 26 recommendations for change, with 16 of these relating to children’s social care So while there is broad support by many for the principles behind this Bill there are still big questions as to how it will work in practice. Committee Chair Russell George MS said:
“More than one child in every hundred children in Wales is now in care. Their needs must be central to any reform which passes through the Senedd. Whilst the ambition is clear, the Welsh Government’s plan for making it work is not.”
Article by Sian Thomas, Senedd Research, Welsh Parliament
