Proposals to ban ‘for profit’ providers from the Welsh children’s care home market have been voiced by the Welsh Government in a new consultation.
Proposals for primary legislation in relation to children’s social care run until 7 November 22 and proposes a provision in primary legislation that permits only not-for-profit providers to register as a care home service for children.
It is proposed that new providers registering with Welsh regulator Care Inspectorate Wales will have not-for-profit status from 1 April 2026. Any current ‘for profit’ providers will need to transition to, and register with CIW, as not for profit status by 1 April 2027.
In Wales over 80 per cent of care homes for children and young people are run by the private sector.
The Welsh Government says that feedback from children and young people suggests they have strong feelings about being cared for by privately owned organisations that make a profit from their experience of being in care.
For its part, Senedd does not believe that profits should be made from caring for children. Among its concerns are the following:
- Imbalance of provision and monies being extracted as profit lead to detrimental outcomes
- Private businesses are vulnerable to financial distress and market exit
- Where demand for places outstrips supply, children’s care homes are a seller’s market and this impacts on the prices charged to local authorities
A Competition and Markets Authority (CMA) report suggests that one in every £5 of profit is removed from care provision. “This is money… which could be re-directed to improving services, capacity and outcomes,” says the CMA.