Senedd debates plans to remove profit from children care

Plans to remove profit-making from the care of looked-after children in Wales cleared the penultimate hurdle in the Senedd.

Senedd members agreed amendments to the Welsh Government’s health and social care bill, which aims to “eliminate” private profit, during a debate on January 28.

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If the bill becomes law, no new for-profit providers of children’s care homes, fostering and secure accommodation services would be able to register in Wales from April 2026.

And existing for-profit providers would need to transition to one of four not-for-profit models set out in the bill, varying their registration with Care Inspectorate Wales by 2030.

Dawn Bowden, Wales’ social care minister, told the Senedd: “Eliminating profit remains a very high priority for this government and we want to do that as quickly as possible.”

‘Far reaching’

Ms Bowden has warned the cost of caring for looked-after children has increased from £60m a decade ago to nearer £200m today, with councils facing a £1bn bill in 10 years’ time.

Mabon ap Gwynfor, for Plaid Cymru, supported the bill which was a key commitment as part of his party’s since-collapsed co-operation agreement with the Welsh Government.

He said: “The need for reform in this area has been apparent for years and it was clearly highlighted in the Competition and Market Authority’s report in 2022.”

The shadow health secretary told Senedd members: “Children’s experiences should be foremost in our considerations throughout this complex and far-reaching process.”

He warned access to independent residential visiting advocacy, which can help identify systemic abuse and harm in care homes, is unequal across Wales.

‘Garden path’

But his amendment to make such advocacy a legal requirement as a condition to register as a provider was voted down, as was a Conservative call for a more active advocacy offer.

Ms Bowden said the amendments would have overlapped an existing legal duty on councils to provide independent, professional advocacy funded by the Welsh Government.

James Evans, the Conservatives' shadow health secretary, reiterated his party’s opposition, warning the bill will only exacerbate the challenges faced by a critical sector.

“We fundamentally believe that it goes too far,” he said. “In the lead up to this bill, the minister led us to believe that this policy intention was to tackle excessive profits, and that profit itself was not the enemy here. However, it seems we were led up the garden path.”

Calling for a focus on outcomes rather than ideology, he accused the Welsh Government of “taking aim” at a huge number of smaller businesses in an invaluable but struggling sector.

‘Stifle’

Mr Evans said the minister has not been willing to address the issue of co-operatives and employee-owned entities being blocked from providing care services.

He told the Senedd the bill would send a message that the sector in Wales is closed for business, “even if your business is helping some of the most vulnerable people in society”.

Mr Evans warned: “Let’s be clear, this bill will not increase capacity in the sector. In fact, it

will almost certainly drive out some of the current capacity as well as stifle future expansion.”

Tory amendments aimed at allowing for "reasonable profit” were roundly rejected. Opposition amendments on oversight, unregistered placements and out-of-area placements also fell.

Welsh Lib Dem leader Jane Dodds told the Senedd that children and young people have said “time and again” that they do not want businesses profiting from their care.

‘Galling’

Ms Dodds, who was a child protection social worker for 27 years, said there was little more galling than placing a child knowing the provider would make money from them.

Ms Bowden, who plans to stand down at next year's election, stressed the policy intention behind the legislation was the removal of all profit, not only excessive profit or profiteering.

The Labour minister, who is also a member of the Co-operative Party, said co-operatives are required to be set up for the benefit of members which did not align with the policy

The bill now moves to stage four of the Senedd’s legislative process: a vote on the final version as amended during Tuesday night’s two-hour stage-three debate.

With Plaid Cymru broadly supporting the Welsh Government’s position, the bill is highly likely to be approved on February 4 before going on to receive royal assent.