Recommendation 25

The Department described the significant levels of profit for some suppliers as the reason it introduced provisions in the Children’s Wellbeing and Schools Bill for a profit cap.69 The Bill will also introduce a financial oversight scheme covering those providers deemed hardest to replace. The Department acknowledged that how it will use the scheme will be covered in further regulation.70 The Children’s Homes Association told us that the scheme would provide an early warning system that providers might fail, but that it did not consider the scheme robust enough to reduce the numbers of private-equity-owned providers.71 One existing model for such an oversight scheme is that operated in the adult social care market by the Care Quality Commission, which has a dedicated financial sustainability function which oversees around 65 of the largest and most significant care providers across England, representing around 30% of its overall care market.72 62 Qq 18, 50, 74 63 Qq 75-76 64 Qq 50, 74 65 C&AG’s Report, para 2.3 66 Qq 2, 22; C&AG’s Report, para 2.4. 67 Q 18 68 Q 50 69 Q 50 70 Q 74 71 Q 22 72 C&AG’s Report, The adult social care market in England, 25 March 2021, para 2.22 16 Co-operation between local authorities