Source · Select Committees · Education Committee
Recommendation 26
26
Accepted
Assess necessity of a profit cap for children's social care providers and consult Committee.
Conclusion
The Department for Education must set out how it will assess whether a profit cap on children’s social care providers is necessary. If the Department decides to introduce a profit cap, it must consult this Committee on the draft regulations before they are laid before Parliament. (Recommendation, Paragraph 61) The care system
Government Response Summary
The government commits to assessing the necessity of a profit cap only if other market interventions fail, by monitoring profit levels, market state, and placement data. It also commits to consulting the Committee on draft regulations should a profit cap be introduced.
Government Response
Accepted
HM Government
Accepted
We are committed to taking a measured approach to implementing our reforms of the children’s social care placement market. We are acutely aware of the importance of not destabilising the market and risking significant disruption to the care our most vulnerable children and young people receive. As we set out in ‘Keeping Children Safe, Helping Families Thrive’, we are making several interventions which we expect to drive down profiteering. Only if these measures are not successful would we consider introducing a profit cap. The Children’s Wellbeing and Schools Bill specifies that regulations may only be made if the Secretary of State is satisfied it is necessary on value for money grounds. The Secretary of State will need to be in a position to assess the levels of profits being made by providers so that she can determine whether it is necessary to introduce a profit cap. We will also take account of the state of the market more generally in advance of deciding whether a profit cap is necessary. This would include looking at system capacity and the diversity of provision available, utilising the work that we are doing on data and cost transparency of placements. The Bill also requires the Secretary of State to consult before making regulations. This will be particularly important to ensure that all interests are considered in determining issues such as how a cap would be calculated and the level at which it would be set. We can commit to consulting specifically with the Committee as part of this process. The care system