Welsh government plan to eliminate independently run children’s homes risks harm to children and young people and £150m+ cost to taxpayer

As the membership body for children’s homes organisations throughout England and Wales, supporting public, private and charity sectors to deliver exemplary care, The Children’s Homes Association (CHA) takes a child-centred approach to policy evaluation and is concerned by any policy change that places the wellbeing of children and young people at risk. We are also concerned by the inaccurate reporting that can be seen around this policy and its progress.

As part of the working groups for ‘Rebalancing Care and Support’ policy development, CHA welcomed the Welsh government’s commitment to Rebalancing Care and Support, including embedding Social Value principles throughout health and social care, and improving partnerships in a mixed economy. We fully support the Welsh government’s aspirations to improve social care arrangements and achieve the aims of the Social Services and Well-being (Wales) Act 2014. However, we can no longer stay silent in regard to the ‘Eliminate’ policy, that is threatening decades of evolution and expertise in children’s residential care and that risks worsening the sufficiency crisis in Wales with significant impact on children and young people. There is no evidence to suggest that the removal of private children’s homes providers will enhance Social Value in the short or long term – the financial cost alone at a time of unprecedented pressure on Welsh councils suggests the opposite. 

It is our evidence-based view that the financial, social and human costs of eliminating private children’s homes providers from Wales have been dangerously underestimated, and that the planned changes will not only worsen the sufficiency crisis in Wales, but directly impact the wellbeing and life chances of children and young people for whom the Welsh government has a duty of care. 

We note that already, children are being negatively affected by a sharp increase in the use of unregulated settings in Wales due to insufficient supply at a time of increasing demand.  There is no reported engagement or expansion of a new 3^rd sector nor is there any significant movement for local authorities to open provision (noting the breadth of expertise that is lacking to progress this).  With no evidence that Wales’ many privately run children’s homes organisations will be able to transition to a ‘not-for-profit’ model as has been proposed (a model that has yet to be defined) those children’s homes will need to be replaced by the Welsh government at a cost to the taxpayer that we estimate will exceed £150m. At a time when Welsh councils already face ‘potentially catastrophic’ financial shortfalls totalling £1.23bn in the medium term (https://www.themj.co.uk/Welsh-councils-face-potentially-catastrophic-shortfalls-/224492), it is hard to understand how the Welsh government will replace the lost provision, how sufficiency of placements will be improved, and how direct harm to children and young people will be avoided. 

It is also important to recognise the significance of losing the experience and skill of so many residential childcare providers in Wales, many of whom are in fact small privately run businesses (not large venture capital backed providers as media coverage has incorrectly suggested) who have worked tirelessly to support local authority sufficiency strategies over many years. Aside from the cost to replace privately run children’s homes with new provision, the compensation that will be necessary to cover the destruction of these providers’ businesses, and the investment needed to replace their experience and workforce to ensure an appropriate quality of care, only add to the insurmountable pressures and barriers to sufficiency that the proposed policy will create unless reconsidered.  In addition, it is constantly demonstrated that on average, independent providers of care cost local authorities between 10% and 20% less, potentially adding over £20 million per year to the cost paid by the taxpayer. 

We welcomed the recommendations of the Competition and Markets Authority (CMA) report which, while raising concerns about the risks associated with some larger private equity owned providers (who do not represent the full spectrum of private providers in Wales) reinforced our position that the state of the market is due to many complex factors and no single solution will bring about the change required to improve sufficiency. As such we also echo the CMA’s reservations about calls to restrict profits and prices in residential childcare, given that the fundamental issue affecting children and young people is a lack of placements, and such drastic measures may only reduce placements and damage sufficiency further. 

We urge the Welsh Government to reassess whether this extremely expensive policy (conceived at a time before the current financial crisis) is now viable without causing significant harm to children, local economies, and local authority budgets. The Children’s Homes Association and our members remain committed to exemplary residential childcare, provided by a mixed economy that delivers social value. We will continue to offer solutions to the Welsh government to achieve this.

Ends

Notes to Editors

For more information please contact:

Peter Sandiford (CEO) – peter.sandiford@the-cha.org.uk (07597 982 533)

Dr Mark Kerr (Deputy CEO) – mark.kerr@the-cha.org.uk (07539 411 591)

ABOUT The Children’s Homes Association (formerly ICHA)

The Children’s Homes Association (formerly The Independent Children’s Homes Association) www.the-cha.org.uk  is the voice of providers of residential child care services and resources across England and Wales. We are a Not-for-Profit Limited Company. The Children’s Homes Association represents both large and small providers with membership drawn from the public, private and voluntary sectors.  Some members have just one home whilst others have many homes across a wide geographic area. 

WHAT WE DO

We provide knowledge, expert guidance, resources and day-to-day support to our members as we work together to deliver exemplary residential child care.We work directly with local and national government, regulators and allied public services, consulting on policy and changes within the sector. We ensure that the voices of our members are heard, through consultations, government responses and liaison with the media.
We actively develop partnerships, collaborations and professional communities to share best practice – for the benefit of our members, the sector and all those cared for within it. Our leadership and associates bring together vast expertise across the many aspects of providing and managing residential child care, with a fearlessly child-centred approach.  

OUR VISION: Exemplary residential child care. 
OUR MISSION: Drive excellence in residential child care through innovation, collaboration and sector leadership.