National Assembly for Wales

Good morning, everyone, and welcome to today's meeting of the Health and Social Care Committee. In the absence of the Chair, Russell George, the first item on today's agenda is the appointment of a temporary Chair for today's meeting and for the remaining two meetings of this term. That's 10 July and 17 July. So, under Standing Order 17.22, I invite nominations for a temporary Chair. Gareth.

Yes, thanks, Sarah. I nominate Sam Rowlands. 

Thanks, Gareth. Are there any other nominations? No, I see that there are none. So, I propose that Sam Rowlands is appointed as temporary Chair for today's meeting and the remaining two meetings of term. Are there any objections to that? No, I see that there are none, and I invite Sam Rowlands to take the Chair. Thank you. 

Thank you very much and good morning, everybody. Thank you for placing some confidence in me to chair this meeting today and up until the summer recess. A warm welcome to everybody to this Health and Social Care Committee. We are, as we can see, holding this meeting in a remote format today, with all Members and witnesses participating virtually. As a reminder, our microphones will be operated centrally. Also a reminder that all of our meetings, of course, are held bilingually and simultaneous translation is available from Welsh to English. And also, just for the record for today as well, if there is an issue with my connection today, the committee has agreed that Joyce Watson would temporarily chair the meeting. So, thank you for that, Joyce, as well. 

Apologies have been received from Russell George, and Gareth Davies, as we can see, is attending as his substitute here today. So, thank you for joining us today, Gareth, as well. Gareth has, of course, has been on this committee for a number of years prior to today. Before we move into the main item on the agenda, I just wanted to double check if there are any declarations of interest that any Members need to raise right now. No, I can't see anybody looking to raise those, so thank you for that. 

Item two on our agenda, then, is a reflection, or work, on the Health and Social Care (Wales) Bill, and that's provision of social care services to children. We have an evidence session with not-for-profit providers. I'm grateful to those joining us here this morning. I can see that we have Sarah Crawley with us, who's director of children's services at Barnardo's Cymru. We have Sarah Thomas, who is chief executive officer at the Fostering Network, and we also have Mike Anthony, service manager at Wales Fostering Service and TACT Cymru. We will be joined by Rhian Carter, hopefully, in a few moments as well. We're just dealing with some technical issues. Rhian is a team manager at Action for Children. And, of course, this is an opportunity for the committee to discuss the Health and Social Care (Wales) Bill proposals with you as not-for-profit providers. We have a number of questions that we will work through. Hopefully, we'll get through these within the hour or so. So, apologies if I do move things on with the questions—an hour isn't a huge amount of time to get through all that we need to discuss.

So, I'll kick off with a question perhaps, and then if you're able to just raise your hand if you want to come in to respond to these points—that'll be a physical hand if you're able to—and I'll bring you in as we go through. So, the first point, really, is around the principles and the need for the Bill that we're looking at here. We know that the Competition and Markets Authority have said that a ban or a profit cap is not necessary to deliver a well-functioning placements market. So, I wonder what evidence there is that this Bill will result in better-quality placements closer to home for looked-after children. Who would like to respond to that initially? Sarah Crawley.

Thank you, Sam. I'm happy to respond. I think there are a number of points there that we need to cover. Children and young people themselves have said that they don't want to be profited from with private companies having children in their care. I think that's a central part of this—we shouldn't be seeing profit from the care of children. That's profit by private companies, not profit of individuals.

I think the second bit there is about how close to home you want to be and how close to your family and your family ties, and I think that's a very, very important part of children being in care. And if you've got private providers generally purchasing properties in cheaper areas, purchasing properties out of the areas in which these children and young people live, then you're inevitably going to get children and young people living outside of their local home area, outside of their local authority area and possibly even outside of Wales. So, I think it's vitally important that we ensure that children and young people get the right care at the right time with the right provider. And Barnardo's has been a not-for-profit provider in the charitable sector for 158 years, and we've been providing better outcomes for children and young people and families for that entire time. And our purpose is changing childhoods and changing lives, and you can do that when you believe in safe, good, happy care in a good home environment for children and young people. And so, I believe that the principles and the ambition of eliminating profit are absolutely the right thing to do, but it is only one small aspect of the care of a child, and we need to take that into account as well, because it's a systemic process—caring for a child—and enabling them, hopefully, to be able to stay at home with their family safely, and that's what we need to be working towards.

Okay. Thanks, Sarah. I'm grateful for that initial response. Rhian, I just want to welcome you. I appreciate that there were some technical issues getting you into this meeting straight away, so thank you for joining with us as well. I've introduced you as a team manager for Action for Children, and just in case you weren't able to pick up the question I asked of other members of the panel a moment ago, the question really was: what evidence is there that the Bill that we're looking at today will result in better quality placements closer to home for looked-after children? You don't have to respond straight away, Rhian, but I just wanted to make sure that you were aware of the question I asked. Would anybody else like to respond to that question at all? Sarah Thomas, yes.

Yes, I think that one of the important things in this question is around the outcomes for children, and whilst the Competition and Markets Authority may not believe that legislation is the key to improving these outcomes, unfortunately there doesn't seem to be any other alternative that has been put forward that would improve and explore the areas that we are hoping will be improved via this Bill, particularly the location of children. And particularly if we look at the history, and I speak particularly around foster care over the past 20 to 30 years, the number of children who no longer live near their community, their school, their friends, their family is rising. That has shown an increase over that period of time.

And the other factor that has increased during that time is the growth of an independent provision in fostering. I believe that there is a correlation between the two, and we have to do more than just legislate, because I think there are many other things that we could be doing around our data scrutiny in Wales in order to ensure that we are exploring how frequently this happens, when it happens, how well local authorities work together on a regional footprint in order to ensure that children are placed in neighbouring authorities via the inter-authority toolkit, rather than going further afield, to ensure best use of the third sector. There need to be many other areas of practice that are strengthened in order for this Bill to realise its intentions for children.

Thank you, Sarah. John, could I bring you in with some points now and some questions from your side?

Diolch yn fawr, Cadeirydd, and welcome to all of our witnesses this morning. Firstly from me, really, in terms of provision and to what extent it meets need, there does seem to have been a real challenge over the past 30 years or so in developing enough in-house and not-for-profit fostering and residential provision to meet need, and I just wonder what your take is on why local authorities and the Children's Commissioning Consortium Cymru, the 4Cs consortium, have faced such difficulties. I mean, we know that there are more complex needs and a rising number of children in care. Are those the main factors? What is your view?

Rhian, do you want to come in? We'll bring Rhian in. Thanks.

I've worked in social care for nearly 20 years, and I think, just looking at the referrals that are coming through for the children, as you said, John, they're the most complex I've ever seen. For fostering, with the cost-of-living crisis, people are having to work as well as foster, so I think there's definitely been a shift over the years for people's situations. We've noticed that, even with the Ukraine war, people were opening their homes up to people coming into the country, so it's all had a knock-on effect. It's definitely decreased our enquiries in terms of people who wanted to come forward to foster, and also, when you are fostering, some people are not having the best experiences of the support around the child, so they are not sharing positive stories of fostering, unfortunately. So, it is multifaceted, unfortunately, in what's happening in society.

Sarah Thomas.

I'd just like to add to that that I think one of the factors facing fostering is the well-being of foster carers, the recognition of foster carers, the status of foster carers. We are facing a crisis in relation to fostering. We know that there are children going into residential provision who should be going into foster care, but we do not have enough foster carers. But we also know that we don't have a great deal of insight and knowledge as to where our foster carers are in Wales and who they are. In the radical reform inquiry, a register was put forward as a recommendation, and I would strongly urge that to ensure that this legislation does actually meet its full requirement that, alongside this, we expedite the opening up of a social care register for foster carers in order for them to ensure that they have that same level of status as social workers and residential care workers. Other parts of the sector have that via the provision of the register for them, and I think we have an urgent need to do that in Wales, and I'm very grateful that it was accepted as a recommendation by a previous committee. What we need to do now is actually expedite it, because it's been over a year since that recommendation was accepted, and we still don't seem to have a great deal of progress in relation to that. Foster carers are doing one of the most challenging roles for our most vulnerable young people. They do it in isolation in their own home. They need a fantastic support system around them and the pressures on the system at the moment are affecting the levels of support, the level of stability.

There are also other recommendations that came forward via previous work, which goes back some 10 years in Wales, around the harmonisation of payments to foster carers and that level of delay in producing something that should be fairly straightforward in relation to making a commitment to how we reward those individuals who step up and say, 'I will care for somebody else's child and bring them up as my own on behalf of the rest of society.' It leaves people feeling very demoralised when we can't take those straightforward steps.

I would also say that part of this is about regionalisation. I think we need to ensure that the regional footprints and the regional footprints that have been created for fostering are working together in the strongest possible way, because, otherwise, the competition between each local authority, the competition between each third sector provider and private provider just is perpetuated, and we don't help the system. We're not doing anything to help foster carers come forward to a thriving system if we do not take action to ensure we are at our best.

Thanks, Sarah. Mike, do you want to come in?

Yes, just to add to what Rhian said, and Sarah. I agree with Rhian that there's been a massive impact on the ability to recruit carers with the cost-of-living crisis and post COVID as well. But also, as Sarah was saying, I think that there's a lot of competition, and I agree with the principles of the Bill to look at expanding the charitable sector, but I don't think we are working in genuine partnership a lot of the time with the local authorities. One of the impacts, I think—. There's been a lot of investment from the Welsh Government in the national fostering local authority body, shall we say, and we should be clearly positioned in the third sector, the charitable sector, as providing and meeting a need that the local authority can't and want us to meet.

But during the transition towards getting ready for the Bill, we've almost been seeing that the independent fostering agencies are lumped together, charitable and profitable, and seen almost like the enemy, and genuinely—it sounds like I'm being overdramatic—the idea of eliminating profit has almost been some local authorities eliminating the independent sector, including charitable. So, we're actually in competition and so we're fishing from the same—. A lot of carers move around, instead of recruiting new carers, and I think it's unsettled a lot of carers, as well. Some people have been told that IFAs won't be around in the next couple of years. So, I don't think we're actually co-ordinated together, and that's not a healthy culture, shall we say. You don't find it at commissioning level or higher. When we meet with management as charitable organisations, it's made very clear to us there's a place for us in the market. We are there, absolutely, to support more complex children. But, on the ground, we are being targeted by local authority social workers. Our carers are being targeted as if we are in opposition. So, the genuine partnership isn't there at a certain level, and that competition, as Sarah says, shouldn't be within local authorities, but it is. We're not really all aligned still, I think.

Thank you, Mike. Sarah, can I bring you in after the next question? Is that okay, Sarah Crawley? I know John's got a further point as well. I'm just conscious of time. John.

Diolch yn fawr, Cadeirydd. Just drawing on some of those issues and whether there's enough of a distinction in the proposed legislation between small and medium-sized enterprises and the larger companies, I know that some of the responses to the Welsh Government's original consultation thought that there wasn't enough of a distinction made. It was said that large multinational organisations extract excessive profits and small owner-run businesses reinvest the majority of profits was a very important distinction to be made. I know that TACT and the Fostering Network think that perhaps an opportunity might be missed in terms of safeguarding the SMEs. So, I'd be interested in your views, really, as to whether there is a case for SMEs to be treated differently in this legislation from those larger companies.

Okay. Would anybody like to cover that point initially?

I'd just say that one of the things I've picked up in some of the meetings that we have with 4Cs and other agencies is that, sometimes, people have been asking for guidance on how they can transition or what was the best way to do that, and people have felt that there hasn't always been enough guidance there. So, people have been very unsettled about that. I think that the SMEs—certainly, our position in TACT would be this—we should encourage them to move over to be charitable organisations, but it's felt like there hasn't been the level of support there. I know one organisation that told us in one of the meetings that it had taken them two years to get ready to become a charity, and that had put off a lot of people along the way. So, I don't know whether that's been a factor, whether there could have been more support for those. Because it's undoubtedly the case that we meet with some very small organisations who don't make much profit at all. Family-based organisations are often doing very good work and wanting to stay on that level, and I think there are a lot of people feeling very uncertain at the moment about whether they've got a future there.

But if I can just say, one of our concerns, just from what we've experienced—TACT has got colleagues in Scotland and the idea that community interest companies—. That is something that concerns us, just in terms of being able to still have shareholders make a profit, but, on the surface, appearing to be not-for-profit and we are concerned that that still means that money is coming out of Wales, if you've got companies turning to that structure.

Okay. Thank you, Mike. Sarah Crawley, I didn't allow you in a moment ago, do you want to respond to this point and perhaps pick up the previous one, as well?

Yes, absolutely. Thank you, Sam. I think there is a question here about quality of provision as well. It's not just about eliminating profit; you need good-quality care, and that good-quality care can come from small providers, or large providers, so I don't think it's necessarily about scale or size. I think it's also about the values and the basis on which you deliver and the basis on which you support those children and young people to have the right environment. So, I do think they need more support to transition over the next two years if they're going to become not-for-profit providers—absolutely. And we need more and clearer guidance and definitions of that. So, yes, I don't think it's about scale; I think it's about the right provision.

The other aspect I wanted to pick up on was Mike and Sarah's point about regional working and partnership working. At the moment, we would be having individual conversations with individual local authorities. Now, that's not an efficient or an effective way to talk about the care of children. We're also having conversations about the provision of residential and foster placements and post-16 support; we're not having conversations about a whole-care pathway, we're not having conversations about how do we prevent children from coming into care, we're not having conversations together with registered social landlords, with local authorities, with the third sector, and we could be having those conversations much more effectively on a regional basis.

And what I'd just like to say is that the 'eliminate profit' funding runs out at the end of 2025, yet we're to transition over the next two years to 2027. So, if we are to facilitate all of this partnership working and to ensure we can get it right for those children and young people who need to be in care, we need to work very, very differently.

Thanks, Sarah. I'll bring Rhian in quickly. Just a couple of brief points, Rhian, and then, Gareth, I think your questions may link well to what Sarah has just pointed to. Rhian.

Yes. I just only wanted to add that I attended a meeting this week with a lot of independent providers, and there was one small business provider who said that, actually, when children were moving out of their Welsh foster homes, they were putting English children into those places. So, I'm just really concerned about more and more potentially  of those independent providers doing that, and Welsh children will be losing out on those homes in their local areas. So, that's just—. I've heard that a couple of times in meetings with the 4Cs over the last 12 months, so I just wanted to make you aware of that.

Lovely. Thanks, Rhian. Gareth, can I bring you in, now, please?

Thank you, Chair. Good morning, everybody. Thanks for joining us this morning. My question was about the regional aspect that Sarah's just mentioned. Is there a case to legislate for regional or all-Wales placement planning and commissioning, rather than continuing with the 22 local authority approach? So, essentially, is there any scope there for any elements of localism within the Bill that can factor in the differing needs in different areas? Because I always use the same model of the needs for, say, a children's placement, say, in Cardiff may be different to that in west Wales or north Wales, mid Wales or rural areas. So, is there any scope to factor in some localism within that approach, or do you believe that an all-Wales approach is best to provide some universality to those aspects? Thanks.

Thanks, Gareth. Anybody like to respond to that? Sarah, we touched on this a moment ago, but would you like to come back in, Sarah? Then I'll bring Sarah Thomas in afterwards, perhaps. Thanks.

Yes, I think that there's a number of levels to that. I think that regional planning would be a good move, and regional conversations. So, we're looking at the needs and requirements of the children and young people in care and potentially coming into care. So, we therefore have got the right placements and right sufficiency, and I think, on a regional basis, that would effective.

I think monitoring numbers nationally is a requirement, and I think that we should be doing that. I think that we should be looking at the right placements and numbers of children in care. I don't think that planning anything locally would be necessarily—. I think that you need to plan for local placements, and I think that you need to plan for local provision, but you can do that on a regional footprint more effectively together. I don't think that planning on an all-Wales basis would benefit the children and young people and their families.

Okay, thank you Sarah. Sarah Thomas, do you want to comment on that as well? Someone will unmute you in a moment. There we are.

Thank you, yes. I would say that we're national membership organisation, and we represent local authorities, the third sector and private providers. One of the things that we see that doesn't work particularly well—and our members tell us—is, due to the lack of regional working and, sometimes, national vision, and heading towards the same direction, which we do have in Wales, to some extent; we do have—. It has been three years now since Foster Wales launched, but it's about the data and the information, that we know about the outcomes. So, how are we monitoring its success? How are we monitoring the difference that it makes? How are we looking at it on a regional footprint? Are there expectations within that for regional improvement and regional planning and regional sufficiency, and working together with third sector providers and others within that region or within that footprint? 

I think that there's far more that we could do around our data collection. Because my concern for children in Wales is that we don't know enough about their experiences, about where they are living, about whether they are going into the wrong provision or the right provision in the right location. We are not monitoring and measuring this well enough to be able to make informed decisions, and that's what I would say needs to happen on a national and regional footprint.

Thank you, Sarah. Mike. 

What we have found—and this is related to statistics as well—is a lack of market position statements from local authorities. Because we've had a lot of information from the 4Cs collected from us about our services. We have been getting told for quite a while now that each local authority will provide us with their market position information, so that we can actually plan to recruit to meet need. But it's such a patchy response we get, and sometimes we've had quite a few local authorities doing it maybe once, and then we don't get anything systematic coming through to us. So, it makes it very difficult then to plan and take managed risks with our development as well.

So, I don't know whether, looking in the Bill, the sufficiency plan is referred to there. That sounds like that's a positive move forward, but the detail of it I'm not quite sure of. But, certainly, more information, as Sarah said—both Sarahs, in fact—I think that that's really welcome, if we can get that.

Okay, thanks. Gareth, do you want to jump back in?

Thanks again, Chair. Yes, just to respond to those points, really. So, I am getting the thing that there's a need for that to be driven nationally through the Bill, but then also to encompass some of those regional realities and perhaps better data streams and communication between different sectors, whether that be local authority or third sector or charity, just to marry up those systems to make sure that there's a regional approach. But it's also collaborative in terms of information, data and those—. You know, there are key elements that can make it more—what would be the word? More fluidity within the system, shall we say? Would that be a fair reflection?

Mike.

Can I just quickly mention what I think was a good approach that we had? There was a really good collaboration that took place between Action for Children, Barnardo's and TACT, liaising with local authorities in north Wales, which did approach us directly to say, 'Look we need more charitable third sector presence in north Wales.' We've got experience of coming together as an alliance in the past, and this was a model that we put a lot of time and effort into. The Welsh Government did actually have some funding proposed for us, ready for us to go. Unfortunately, that got pulled, but we had a really good example there of the charitable sector working together alongside local authorities. I think that's a model we would like to see more of. Obviously, the more of the not-for-profits that could become charitable, then the more we can have a common ethos and work together as a third sector alliance. But we hope that that isn't a lost opportunity, because we've all been targeting growing up there together, and we have seen progress, but there was funding needed there to help us put a really good plan in place.

Thanks, Mike, and thanks, Gareth, for those questions. I think we'll just move on in terms of the theme that we're looking at for a few moments. Joyce Watson, could I bring you in with a few questions, please?

Yes. Good morning, everybody. I'm going to examine any potential barriers to the implementation of the Bill. So, Barnardo's, you did say that social care in Wales is not currently in a state from which to make a significant change and that there's a recruitment and retention crisis already seriously hampering the sector's ability to respond. So, you've made that statement, I would hope that you would add something more to it, but I also invite the other members of the panel to say whether they agree with it or want to add more to it.

Thank you, Joyce. Perhaps, Sarah Crawley, do you want to jump in first and then we'll get reflections from others?

Happy to, yes. I'll cover residential provision first. We are a residential provider across the UK as Barnardo's, and I think we're struggling with similar circumstances to the rest of the sector, be they profit-making or not, and that is good-quality staff coming in to a sector and an area which is very difficult. It's got high and complex needs children and young people, anti-social hours, often relatively low rates of pay, low rates of status, and not particularly great training provision throughout it. And yes, there's a concern, there's a serious concern, that, if we transition too quickly in trying to remove profit from the sector, we will have even further churn within the social care workforce and we will have people leaving that social care workforce, which they're already doing. We are way down on social worker numbers. We're seeing social worker churn within local authorities. We've had children and young people say themselves, 'I've seen far too many social workers, I've had a lack of consistency of support to me throughout my time in care within Wales.' So, I think there is a crisis in the sector and we need to be working together to turn that around. 

In terms of foster care, I think one thing that would be a barrier for us, which we would have to work through, and so would other charitable and not-for-profit providers, is transitioning foster carers into our portfolio. It would be saying, 'How long does it take to do an assessment and to reassess and transition that child or young person or that foster carer into a not-for-profit provider?' I'm sure my colleagues can answer that far more readily. But we would be very, very worried that we would be losing foster carers through that process, and we can't afford to lose any further foster carers. So, I think there are barriers throughout the social care workforce, but also for our foster families as well.

Thanks, Sarah. Sarah Thomas, do you want to jump in? Sorry, Joyce.

We have a significant shortage of foster carers already in Wales. We know we need to recruit another 400 to meet the current demand, and we know that demand is continuing to rise. The lack of register—I would take us back to that. The register for foster carers is intended to support the transition process. I think one of the main barriers I would raise is how ready we are for this change. I think I'd take that back down to how well local authorities work as regional footprints so that they can be talking to each other and working together, how well we're engaging with the third sector already, what relationships exist there, and then those processes and systems, like a register, so that, when a foster carer chooses to transition or a service closes and all their foster carers have to transition, what have we done to ensure they can do that smoothly? Because, right now, the assessment process has to start again under our current regulations. So, again, I just can't push enough how important it is to have a process by which foster carers can remain approved as foster carers, they can keep that registration, in the same way a social worker can, and move from one employer to another. Foster carers need to be able to do that in order to ensure that they remain as foster carers whilst we're in this transitional period.

Thanks, Sarah. And Joyce, before you perhaps jump in with another point, Mark Drakeford, you had your hand up on this as well. Sorry, Joyce, you want to come in first then, do you? Yes, go on, Joyce.

Yes. I was going to ask Sarah—and I take very seriously the points that you're making—. The idea, as I understand it from the Bill, is to give people better terms and conditions at work, and a greater value, by removing that excess profit, and reinvesting that also into the workforce, and also providing better training. So, I want to focus on that part and ask you whether you think, having spoken to people, which you do all of the time—all of you—that they see that as a positive, and would be eager then to transition.

[Inaudible.]

Sorry, Sarah, before you come in, perhaps Mark can ask his question as well, then perhaps we can wrap up some of these points together. Mark.

Okay, Chair. Thank you. First of all, to say that I take very seriously all the points we've heard this morning about the need to plan properly for transition. I think we've heard some very important, practical issues that we need to make sure are known by the Welsh Government and being taken into account. But I was struck, as Joyce Watson was, by that sentence in the Barnardo's evidence that seemed to imply that the choice in front of us is one between the change of the Bill and an otherwise stable future, but, as Sarah's own answer very clearly demonstrated, the status quo is not sustainable, the status quo is not stable. We are losing people. We are leaking money. Every child in a residential private placement has profit of over £900 a week extracted from their care, and isn't the choice we're really facing a continuation of the status quo, which we know is not just simply not working, but getting worse month by month, and the change that the Bill provides, where we move to a different basis, in which the money that is lost today by profit leaking out of Wales and out of the care of looked-after children can instead by reinvested in trying to put right some of the deficits in the current system that the panel has, I think, very vividly, illustrated this morning?

Thanks, Mark. So, a couple of points there. I'm not sure who'd like to respond first. Sarah Crawley had her hand up first.

I'm happy to. I just wanted to pick up a point around a disenfranchised and quite maligned sector, I think, at the moment, in social care. Social workers told Welsh Government in 2023 that 76 per cent of them started working in social care because they wanted to make a difference, and I think that's a really, really important point here, because we're wanting to make a difference to children and young people's lives, and part of that is eliminating profit. But, actually, 38 per cent said they were dissatisfied with their current job. So, there is an inability in the sector at the moment, at times, for people to be able to do their best, and I think moving from a private profit-making provider to a charitable provider has a certain amount of satisfaction—an increased satisfaction—but we still have lower numbers of people in the social care workforce than we need, and turning them into non-profit-making residential homes isn't necessarily going to solve that.

Okay. Thank you, Sarah. Does anybody want to respond to those questions or points made a moment ago? Sarah Thomas.

I'd just like to make clear that we're not a fostering or residential provider, we're a membership organisation and our members include the entire sector in Wales, and, in principle, they are all in support of the aspiration to remove profit from the fostering and residential care of children. I think the future that Mark talks about is some years away, and I think what we're bringing to the table right now is those challenges that we will need to overcome in order to get to the place where that potential difference can be made and felt, and I think it's about getting it right, right now, in order for us to get to that position in the future. As a social worker for the past 20 years, I'm deeply rooted in ensuring that we provide the best possible quality of care and provision for our children, and I do accept that this is a way towards that. But there are many other things, is what we are just trying to flag, that need to happen in order for it to be the actual outcome that we want to see, which is improved outcomes for children.

Thank you, Sarah. [Inaudible.] I've got—[Inaudible.]—first, after Joyce's next point, if that's okay.

Sorry, you broke up there. Yeah, I just wanted to echo what both Sarahs have said. It's not just dealing with fostering and residential, it's multilayered through the entire social care system. So, I think we need to kind of unpick all of that as well, not just focus in on eliminating for-profit providers. Obviously, Action for Children is a charity, and we are in support of that. You shouldn't profit from children who are looked after, but we do need to look at the whole range of social care. And I know we did present evidence at the last panel. I know Sarah and Michael were there as well. And then lots of the recommendations need to be looked at, they need to be followed through. 

Thanks, Rhian. Joyce, can I hand back over to you for a couple more points?

Yes. This will be the last question from me. So, the preparatory work for delivering the Bill, what is your view of that, including what's being delivered by local authorities as a result of the £68 million allocated by Welsh Government to support that transition of the sector? What are your views on that?

Thanks, Joyce. Who'd like to come in? Mike.

Thanks. Can I just say, in terms of the local authorities' responses, that I have to say I've had a couple of personal examples where I've had one local authority contact me, amongst other providers who tried to set up a meeting, where they were really desperately wanting to know what's going on? That's what they were saying: 'What is our position? How is this going to affect us, others?' And I think we were the only providers that actually turned up, but possibly, as a charity, in that sense it's not impacting on us as much immediately. I've met with another local authority where they were quite clearly saying, the commissioners as well, that they were really uncertain about what the situation was going to be once the Bill is implemented, about how they can make placements with profit-making independent fostering agencies. It was affecting their decision making and planning. For example, they were saying they weren't making long-term placements with IFAs in the short term, at the moment, because they don't know whether they're going to be allowed to make those. It was that lack of them having clarity and preparedness, I suppose. It was the desperation. But for us, then, immediately, we know that if they are making placements with us, normally you've got a clearer picture of how long that placement's going to be, and they're saying, admitting, they're not clear at the moment, and it is affecting decision making and planning as well.

Thanks, Mike. Rhian.

Yes, just echoing what Mike has said, we've got excellent relationships with all the local authorities that we work with, and we work really closely with them. We have seen practice that hasn’t quite sat well with us, in terms of we've had one local authority that has written to every foster family that has got an IFA, or is registered with an IFA, and it's just really unsettling for them as families. We don't want that, then, to impact on the children. So, I think it's a little bit clunky. Not all local authorities are working the same. I think there definitely needs to be an overview of the way forward, and they all need to be working on the same page, because they're all doing slightly different things.

Thanks, Rhian. And then Sarah—. Sorry, can I bring Joyce in first? And then over to you, Sarah. Joyce.

I was just going to ask: is that as a consequence directly of the Bill, or was that the case anyway? Just for clarity, so that we know what we're going to report back. But also we've met, obviously, with the Minister taking this through, and it's been—. We've been told quite clearly that any current placements will be stabilised around the child, regardless of whoever's providing them.

Okay, thank you, Joyce. Rhian, do you want to respond initially to that point before I bring Sarah in?

Yes, we've just had information that people were receiving these letters from this one particular local authority, and in there it stated about the elimination of profit. So, I think it was off the basis of this Bill. And obviously, you know, we haven't got any contact with those families; they weren't any of our families. But I can imagine that would have been unsettling for them, not knowing the deadline, the date. It could be quite unsettling for them as a family.

Thanks, Rhian. Sarah, can I bring you in as the last speaker on this point before I move on?

Yes, I just wanted for us to understand the scale of this transformation and change. At the moment, there are 49 residential provisions within local authorities, and there are 245 private profit-making provisions. That's a vast change to move from, for all of us across any sector within Wales, and we need to be able to plan for that transition properly, together. And I think local authorities at the moment, to a degree, are panicking slightly around sufficiency of placements within two years. They're panicking slightly around quality of provision and who's going to provide that provision. They're not set up to provide five, 10, 20 residential homes within their areas within the next two years. Just setting up a residential home, the registration of that residential home, the recruitment to that residential home can take well over a year. So, I think we need to understand that this is a transformation of the whole ethos of the sector that we need to plan for properly. And I think we need to do far more together and communicate far better together to be able to do that. On whether two years is enough, I'm not quite sure.

Thank you, Sarah. Mabon, can I bring in you for 10 minutes or so to lead some questions? I appreciate your connection isn't ideal and if you need to switch your video off, I absolutely understand that, but over to you, Mabon.

Okay. Would anyone like to respond to that? Sarah Thomas. 

I would say that this is one of the most critical unintended consequences that we could potentially see. We know that the numbers of children in the profit-making sector right now are quite significant; this is not a small number of children. And whilst Joyce mentioned earlier in relation to that stability, we're all very much hoping that that will be maintained, but much of this is outside of the control of the care planners in the local authority. So, whilst we don't know what number of agencies are going to transition, how long that will take, what that will mean for them as they transition, what that will mean for their staffing, their resource, we don't know what will happen to those children, and I think that is the thing to be really clear about at this committee.

I'm sure everybody's intentions will be to ensure stability, but there must be some investment in relation to, for example, just the capacity of our independent reviewing officers. We will need enough support within the local authorities to ensure that we can call reviews very quickly, to make transitional planning arrangements for social workers to be able to change care plans. It is not as straightforward as, 'Everybody will transfer and that will all be fine.' I think we really need to do more risk assessing around this. We need to know more about these individual children.

We need to know more about the foster care sector. Where are the empty foster carers? We have telephone calls. We run a national support line for foster carers. We have foster carers telling us that they have no children in their care, and that that has been the case for many months. We have other foster carers telling us that there's been no communication about this, other than various letters from various parts of the sector, telling them various different things.

So, I would urge that we have a clear communication to our fostering families right now, as soon as possible, to tell them what this transition will look like, to give them the reassurance that they need, so they are not thinking that the profit or their behaviour or anything they are doing, their choice, for example, to choose to foster with a service that they may have never had any expectation of or knowledge about how they were set up, and whether there was profit being made from children—. They won't have known those things. It's not an active choice they will have made, and I really would urge that we do some very robust communications, which we as a national organisation have offered to support with, to reassure and relay these concerns before people do leave the sector, because foster carers will be, and are, very concerned, and they will leave, and we need this provision to remain in Wales.

Thank you, Sarah. Would anybody else like to comment in response to the question? Mike, yes.

I was just going to add that, you know, there are strong reasons people think about who they're going to actually foster with. Things have changed. There are so many options now available to people that foster carers take a long time to decide to foster—I think an average two years before they decide to actually come forward. And they've usually made that decision, if they go to an independent agency, based on what they expect to get, which is the level of support. There are plenty of really good examples of local authorities doing well, but they say to us, when they come, 'We want—'. And the specialism of this service as well, only focusing on fostering in a lot of situations, so it's not such a straightforward choice. Like local authorities, some of them are targeting, trying to say to carers, 'Come over to the local authority'. They don't necessarily want to do that, because they're comfortable with that level of service.

But I was also just going to say, in terms of the sufficiency challenge, I think I saw some figures at the end of last year saying there were just under 1,300 children in independent fostering placements. Now, between Barnardo's, Action for Children, TACT and another charitable organisation I know of—there aren't many of us in Wales, as charities—I think there are fewer than 200 children in our placements. So, we're only a sixth of the number of independent placements, so it's a massive challenge to be able to meet that, which is why I say having some sort of support to bring us together, to strengthen our recruitment, could be a really positive move. But it's not so straightforward that everybody's going to move over to become a charity or go to the local authority in that space of time.

Diolch yn fawr iawn, Mike. Mabon, can I bring you back in?

Thanks, Mabon. Sarah Crawley.

I was going to say I don't think we should take the foot off the gas in terms of progressing this over the next two years. But, I think 2027, to have taken and eliminated all profit from care across Wales, ensuring we still have good-quality placements as close to home as possible in their communities for those children and young people, will be very, very difficult. We could suggest a phased transition period beyond 2027 for a further 12 months or more, and that would then enable you to be able to use for-profit providers but only for that period of time. I'm concerned about ministerial sign-off not being particularly practical when, at 5 or 6 o'clock of an evening on a Friday, you've got a young person that needs an urgent placement and you just don't have the provision. And it could have knock-on consequences to further unregulated placements being used. So, I think we need to think about a transition plan much more clearly communicated for the sector, and for those children and young people, but we do need to eliminate profit from care, absolutely. But I think we've just got to judge how quickly we can do this for the effectiveness and the care of those children and young people.

Thank you, Sarah. Anybody else? Sarah Thomas.

I think it's just about bringing it back to the fact that I'm not sure that this committee would have full transparency, or, in fact, if anyone does right now, in relation to children who are already placed in England and children who are from England and placed in Wales. You heard an example earlier about a communication that's been sent to foster carers around that. I think there's actually some uncertainty around this current picture anyway. So, whether it will exacerbate it or not, we would need to have that transparency of our data, and knowledge of our children, in order to be able to continually measure that and address it. The only way we're going to be able to ensure the good transition, the best possible transition, is to have a much clearer picture of where our children are, who they are with, where the foster carers are, where the residential provision is, who they are registered with, and there is a significant part of our country already providing a great deal of service to Wales and vice versa. So, I think it's really about thinking about how the current picture isn't perfect anyway—these things are already there.

Thank you, Sarah. Anybody else? Do you want to come back, Sarah Crawley?

Yes, just a quick one on unintended consequences of private providers moving out of the market quite rapidly. As was mentioned by Sarah earlier, we just don't know what that picture is going to look like; we don't know whether they're going to transition into being not for profit or how many will actually leave Wales and continue to provide provision in England and elsewhere. And there's grave concern about that not only for foster families, but also for residential provision. It does take time to transfer and register, and we need to have an understanding of what that scale might look like and we need to have an understanding of how we can work together across the sectors to be able to manage that transition, absolutely.

Thanks, Sarah. Mabon, do you want to briefly come back in, or are you comfortable there?

Diolch yn fawr iawn, Mabon. Okay. We'll wrap things up in a moment with you as a panel, so thank you for your time so far. But, Gareth, can I just bring you in on just a final question for us, please?

Yes. Thanks, Chair. It's mostly a summarising question, really, given that we're at the end of this panel now, and considering all of the details we've discussed in this panel in the past hour, what would you say was the main thing that you want to bring to our attention in terms of the health committee scrutiny of this Bill? So, it's quite an open question, really, and hopefully we can summarise and take some points away as a committee.

Thanks, Gareth. Sarah Crawley.

I think eliminating profit from care is one piece of a jigsaw puzzle. We have a whole transformation of the children's social care agenda, and we need to move that forward together more broadly, and I would say we need to focus on the pathways of care and ensuring we keep children and young people as safely as we can, with their families, and we need to do that as much as possible. We cannot continue to see escalating numbers of children in care. We do have certain circumstances where that isn't happening and where organisations are working across the sector to meet the needs of children, young people and families at the earliest possible point of early help and prevention, and we need to keep that absolutely in the forefront of our minds. This is a piece of a jigsaw puzzle for care.

Thanks, Sarah. Sarah Thomas.

I would urge the committee to explore greater scrutiny of Foster Wales, the impact of Foster Wales and if it's delivering on its expected outcomes and its linkage with the third sector, because they have to work together very, very closely for this to be a success, and also just return to the need for that register, the call for our social care register to be opened up for foster carers to ease the transitional period and process for everybody involved.

Thanks, Sarah. Mike or Rhian, was there anything you'd like us to focus on or remember most from our time together?

Just to say, on the timescale, I think, talking about the amount in the sector at the moment who can provide third sector foster placements, it doesn't feel like it's ready to be able to transition, and I think, from what you're hearing from local authorities as well, they don't feel ready. I just think that we can't separate the link between fostering as a service or residential and the social work teams themselves, who, in quite a lot of cases, are in real crisis. I know, over the last few years, we've lost several carers in the first couple of years, who come out because they think the actual social work service, not the fostering end of things, is broken. That's the kind of words they've used, because they don't get sufficient support, and you can't separate the support that the carers get from their service but also local authorities.

Thanks, Mike. Rhian.

Yes, I just want to echo what Sarah Crawley said around the whole service of social care. I think, like I said, it's multilayered. Fostering is one layer. You need to look at it—. The support, like Mike said, is not there from social care. We have one child who's had five social workers in 12 months, so continually having to go back and revisit everything. The support just isn't there for the foster carers to make it a role that you want to come into.

Thanks, Rhian. And thanks, everybody, for those final reflections. We appreciate your time. For me, personally, it's reminded me of—I think it was nearly 10 years ago—sitting on a local authority fostering panel, and appreciating the complexities that people, as foster carers and local authorities and independent and other sectors, were having to move around with this, and I think you've highlighted some broader issues as well as what we're scrutinising here today. So, thank you for your time.

You will be receiving a transcript of the meeting, just for your record, and, obviously, you're more than welcome to check that to make sure it's all accurately been recorded. We're really grateful for you time this morning. Thank you again.

For the rest of us, as a committee, we're going to take a break just to allow for our next set of witnesses to arrive, and we'll be meeting again for the next part of our committee meeting in 10 minutes, so at 10:40, please. Thank you, everybody.

Good morning, everybody, and welcome back to this meeting of the Health and Social Care Committee at Senedd Cymru. Our next item on the agenda is item 3, which is the Health and Social Care (Wales) Bill: provision of social care services to children. We've got an evidence session with private and independent providers and representative bodies. We do have a number of people on the panel, so I'll run through the introductions before we move into some questions. 

We have Harvey Gallagher, who's the chief executive of the Nationwide Association of Fostering Providers. We have Colin Tucker, who's the director and responsible individual at 1st Affinity Fostering Service. We have Sharon Cavaliere, who is Calon Cymru's director, Jen Robbins, who's head of policy and strategy with the Children's Homes Association, Darryl Williams, director of Woodlands Ltd, and Dr Deborah Judge, who's clinical director and responsible individual for Birribi. Thank you for joining us this morning.

I'll start off with a question, then I'll move to other members of the committee. I'm conscious, with six of you on the panel, that I may have to direct things to keep things fairly sharp, because we only have an hour together this morning and we have quite a bit to get through. 

So, just an opening question. Clearly, there's some opposition to the Bill that's being proposed here by the Welsh Government. Some people would suggest that there's opposition because of your business interests rather than the welfare of looked-after children. How would you respond to that?

Is that for me?

Fire away, Harvey, and I'll bring others in. 

I suppose the first thing I want to do is dissuade you of the idea that profit in independent fostering services equals poor quality services or poor value for money, because it absolutely doesn't. Independent fostering agencies offer really high-quality fostering services for children with complex needs—more complex needs than the local authorities are able to provide for themselves—and they do it at a good value for money. We see this through the commissioning that happens nationally and locally across Wales. So, profit in this sense isn't to do with poor services for children or poor value for money. It's a principle, but it's not to do with business in that sense.

Thanks, Harvey. Colin, you had your hand up, and then I'll bring Darryl in. 

I'm an ex-director of children's services, and I opened my fostering agency. My issue is how do we protect the good service that we've created. We've got 140 placements. We're on the border, and that in itself may be an issue later on, in terms of unintended consequences and barriers, because the English authorities are really pouring referrals in, wanting our placements. But how do we protect the low caseloads? Eighty per cent of the carers we've got are on trauma attachment training. I've got carers joining us from local authorities who are part of the Foster Wales initiative. Two transferred just this month. The idea that we're moribund and we're not recruiting, with 15 new carers coming through—. So, there are particular issues for me, and I'm going to retire anyway in two years, actually; I'm an open door.

What's really been disappointing for me is no-one has approached me to say, 'Talk to us about becoming an exemplar'. I'm from the public side; I was director of Birmingham, until they sent me home through no fault of my own. I never imagined I'd end up in the private sector. But you've lobbed us all into the same pot—'strange bedfellows', as Professor Norman Tutt would say—and we've all been subject to a very hostile environment. So, my issue is how do we preserve the very high-quality trauma training, the bespoke support for parent and child placements. I've got seven of those. The staff are very stable—no agency staff at all. How many local authorities can say that? Every member of staff has come from a local authority child protection background. We are an excellent service, and Care Inspectorate Wales said that too. Yet you've lobbed me in with all my colleagues, irrespective of how much investment we make, what degree of profit we make, and so on. That's the main point I wanted to make. Thank you.

Thanks, Colin. I appreciate that. Darryl.

My motivation for opening Woodlands 25 years ago was quite simple. I was a team manager in Flintshire social services, managing 16 children's services social workers, and I was tired of putting young people in less than average placements, shall we say, so I decided to do something about it. Luckily, I managed to persuade my bank manager to give me the money and I opened Woodlands. The reason I did it was not for financial gain. It was to improve the outcomes for young people. And the proof is in the pudding, as it were. In the last four years, three of our young people have gone to university. And there's an irony to this, the 'eliminate' agenda. It's sad that such an inflammatory term has been used for this whole agenda. We did ask twice at the programme board that it was a less contentious label, but that didn't happen. If the approach had been slightly more subtle, or with a modicum of dexterity, then you'd have had small providers like myself on board. I would have been batting the corner for this agenda, as would a lot of providers in Wales, because the truth doesn't fit the narrative. The narrative is about giving the fat cats a bloody nose. Well, most of us are one or two-bed, or one or two children's homes, remortgaged husband and wife teams who want to do the best for kids. So, there's a narrative, I think, which is ideological, but it doesn't fit what's on the ground in Wales.

Thanks, Darryl. I'll bring Sharon in and then Deborah, and then I'll move on to Mark Drakeford. 

Thank you, Sam. A similar theme, actually, and just to support my colleagues. I've been a social worker for the last 26 years. I started my career in a local authority in Wales, and I was disillusioned. I wasn't supported in the local authority, and I wasn't seeing great outcomes for children and young people. As Colin said, I never thought I'd go into the private sector. My concern right now is choice for our children and young people in Wales. We're investing huge amounts of money. And it's not my company. I work for this company and I have loyalty to this company because of the outcomes we've achieved, and my concern is choice. The vulnerability, the wraparound services that we're currently providing at huge costs in order to sustain placements and achieve outcomes—that choice is going to be diminished, and there is going to be a lack of investment back into these agencies on the back of this Bill. That's a huge concern for me.

I echo these words, particularly Darryl's sadness at the language and the vitriol that has been stirred up over the last two years, which has created a perfect storm. It's created such disruption already to the sector, and it's so sad, because it's impacting already on children. My background is that I'm a child and adolescent psychiatrist. I've worked for 25 years in the NHS, and I've specialised in working with marginalised young people caught up in the youth justice system, in care, substance misusing, and I became a specialist working with young people with substance misuse problems. That was really rare as a child and adolescent psychiatrist. When I left the NHS in 2014, we began to form the idea of creating a good-quality residential service that would provide for these most vulnerable children and improve their outcomes. And over the last two years, because of the threat and this targeted weapon that has been targeted against the venture capitalists and the hedge funding investors that go behind some of the big private companies, the smaller group of us have gathered together in Wales. And I speak with others to say that our intention to enter this work—. This hard work, with the level of trauma that these children have suffered, is work that we do because we believe in a better society. And, as Darryl said, if this had been positioned and this action had been targeted differently and carried out differently, we would absolutely be supporting the ethical stance, the moral stance of the Welsh Government to say that private profiteering should be taken out of this sector.

Thank you, Deborah. Mark Drakeford, I'll bring you in with a series of questions. 

Thank you, Chair. The Children's Homes Association say in their evidence to us that the Welsh Government hasn't learned the lessons of the Competition and Markets Authority reports as to how to make the market in the care of looked-after children work better. Why do you think that markets are the right way to provide care for children?

Who'd like to respond? I'll bring Jen in and then Colin.

Thank you. In the Competition and Markets Authority report, they didn't recommend banning or capping profit in any way due to the disruption that that would cause for children and young people, and we support that. I think the evidence that various other people have submitted would attest to that as well. In terms of the market and how it functions at the moment, there are a lot of historical issues that have got us to where we are today, in terms of local authorities withdrawing in the late 1980s, early 1990s and the independent sector stepping in to run that provision—specialist residential provision. And there were a lot of historical views about institutionalism and historical sexual abuse within residential provision back in the 1980s and 1990s. So, we were at a point where the independent sector stepped in to deliver this service when local authorities had stepped out. 

The way that it has evolved—and it comes back to the point, I think, about profit versus profiteering, which I think is largely misunderstood—is that we have a small proportion of very large providers, private equity-backed through tax havens, who do operate in the market and have quite a large share of the market across England and Wales. That is an approach that we don't support. We support ethical and transparent business models like the majority of providers that we have. We also think there are alternatives to what the Welsh Government is trying to do to address that problem. For example, as an organisation, CHA changed its membership criteria so that those sorts of organisations could not be members of CHA. So, to be a member of us, you have to be ultimately owned in the UK, have wholly or a majority of shareholders who are registered as UK taxpayers, and receive no loans or investments that originate from a tax haven. We strongly believe that taxes should be paid and be invested back in, because these placements are publicly funded placements. 

The market has evolved to where it is through a series of policy issues with previous Governments, historical issues, which have allowed the independent sector to step in, but also it probably didn't foresee the role of private equity entering into the market. So, it has evolved to where we are, but we do think that there are alternatives that are available that we could explore to solve that profiteering issue. It would still require legislation to do that, but the blanket approach of eliminating profit will not solve, we don't think, the problem that the Welsh Government is trying to solve on the ethical and moral stance. Thank you.

The answer, Mark, I think, is that the market probably isn't the best model for children. I've always been uncomfortable with that. But we are where we are. My issue is that there has been no differentiation with those of us who set it up for quite admirable reasons and have invested properly. And the other issue I've got is the language that has been promoted. It may help politicians to stand on the doorstep and say, 'We've eliminated profit.' Who wouldn't agree with that? That's a real vote winner, if ever there was one. But the language that's used and some of the evidence given, for example, that the children talk about profit—. We do 200-plus consultations every year with the children coming through my service, including birth children, looked-after children. I've never, in 13 years here—nor have I when I was a director of social services in Birmingham for two years, Sandwell for four years, Brighton for seven years as assistant director—I've never heard children talk about profit. So, that language and fuelling the fires of those people in local authorities who resent and are led to believe that we earn massive profits, that hasn't actually been very helpful to children.

And the last thing I'd say on that is that I've gone from having 70 per cent Welsh children—and my son's Welsh and I'm very proud of Wales; he speaks Welsh—I actually have gone from having 70 per cent Welsh children in my placements to 30 per cent, and why do you think that is? That's because we're on the borders, and Cheshire east, Cheshire west, Cumbria even, Southampton, Barnsley—I've got placements from 27 different local authorities. They bite my hand off and I've had to resist. I've maintained being part of 4Cs. I wish you'd used the commissioning leverage you've got; I wish you'd given us more time; I wish you'd consulted with us and invited me in to be an exemplar and have examples for other agencies of how we can assimilate, instead of having a blunt policy with a headline strap of eliminating profit.

Thanks, Colin. I'll bring Harvey in and then I'll come back to Mark for further questions. Harvey.

Thank you. I don't think it is a market, Mark. I don't think it operates as a market and I think there was a strain of that thought in what they're saying they said. And when you use the word 'market', of course it implies lots of other connotations and judgments, doesn't it, about how markets operate. Actually, it's a collaboration between local authorities and the independent providers on the ground and they're doing their very best to make this work in difficult circumstances. And, if nothing else, what the independent sector has done is take risks that local authorities couldn't take. You don't expect public bodies to take risks. They've had to take risks to develop and supply and grow services for young people who couldn't get those services any other way. And the investment they've brought to bring that in, be it by remortgaging a house or the loans or whatever else it might be, is investment that would never have come from the public sector during this time. So, we’ve got something that wouldn’t exist if it hadn’t grown up in the way it exists, and children would be worse off.

Thanks, Harvey. Mark, I'll bring you back in.

Thank you, Chair. So, the Competition and Markets Authority say that the standard profit take per child per week in the residential private market is over £900 a week. Where does that profit go and is it defensible that public money leaks out of the system at that rate?

Thank you, Mark. Deborah, you had your hand up.

Yes, I'd like to respond to that, in that, having listened and watched some of the earlier meetings, what I really can't believe is the misinformation and the way that these figures have been thrown around. They're not indicative of, actually, profits. We looked into this for this precise reason, that this figure of £910 per week per child was being thrown out there as the norm. We’ve worked out that our rate is £165 per week per child. And as a company, we formed in 2014, as a limited company, on the advice, ironically, of Social Business Wales, because the business was formed around properties. We broke even and stopped putting in our own private savings, as a husband and wife couple, in June 2019. And then, we worked through the pandemic, and it happened that our three children’s homes were full, so we had 12 placements—we worked solidly through the pandemic, visiting and seeing children where other services had closed and were absolutely inaccessible. And that year, our profits were 11 per cent. Subsequent to that, our profits have been 3 per cent, then 3 per cent, and then, in this last financial year, probably 8 per cent or 9 per cent, and we employ 90 staff. We have a strong therapeutic service; we employ family therapists. We drive any profit that we make: reinvestment into the company, the well-being of staff, and the significant costs, obviously, the pay and maintaining the welfare of 90 staff; that's a lot of people. And that's in Pembrokeshire, so a significant employer.

So, sorry, I've gone off the—. That's the wider, that's the broader view on profit. I'm a child psychiatrist; I'm a doctor. I never went into this to be talking about the amount of profit that we were going to squeeze out of this market, and the word 'market' is abhorrent—that was said, I think, on 6 June—it is abhorrent: we, the providers, the workers, the professionals in this field, did not create the market, and the majority of our children who come to stay with us and benefit from our services have been referred through relational commissioning. We have worked solidly to build relationships with local authorities, and 100 per cent of the children in our homes in Pembrokeshire are from Wales.

Thanks, Deborah. I'll bring Darryl in next, please.

Yes. Similarly with Deborah, I don't recognise £912 a week; far from it. But there's nothing wrong with the 'p' word. We have to make a profit to invest and, if I didn't make profit, then I wouldn't be able to afford four in-house qualified therapists to 21 boys, which is probably the best ratio in the UK, and I wouldn't be able to afford a school that got five 'excellents' from Estyn in 2019, the only school in Wales to get five 'excellents'. So, I wouldn't be able to afford for four boys in the last three years to go to university from my school. I wouldn't be able to afford to have specialist teachers for every subject. You can't do this without profit. Profit is not a bad word. Profiteering, yes; all of us on this call would want an end to that, but we need profit to invest.

Thanks, Darryl. I'll bring Jen in and then I'll come back to Mark. Jennifer.

Thank you. Just a quick point as well on costs. So, from Welsh Government itself, they've demonstrated that the cost per child per week in the independent sector is £3,811, whereas, in local authority provision, it is £5,265 per child per week on average. That's not including education and therapeutic costs as well, so that's a 38 per cent difference in cost base.

And just to echo what Darryl and Deborah have said, in terms of our members, at CHA at least, there is no provider making levels of profit at the levels quoted, for example, in the CMA report, at over 20 per cent; they are outliers, they are the private equity large providers who have the operational business structures in place to allow that level of profit-making to take place, but also let's not forget the debt structure that sits behind those organisations as well.

So, again, just to make the point that the majority of providers in Wales—if not, it's a small proportion—are not making anywhere near the levels of profit that are quoted in the big headline articles, that people like Darryl and Deborah and others on the call are making modest margins, and, actually, during the pandemic, and when we had the cost-of-living crisis, a lot of our members were operating at a deficit as well. Thank you.

Thanks, Jennifer. Mark, I'll bring you in for a final point then, before I bring other committee Members in. Is that okay?

Yes, Chair. Thank you. So, my final point. To go back to the point that Colin made about the voice and views of children, to remind committee colleagues that the genesis of this policy was a report by the children's commissioner, Professor Sally Holland, where she specifically canvassed the views of children, and children in Wales were very clear that they did not believe that the profit motive was properly applied to the care of looked-after children, and I can assure Colin that I've attended three different summit meetings with looked-after children in Wales, and this point is repeated forcefully at every one of those meetings. So, why should the committee ignore the views of looked-after children in Wales in favour of yours?

Thanks, Mark. I'll bring Colin in, and I'll bring Mabon in in a moment, as well. So, Colin first.

Yes, I can accept that, Mark, just like, in good faith, I hope you accept I'm being honest about my experience as a senior manager of seven different local authorities, actually, overseeing their consultation. The one thing CIW have said about First Affinity is that consultation is excellent. I'd also say to you that, over the last three or four years, I've advocated for loads of children in our service who haven't been listened to, whose views have been overridden by local authorities, selective involvement by the children's rights service. So, it's not a kind of situation where one side of the fence that's been created is fantastic, and the other isn't. I feel I lost my job in Birmingham because I listened to children and I wouldn't sack social workers. So, after two years, they sent me home. I've got a very proud record of being principled about listening to children; it's a thread that runs through all of our service.

My issue is that it's been so poorly implemented, this, actually. I'd sign up to it straight away, but I won't sign up to it being implemented in the way it has, where no one has bothered to talk to me. No-one from your civil service has asked to meet me, discuss models, how we're going to deal with the cost associated with transitioning. Are we expected to meet all of those? It's like we're being nationalised, really, with no compensation, and that is very unusual. So, you had an ally in me and you still do, actually, if it means better outcomes for children, but the way this has been implemented is appalling, and if you want to defend that, defend that.

I accept you heard those children saying that. I've seen the videos of children saying that. Of course they'd say that. My own children—. I have a daughter who is a doctor; she says it's wrong to make money out of children. You've got an open door there. But if you'd bothered to talk to us, and if you'd created a less hostile environment, you'd have had me on side for a start, and that's 140 placements. The average age of foster carers in my agency is under 50. Do your analysis with local authorities. I do it with my old mates in the public sector. They're on a ticking timebomb. The average age of foster carers in some authorities in Wales is late 50s, early 60s. What is that going to do for the implementation of this policy?

Okay. Thanks, Colin. Mabon wanted to come in, and then we'll move on in a moment, unless somebody else has indicated. Mabon.

Thanks, Mabon. Does someone want to come back briefly on that? I know, Harvey, you had your hand up a moment ago. Do you want to come in first on that or not?

Yes, I can do both, actually, because I was going to come back on Mark's question, as well. So, Mark, I think what's been asked is a really blunt, motherhood and apple pie question. If you said to a young person, 'Okay, would you like to have your foster carer from this not-for-profit organisation, which isn't actually quite as good, so the care won't be quite as good as the foster—' I'm not saying that's the case at all, but it's present them a scenario, present them with a scenario and context, '—or you're going to go to this organisation where the foster carer really gets on with you, you're invested in, you have the support when things go haywire, they get the support, because they can reinvest in it, but it makes a profit? What are you going to choose?' Now, I'm not predicting what the answer would be, but it's just too blunt a question. It's a motherhood and apple pie question.

What young people get out of their care directly is the single most important thing to them. I've seen where this has come from, and I've talked to the children's commissioner several times behind the scenes, and I remain unconvinced by the way that was conducted or the kind of blunt questions that came out.

I guess the other thing is about transition. There are transitional costs. So, there are going to be costs in—. So, let's say, for the sake of argument, the fostering agencies all transfer to some kind of non-for-profit status, and I think there's a whole other set of issues about the four models that are there that really need seriously looking at, but I won't come to that one. So, there are costs associated with that: there are solicitor costs, there are accountancy costs and there are transition costs. Where do independent fostering agencies recoup their costs from? From the fees they charge to local authorities. So, any transition of these organisations is going to cost local authorities in terms of fees, because that's where the money has to be recouped from.

Secondly, when you make a significant change to an organisational structure in foster care, what you're seeing is that you lose some foster carers, and we've seen that just recently. A foster care charity decided to stop operating in Wales, partly because of the hostile environment being created. They tried to transfer their foster carers to Barnado's and lost foster carers in the process. And that's for a number of reasons. Foster carers like what they know; it's a tough job being a foster carer, it's a really tough role, you need that relationship and that certainty and lack of anxiety about what's going on around you with your support. And also, if you're 50 plus, you might say, 'Do you know what? Once this young person leaves me, I won't carry on', so you take it as an opportunity to go and do something else with your life as well. So, there are costs to local authorities in the direct transition, and we'll also lose some capacity in the transition, as well.

Thanks, Harvey. Does anybody else want to briefly respond to those points before I move on? I'll go to Jennifer first and then Deborah.

Thank you. Deborah and Darryl will be better placed to talk on this, but I just wanted to quickly make the point that the word 'transition' is also a bit of a red herring. Providers can't actually transition; they would have to close down their current business and open up another business as a separate legal entity. I think the costs that Harvey's mentioned that are linked to that have probably been somewhat underestimated. The legal process of doing that with accountants, with lawyers, with solicitors is actually quite vast. And also, there's the day-to-day resource that that would take away from an organisation to do that organisational change, from the day-to-day work of caring for children; it will take time away from that, as well, for providers. So, just to flag that point that 'transition' is a bit of an opaque word. It implies that it's easier than it actually is, I think, for providers to do that. So, I just wanted to make that point. Thank you.

I'd agree with that. It's a red herring. Again, we come back to the foundations of this. People who set up small businesses independently, working hard within a business structure that was indicated as the best way to do the job, carry on doing that work. And however you phrase it, whatever word you use, this idea of transition, which suggests a move from one business structure to another that's straightforward or follows a process, is just wrong. For the last two years, as soon as the word 'eliminate' and the extremist language started to come into the sector, the sector started to become disrupted. There has never been, in all the two years, clarity about what form of not-for-profit business structure would be acceptable. And then absolutely nothing on the process to move from one business structure to another. As I've said before, that's the least interesting, least important part of the work that we do, because the work that we do is hands-on at the coalface, with highly troubled children. 

At the beginning of this process, it was said that there needed to be whole-system change. Absolutely, I would support that, but that's not what has happened. It's been targeted, focused on profit, focused on business structures, focused on the money, the actual numbers, and it's moved away, right from the outset, from considering the needs of children at the heart of this. And what system change? Never a word about prevention, never a word about early intervention, never a connection with Flying Start, the Well-being of Future Generations (Wales) Act 2015—never joining the whole together and looking at every part of this really complex system to say that we have to look at all of this to form solutions. Instead, a solution was grabbed right at the beginning and became the target. As someone who believes in a just society, and as a doctor who has worked in this world for a long time, it's so saddening. It's so saddening that what we get down to is talking about money and talking about the profit and the business model. I don't care what business model I work with. I don't know, given the turmoil that's been created in the sector, whether I have the resilience and the energy left to go through another 10 years of this and shift to a different model. 

Thank you, Deborah. Those points are well made. I know that others want to come in. We are really pressed for time. I'm very sorry, but there's a lot to get through. Gareth, could I give you five minutes to pick up some points that you wanted to pick up right now, and then I'll bring others in? And Sharon, you had your hand up a moment ago, so perhaps I will bring you in first on Gareth's question.

Thank you, Chair. Good morning, everyone. Thanks for joining us. I can certainly sense the passion around this topic from the evidence that we have heard already. In some of your written evidence, you are critical of the preparatory work for this Bill, including the consultation process and the work of the Welsh Government’s programme board and stakeholder engagement, which, from holding the social services portfolio for three years, up until recently, I believe is a fairly newly set up board. In the knowledge that the strategy for elimination goes back as far as 2021, what kind of consultation, if any, was conducted in those ensuing three years, from the creation of the sixth Senedd up until the final preparation work for this Bill?

I was hearing about the difference between the profit making and the profiteering, which I fully agree are two completely different things. So, do you think that there's any work that can be done by the Welsh Government in the creation of this Bill in terms of separating those two aspects? And if so, what do you think that could look like? Would that be a definition, or would it be something else—maybe an assessment process or something of that nature? I'm happy to throw it out to anybody who would like to answer that, but I'd be interested to know your thoughts. 

Thank you. I saw Sharon's hand up earlier. Do you want to come in, Sharon, first? Then I have got Colin and then Jennifer, and we'll go from there.

It was just referring to the previous point and people's appetite to remain in the sector. I think that that's an interesting one, because I have got 65 staff, 170 carers, and over 215 children placed in our care. My concern—and it goes back to my previous point—is choice. You talk about investment. We need investment, and this has been referred to already. If we don't have investment, we don't have specialist parent and child placements, we don't have therapeutic packages of care. The majority of our children are long-term placements.

Here's my concern, going forward: yes, an appetite to continue, but will we have the investment in order to continue to provide that standard of care? The local authorities are not in a position to provide that calibre of care right now, and haven't been for a long time. And you talk about investment. I see, as the director and the RI for the company, that we are throwing money into sustaining foster placements, not because it is about greed. It is about a child's life. So, if that foster carer needs excessive respite, if there needs to be a support worker and dedicated resource, it's thrown [Correction: 'it's thrown at the foster placement'].

I don't think that that's ever recognised or seen, or the amount of money that goes back into these organisations. I wouldn't be here if that wasn't the case. It's not about bottoms on beds. It's about providing the highest quality of care for children and young people in Wales. I'm struggling with the whole lack of awareness that that goes on, and the fact that that investment goes back into these organisations. There's obviously been research in England that's taken place. If you compare outcomes for children in Wales in the independent sector in comparison to the local authority, there are big gaps.

Thank you, Sharon. I think I said Colin next, and then Jennifer.

The point that I'd like to make is to build on what Harvey said. More flexible alternative models would be a start, actually. Employee-owned trusts was something that—. We spent a whole day with Karen and the 4Cs staff discussing employee-owned trusts, only then to find that they're not included. That would have been a way for me personally—. Because I'm going to be retiring in 2027 whatever happens, actually, and the choice I'm faced with—I can choose, it's my company—is either a legacy company, or I hand over to the staff. The attraction of an employee-owned trust would be the share element of it, the profit element of it is very restricted.

I couldn't understand, having developed a culture where staff are absolutely bloody fantastic—and it is the quality of the staff often that foster carers will say makes a difference—why I would still be getting—. I've got the person who was the face of Foster Wales in Anglesey who's now one of my carers. That happened just a month ago. Why would we still be getting carers jumping ship from a local authority when they know this Bill is in the offing? Social workers have visited my carers and said, 'You do know Colin's going out of business in 2027, don't you?' That's the nature of the hostile environment.

The last thing I'd say that would help is some kind of financial help to transition. We talked earlier about the fact that you cannot just seamlessly transition into a not-for-profit. I wonder, in my discussions with civil servants that I've had recently, whether they understand what that means. For every carer—I've got 80-odd carers now, 85 carers—they would all require a fresh form F, the inspectorate would insist on that. I'd have to set panels up. It costs an enormous amount of money and time to scrutinise those applications. There are no short cuts to this. I'd have to persuade all the carers to go through that. Many of them will choose not to because they've had enough of all of that. These costs are really significant, and yet we're being offered no help.

So, the choice I've got at the moment, I'm afraid, is to become a legacy company, to have supplementary placements. Those still go on. I get calls at 5 o'clock personally on my phone from Welsh authorities, I get them from the south of Wales placing babies in the north of Wales. Is someone monitoring the unintended consequences of this policy? There is a plethora of unregulated kids' homes opening on the borders.

We'll probably come on to some of those further points around those consequences, Colin, but thank you for raising them there. Jen, can I bring you in briefly? Then I'll move on to Joyce Watson for some questions.

Thank you. I'll be really brief. I think there are a couple of points to make on the consultation and engagement. It's really important that people want to engage and are happy to engage and want to be in these forums. With the programme board, the issue is that, for two years, they've had no information or clarity to be able to give any feedback or make any decisions based on it. There's been nothing new in two years. It was the same conversation in every meeting, just going round and round and round. So, people want to engage, but when there's no information, how can you have a really productive discussion?

I was a civil servant for 10 years previously in the Department for Education, leading children's homes policy, and this is not evidence-based policy making in any form. I've never seen anything like this. It is purely ideological. The amount of unintended consequences that were flagged in the consultation, and the Welsh Government's response was essentially one line saying, 'Well, we're going to do it anyway.' So, people really don't feel listened to.

On the alternatives and what we can do about profiteering, as I mentioned before, we've changed our membership criteria to exclude some of those private equity tax haven organisations. There are things that are quite radical you could do, such as make it in legislation that to operate in Wales you have to be domiciled in the UK, as one example. Another example, looking at what DfE in England are doing, is the financial monitoring of organisations. However, to flag, that was a recommendation by the CMA and that was more about avoiding market exit than monitoring financial performance of organisations as such. But there is work going on elsewhere in a similar vein, and it would be worth joining up, I think, with those organisations. But that was it from me on that. Thank you.

Thank you, Jen, and thank you for the responses to those questions. Joyce Watson, can I bring you in to move on slightly to other areas?

Good morning. I'm going to ask about potential barriers. I think that's what we've been hearing, really, so far. But, on the specific barriers, I'd be interested to know how many will transition to not-for-profit status. In the evidence from children's home providers, you suggest that providers won't transition, and we've heard a lot about that already. So, that being the case, what is the latest understanding of the percentages of fostering and residential providers who are thinking of transitioning, and is it possible to know those numbers?

Thanks, Joyce. Who'd like to respond first? Jen, you had your hand up first.

I'll go quickly, because I know I've spoken quite a bit. In CHA, we represent about half of the beds in Wales. So, we don't have everybody as a member, but we've got about half the beds. We've got about 22 members and just over 400 beds in Wales. None of our members are willing to transition at the moment. I can't give you exact figures of all the residential, but in our membership, there is nobody willing to transition. To caveat, that is not to say they would not consider it if the models that were proposed—if there were alternatives, such as, for example, employee-owned trusts, which Colin mentioned, and, for example, if CIC's got maybe a degree of share capital as an alternative. So, if the models were workable, that would likely change, but, at the moment, from our membership in residential, there is nobody at the moment willing to transition, with the lack of information that is out there.

[Inaudible.]—Deborah, and then I'll bring Darryl in.

There has been a lack of information, and this has been going on for two years. I've attended so many meetings. I've really tried to hear what the options were. We've been through cycles of options being there—the employee ownership trust, which we were interested in, and then that goes. In those meetings, in that consultation, and in these discussions, which have been driven towards, 'You're going to have to transition into a not-for-profit business form, but we can't tell you what that is going to look like, and we can't tell you anything about the process, but you're going to have to do it', that's the way the dialogue, the conversation, has gone. So, in this process, not only do I not feel that I've had a voice, but because there's been so much anger, vitriol and extremist language used, and that has come into those meetings where I have felt personally bullied, highly stressed, not listened to, that also is the human experience of this over two years. That when we're then asked, 'So, are you going to change the whole business structure of your company and transition into a not-for-profit?'—. I've been running a not-for-profit company, a social enterprise, for the last 10 years, I know how it works—that's not a problem. What we are experiencing is the human cost of it, and I'm at an age and stage where, at some point, we have to say, 'Enough is enough.' And even in this meeting, it's impossible to talk freely or feel that you can have a freedom of voice and express what you really think, because of the level of anger, aggression and fear of retaliation, fear of what next.

Okay. Thanks for that, Deborah. I appreciate what you feel is what you feel, but, as Chair of this committee, I would want you to speak as freely as possible in terms of providing the evidence that we need. But I appreciate your view that that's a struggle right now. Darryl, you can come in, and then I'll bring Harvey in in a moment, after Joyce, if you don't mind. So, Darryl, back to Joyce, and then you, Harvey.

Thank you. Just for information, I'm also a member of the programme board, and have been since its inception, and I'm there as an owner of an avaricious private limited company, and I do, on occasion, sit there and get an idea of what a turkey feels like in mid November in terms of voting rights. And I sit there thinking, 'Is this really happening? Are people really saying these things?' I don't think they understand what's going on, that it's scary. But just to answer the question about profit, on the programme board, we've attempted to define profit for the last two years, and we've given up now. So, the programme board can't even define it. 

Okay. Thank you, Darryl. Joyce, I'll bring you back in. I'm conscious of time. Perhaps if we get five more minutes from your side, Joyce, and then we'll go on. Over to you.

I'm particularly going to go back to residential care and the comments that you've made that there's no significant level of preparatory activity taking place to achieve the total number of residential care places that would be needed if you have this transition by 1 April 2027, but also that you're not in discussion with local authorities for the transfer of your homes to them. Why aren't those discussions taking place? Because, clearly, they would be critical.

Okay, Harvey, do you want to come in first and perhaps try and respond to some of that, and then I'll bring others in?

Yes, obviously I can't answer that question, but I was going to go back to—I'll just try and keep it brief—Gareth’s question earlier on about consultation. So, I also was a member of the programme board right from the start, and co-chaired two of the first lots of working groups, sub-committees, across that, and there was lots of consultation, and officials, I think, handled it actually really well, even with a very, very difficult brief. But what we got back was almost nothing in response to the things that we raised. So, the conversation you've heard now, this morning, I must have heard that said 30 times over the past two and a half years, and we never really got anything concrete back about what might be done to respond to that. It was almost as if it was going to happen—this was going to happen regardless of the consequences. That would be my personal feeling about it.

And then I suppose Joyce's question about fostering agencies—we just haven't had enough detail, Joyce, to know what it is you're supposed to transition to, and now we've got it, it's a very unsatisfactory set of options. So, the fostering agencies, our members represent 96 per cent of children living in independent fostering agencies with their foster carers, and they want to stay, they want to keep their commitment to children, but nobody's doing anything to make that possible for them.

Thanks, Harvey. Anybody else like to come in on the points that Joyce raised there? Jennifer.

Yes, we briefly mentioned this in our written evidence in terms of the lack of activity to manage some of this change. So, there's very little new provision that has come online in the last two years since this has been announced. I think in 2022-23 there were 45 new places that came online, five registered by local authorities, and nine children's homes closed in that period. There are still, I think, off the top of my head, six or seven local authorities with none of their own residential provision at all. I think one of the things to flag is, actually, this policy is as difficult for local authorities as it is for independent providers. This is a massive change for them, and there are burdens that some of the requirements in the Bill placed on them, with annual sufficiency plans, for example. But I've been on calls with some local authorities who are absolutely terrified of this, and have no idea how to start going about opening their own children's homes.

I was on one call with a small Welsh local authority and a social worker was tasked with opening a children's home. How can that social worker navigate planning permission, recruitment, workforce? And the biggest question: why aren't they looking to purchase properties from providers? How is that going to be funded? We think, if in the worst-case scenario 885 beds go from providers not transitioning, we're looking at nearly £550 million in costs to replace that service. That's obviously the worst case. We've done some very initial high-level financial modelling about what costs would look like and how long these homes would take to come online. For example, Powys opened one of its first children's homes in a while. It took them four years because they couldn't navigate planning permission and they couldn't recruit to the registered manager role.

So, I think it's just as hard for local authorities. I think it's as much a minefield for them as it is for independent providers. It's a very long process that has a lot of barriers to navigate opening. It takes a long time to open children's homes. There is a wastage process; not every children's home that's planned will come online. So, I think that's the point to make. It's just as difficult for local authorities. A lot of local authorities have not been in this space for years. So, it's brand-new to a lot of them.

Okay, thanks, Jennifer. Sharon, a final point on this and then I'll move on to John Griffiths for some questions. Sharon.

I'll keep it brief, but it's on that thread, actually. Obviously we're talking about whether independent agencies and whether residential are going to be around, and is the capacity going to be there in the future. I work very closely with all the Welsh authorities and have done for the last 24 years. I see the crisis points and I've seen them come and go. My concern is, if people are committing to this moving forward, where is the local authority? Where is the Government's support to the placing authority, the local authorities? One of the biggest Welsh authorities this year didn't get into double digits in recruiting foster carers. A lot of the agencies around here—we have. And I'm thinking, if this is uncertainty at this point, and if you’re going to lose capacity by the time you get to 2027 for specialist foster placements and residential, where is—? You know, where are the plans for the local authorities to have that capacity available? 

Okay, thank you, Sharon. John Griffiths, if I could bring you in. And if we run over by a few minutes, I do apologise. I hope everybody is able to hang on for just a few more minutes from our allocated time. But, John, over to you, please. 

Diolch, Cadeirydd, and morning, everyone. We've touched on a lot of the possible unintended consequences already in the evidence that you've provided this morning, but I just wonder if you might be able to provide a little bit more detail from any work you've done or views that you have. So, a disorderly exit of private providers as a consequence of this Bill—any views on what that might look like in terms of timescales and how many children might lose their placements as a result? 

Okay, thank you very much, John. Colin and Janet first. 

One of the unintended consequences I'm experiencing is English authorities—we're on the border, so I do accept we're a bit different, but I've got 50 foster carers in Wales—some of the English authorities on the border want to do block placement agreements to take the placements. That gives stability, better working, and I've resisted that, because what it actually then means is that those placements are blocked from Welsh children. That is a massive potential issue over the next two years that may not have been foreseen. The other one is the carers. About 20 of my foster carers came from local authorities. They were completely disillusioned with agency social workers. One child had six different social workers in a year recently from one of the Welsh authorities. That's the worst in my career and I was a social worker from the age of 21. 

The big elephant in the room we've not discussed is about the numbers of children coming into care. The poverty that we're experiencing at the moment is the worst I've seen in my career. I raised that issue on Question Time from Chester two weeks ago, and nobody responded. No-one is talking about the crisis in children's services. So, looking ahead, whoever wins the election, there isn't a resolution in sight to this but, for me, it's about—. Unintended consequences will be denying Welsh children Welsh placements, because they'll be taken by English authorities, and that's happening now. And that means for local authorities—. You talk to my local one in Wrexham. They place babies in south Wales. I've never seen anything like that before. When I ran a fostering team, we could always place babies.

Children going into children's homes now, I was speaking to a director yesterday, they're younger than they've ever been, and as a director at Birmingham, I banned children under 10 going into children's homes. I don't actually think children under 10 should go into residential care, despite the fact that Barbara Kahan, who was a very old social care commentator, used to argue that they should, I didn't think they did. I've closed more children's homes than you can imagine in my career in different authorities, and when we've opened them—and this is the last thing I'd like to say—they always take children who aren't already in children's homes.

So, the academic exercise that's done, that you're actually going to replace private provision with local authority provision, is naive, because in all the children's social work teams I've managed, there's a whole list of kids that social workers think should go to children's homes. There's a whole group of parents who prefer their kids to go to children's homes, and all of those subtle observations have not made any impact whatsoever on this policy. Thank you very much.

Thank you, Colin. I'll bring Harvey in. 

Thank you. I join the ask to try and quantify it; it's really difficult to quantify it. But I just know from experience in Wales and in England, when an independent fostering agency changes governance structure, its ownership in some way, you lose foster carers. That might be 5 per cent or 10 per cent of foster carers, it might be 30 per cent or 35 per cent of foster carers—it's in that sort of order. But it's a significant number; it's not a handful. And that's because, as I said before, foster carers needing certainty about what's around them and who they are, what's going on, who the children are, and who they know. And given that we are where we are because of the pressures on the foster carer system, the foster care system can't cope with all we're throwing at it. As Colin said, actually, the issue is about poverty and the family issues that come as a result of that—domestic violence, substance misuse et cetera. We still don't have enough foster carers to cope with that; maybe we'll never have enough foster carers to cope with that. But if Cardiff were to lose 10 of its independent fostering agency foster carer numbers, that would be a disaster for Cardiff. 

Okay, thank you, Harvey. John, do you want to carry on? 

I don't know if Jennifer wanted to come in at this stage, Chair, or would you rather me continue and bring Jennifer in to respond to my further question, perhaps, and make whatever point she wanted to make, at that stage?

Sorry I missed you, Jennifer. Let's go to John first and then we'll come back to you, Jennifer. Sorry.

Okay. In terms of the transition period following April 2027, the Children's Homes Association refer to provisions in the Bill allowing existing private providers to remain registered, subject to conditions through the regulations, and say that, without detailing what the conditions are, providers cannot make sound business decisions or understand how these conditions would impact their businesses. So, is there anything that you would point to in terms of assurances that would help address that situation? And would you suggest anything in terms of amendments to the Bill?

Thank you, John. Jen, do you want to come back first, then we'll go from there?

Yes. I'll go as quickly as I can. Quickly, to pick up on the unintended consequences—I have covered this in the written evidence, but just to flag, as it hasn't actually come up—there's an increasing number of homes that are operating without registration, so illegal placements, in Wales. Between April 2022 and March 2023, there were 92 children's homes operating without registration. I've just submitted an FOI to get numbers for the last two years, in the period when this policy was really being discussed, and the deadline for that is tomorrow, so, unfortunately, I can't give you the data on that today. But we're expecting that to have increased since the last time that data was collected. So, you've got children in illegal placements and placements that will not be meeting their needs at this moment in time.

Then, obviously, the other unintended consequence is the impact on sufficiency. Where are these children going to go, ultimately? More of them will end up in illegal and unregistered, unregulated placements. In terms of provider point of view, we've got providers who aren't growing or expanding who could be, because they don't know what the outcome of this is. And we've got providers taking children from England. As much as they do not want to be doing that, they promise more longevity in terms of contracts. So, there's the instability of placements there.

In terms of John's second question around more information, the Welsh Government have said, as an example, that there will always be a need for for-profit provision for those with the most complex need. I would argue that, for example, Darryl and Deborah provide provision for those with the most complex needs, but what is 'complex need', how are we defining that? Would a provider know whether they fall into that category or not?

In terms of amendments, I think looking at the models is absolutely critical. The four models that have been put forward are not workable for the majority of our providers. But also the language is very vague: saying you can continue operating in certain circumstances—well, what are those circumstances? It's just too vague. And even to propose alternatives is difficult, when you haven't got a baseline to work from. So, even having a baseline to then challenge or say, 'Yes, that works' or, 'No, that doesn't work'—we don't even have that. So, I think there's just a general comment about vagueness.

Thank you, Jennifer. Harvey.

Jen has said it, really: a longer timescale as an amendment, and the range of models isn't sufficient. We need other models. We probably also need somebody to propose a model. Why can't they be creative and innovative enough to say, 'This is the model that works for us and our children'?

Thank you, Harvey. Are there any other points from anybody in terms of amendments? Darryl.

A brief point: I don't wish to sound dramatic, but if we don't change course, we're going to sleepwalk into the biggest disaster for vulnerable children in Wales since the second world war.

Thank you, Darryl. Deborah, briefly, then Colin.

Thank you, Darryl—brave. That's what I would also echo—that we keep sanitising this. We keep talking about language of concerns about sufficiency, concerns about rising demand. We distance ourselves from saying, 'These are children in unsafe environments, in a time of great economic turmoil and hardship, growing up in poverty, who need protection.' And if those safe places, safe homes with love and care, are not there for children, they are going to continue to be harmed, continue to be unsafe, with all the consequences of remaining in those environments. That's the cost; that's the collateral damage: it's children in Wales. Is that acceptable?

Thank you, Deborah. Colin, a final word on this before I move on to Mabon for a final question.

My three points would be: differentiation between fostering and children's homes, and picking up on some of the points made about equity companies, financial institutions that are behind some of them; secondly, give us more time and have more discussion with us; and thirdly, hope for a Labour Government that gets elected and gets this introduced, Mark, UK-wide. I think if it was UK-wide you'd stand a far better chance—all of us would stand a far better chance—of implementing this policy. Because I don't know anyone, actually, in principle, who thinks this is a bad idea; I think it's just not been implemented at all well.

Thanks, Colin. I'm not sure I could advocate for that final point as a good old Conservative, but I appreciate the point you're trying to make. Mabon, can you ask your final question? And then, perhaps, in response, Harvey as a representative for the nationwide association, and then Jennifer, if you could respond as well as a representative of the Children's Homes Association, rather than all six. 

I'll give you a moment to think about that and whether Harvey—. I know, Colin, that you want to, but I'm just trying to get a representative from—. I'm conscious of time. Harvey, would you mind?

I'll have a go. Again, it's the principle, isn't it? We need to think about the principle in practice, and that hasn't been addressed at all. The principle as things stand, as things are shaping up, where funding is, where poverty is, where sufficiency is, is going to make things worse for children and it's going to make things more expensive for the local authorities, yet, of course, they will be left holding responsibility for all of this, so we've got to think about how the principle applies in the real world.

Thank you, Harvey. Jen, is there anything from your side that you want to add for us to remember?

Thank you. I would probably echo what Harvey has said. I don't think this Bill is transforming children's social care, which is what its intention is. What, really, will it do? We know it won't improve quality, because quality is good and that's evidenced by 4Cs. We know it won't lower costs; that's evidenced by the Welsh Government itself. It will not eliminate profit, but it will eliminate providers, and it will ultimately cause more harm to children. So, really, what are we trying to achieve by doing this?

Thank you. We've run over. I'm really grateful for everyone's responses and engagement with the committee here today. If there are any points that, perhaps, we weren't able to get to, we may write with questions for possible responses from you, if you don't mind. Also, the consultation from us as a committee is still open until Friday. I know you've responded to that already, but if there was anything further you wanted to share, we'll be grateful to receive that before Friday's deadline. But thank you again for your time this morning—really appreciated. You will receive a transcript of the meeting as well, so you're welcome to check that and make sure it's a correct record of our discussions this morning. Thank you again for your time. It's really appreciated.

Members, we're going to move ahead with the rest of our agenda now. Thank you for your patience. It's just gone on slightly longer than we had initially planned, but I think it was the right thing to do.

Item 4 on our agenda is a motion under Standing Orders 17.42(vi) and (ix) to resolve to exclude the public from items 5 and 9 of today's meeting, and also item 1 of our meeting on 10 July as well. Is everybody comfortable with that? There are no objections. Thank you very much.

Welcome back, everyone, to our meeting of the Health and Social Care Committee at Senedd Cymru. We're onto a further evidence session in relation to the Health and Social Care (Wales) Bill. This afternoon we have an hour or so in relation to the provision of social care services to children, and it's an evidence session with the Association of Directors of Social Services Cymru.

With us this afternoon we have Sally Jenkins, who's the strategic director of social services at Newport City Council, and also chair of the 4Cs board. We've got Craig Macleod with us, who's head of children's services at Flintshire County Council and vice-chair of the all-Wales heads of children's services group. And we've also got Darren Mutter with us, who's head of children's services at Pembrokeshire County Council. So, welcome to all three of you. I'm grateful for your time this afternoon. We should be together for around about an hour. I'll kick off with a couple of questions, and I'll hand over to colleagues for some further questions as well. But again, I'm grateful for your time here.

The first question from me is more of a general question, I suppose. We know that the Competition and Markets Authority has said that a ban or profit cap is not necessary to deliver a well-functioning placements market. So, I wonder what your views are on whether this Bill is the right approach to addressing the most pressing issues to do with placements for looked-after children. So, is this Bill the right approach to addressing the most pressing issues? Perhaps I could look for a response with a hand raise, and I'll go from there.

I'll go first, and then I'm sure that Craig and Darren will wish to contribute as well. I think the view from the Association of Directors of Social Services and the all-Wales heads of children's services group is we absolutely welcome this Bill, and we welcome the focus on elimination of profit from children's social care. Actually, if you look back some 10, 11, 12, even longer years, many of us have been talking about this area of work over a considerable period of time, and some of our concerns in this area.

I think where we would agree with the CMA is that this alone will not lead to sufficiency and quality in placements, but we do actually welcome the intent of the Bill in terms of the removal of profit as a direction of travel. I think I'll say it now: I think all of us absolutely support the principle and we strongly feel that, in terms of effective, quality care of our children, that should rest with local authority and not-for-profit providers. Our challenge is in relation to transitional arrangements and funding of the period to get us from where we are to where we would like to be. That is where our challenges lie, rather than the principles of the Bill itself.

Thanks, Sally. Would anybody else like to add to that at all? Darren.

Thanks, Chair. I completely agree with what Sally has said. We absolutely support the principle, and I think, very broadly, we don't feel that providing care and quality care as the priority for the children who require it is compatible with an imperative to achieve targets that are set by shareholders or private equity funds. Those two things are not compatible in my view, and therefore, I think, a removal of that profit means that the focus is predominantly, if not exclusively, on the needs of children, who quite often have very complex needs and require that attention given to them.

Thank you, Darren. Craig, do you want to add to that? You don't have to.

It's just a consistent view, in terms of I think it's a fairly unified voice across local authorities. 

Thank you. So, I guess the next point is, then: why is the legislation needed? Why don't local authorities just get on with it and set up the services and appropriate children's homes? If it's such an important part, and important direction, why don't you drive it, and just put these things in place? Why is legislation needed? Sally, do you want to go first?

Yes, we're just going around; we might change it at some point. But it's a really good question, Sam, and thank you for the question. I suppose part of the answer to that is that, if you look back over the last 40 years of children's social care, what we've seen is a move away from a position where local authorities do provide all the care. When I first became a social worker, it was almost unheard of that you were looking at this type of development and these sorts of markets. In the late 1980s, what you saw was that almost all provision was in the local authority sector—a little bit with not-for-profit. And, then, there was a significant shift away, driven in part by local authorities, but also by Government policy. So, we're looking at over 40 years of change in this arena. That's part of it.

A number of local authorities in Wales have taken significant steps to try to work towards a position where we can further develop our own in-house provision. I think part of the challenge is the resourcing, and where we can manage that resourcing. And, in some ways, for me, a key emphasis for us in how we drive this forward is: where does that resourcing come from? The local authorities don't hold sufficient resource and capacity alone to be able to do this, and hence why the legislation, and therefore the company resource that we hope to see that will go with it. That's the first part. 

I think the other one is that, whilst we, across ADSS and AWHOCs, are reasonably unified in this, that's not true across the whole of the sector. So, I think that the legislation really helps us in terms of driving those messages in the direction of travel and the way that we need to go. And, I suppose, an increased element of that would be use of the not-for-profit sector, as well as the local authorities. 

Thanks, Sally. Darren and Craig, and I'll bring Mabon in afterwards. Darren. 

Yes, I just want to expand a little bit on the resource element there that Sally touched on. And, in answer to your question, first of all, time. Why don't we do it? Because of the time it takes to do it, and how that competes and impacts on the level of pressure that we're already under, and the lack of capacity we're already under in children's services as a result of the demand that has been increasing year on year for the last few years. 

Just as an example from Pembrokeshire, it's taken me two years, from purchase of a property, to develop that property to a point where we are just about to be registered by the regulator. That's cost in excess of £1 million to purchase and renovate that property. I think that is in excess of the assumption that's been made in the impact assessment that was done by ADSS Cymru, which, I think, was averaging about £700,000. But it's the time, it's the expertise, it's the resource, and I think it's also fair to say that we are supportive of there being a mixed market, and it's not just a simple matter of local authorities taking over, wholesale, the care of children. A mixed market that allows for pockets of particular expertise to develop in areas that local authorities don't have gives true choice and a true range for children and young people in terms of their care options.

Thanks, Darren. Craig.