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. 

Sally touched on it, but, for me, this isn't just about social services. We need systemic change across the system, and the legislation needs to bring in education, housing, the NHS. Because if we're to provide rounded services for our children locally, it's all these stakeholders working together to ensure those services are available and wrap around. So, the Bill does drive that systemic change, which is what we need.

Thanks, Craig. I'll bring Mabon in, and perhaps a response to Mabon's point, and then Mark Drakeford will come in with his. So, Mabon. 

Would you like to respond, Sally?

Those private businesses are paid by the local authorities to do this work. This isn't a question that the private businesses do it out of the goodness of their hearts and then give it to us. Part of the issue for the local authorities is that because of the position that we are now in, we don't currently have the resource to drive the change that's needed. So, it's not that we're unable to do it; what we can't do is run in parallel.

The imperative for us is the care of children. It's the quality, the positive care of the children that we are responsible for. And to go from where we are to where we need to be in terms of the Bill requires us to invest significantly in developing two aspects of service: the first is increasing our in-house residential provision, and the second is increasing the number of foster carers we have. And we are currently paying for children to be cared for in those environments. So, in order for us to get to a point where we are able to retrieve that money—. In some ways, it looks like a simple equation, doesn't it? You stop paying the private provider; you develop it yourself. But, actually, we have real children in placements today. We have children in a number of placements across Wales—over 500 children in private placements. We need to continue to care for those children while we develop our own in-house provision. So, in effect, what we're talking about is the resources to run systems in parallel—that's one element of it—whilst we get from A to B, okay? So, that's the first part in terms of the resourcing and the capacity.

The other element Darren touched on, which is that within children's services, the level of pressure and the number of referrals that come in and the amount of work that is done in order to support families and to support families effectively, to ensure that their children can safely remain with them, and where that isn't possible to provide good care, has been driven up in the past five years, firstly from the pandemic and then the cost of living. So, what we're seeing in local authorities are significantly increased referrals. How we end up caring for those children is a whole spectrum of discussion, but in my own local authority in Newport, for example, on average we take now close to 300 referrals a week. So, just working in that environment and the capacity and what we've got focused on that means that we haven't got additional resource and capacity to make the change to get us from A to B. That's the first element.

The second element is in terms of the cost of our provision, in that what we want to do is to provide the best quality provision for the children in our care—that is absolutely what matters—and it isn't about local authorities being able to do this more cheaply. It is about local authorities and not-for-profit being able to provide the best services for our most vulnerable children. And one of the challenges that we have within the local authority is very often our pay, our terms and conditions, which mean that our staffing is more expensive than that offered by the private sector. So, we're having to look at ensuring that the sums on this do equate in terms of how we manage that transition period. So, when I talk about resources, I'm talking about, realistically, a period of some seven, eight, nine years, to get us from where we are to where we need to be in terms of running parallel systems.

Thanks, Sally. Darren, could I bring you back in in a moment? Is that all right? Mark Drakeford has got a question. Perhaps if you respond to Mark and tag on some of what you wanted to say there as well, that would be helpful. Mark, over to you, please.

Thank you, Mark. Do you want to come back first, Darren, on this point and perhaps the previous one, and then we'll move to others? Over to you, Darren.

Yes, I think perhaps my answer covers off both those questions, really, certainly to some extent. The simple, straightforward answer, which Sally touched on, is one of demand versus resource. Why have the numbers of children not come down? Because the demand is outstripping resource consistently over several years. And why can businesses do what we can't do? It's because we don't have that excess of expenditure that we can devote to developing this provision. For example, for the largest residential providers, I think in the years between 2016 and 2020, they were averaging about a 19 per cent profit margin. They've got that pot of money to be able to develop further and to build. We don't have that. After 13 or 14 years of austerity, local authorities are facing real-time reductions and massive increases in demand. 

And I think, in response to the question about why are some local authorities succeeding and some are not, I think there are legacy decisions there. They are not recent decisions that have been made. To use Neath Port Talbot as an example, I think that's about decisions that were made over 10 years ago—strategic and financial decisions that were made that long ago that have paved the way for changes and improvements to happen in respect of looked-after children. And I think, for many of us in Wales, we are reaping what had been sown many, many years ago in terms of local government decisions about strategy and finance. I know that Carmarthenshire was mentioned, and I know they've always been very low, but even Carmarthenshire in recent years are now seeing an increase in the number of children looked after, and that's as a result of the same pressures that the rest of us are facing in terms of demand versus capacity. 

Thanks, Darren. Does anybody else want to come back in? Sally.

Can I just come back? Obviously, I absolutely agree. One of the things that we've talked about is that the policy is predicated and, actually, over the last 10 years, we haven't been able to reduce those numbers. What we've seen is some stabilisation, but actually we've seen some continued increases. We could spend all afternoon talking about this. This is an issue where there is a depth to it, and really to unpick it, I think you need that richness and depth to understand it. 

I think there is a series of issues that Darren touched on in terms of the long-term decision making across some local authorities. I think in some local authorities—I'll speak for my own—we have seen a reduction, but we've also seen a significant increase in the number of children we voluntarily have taken in terms of unaccompanied asylum-seeking children. We are really proud to take unaccompanied asylum-seeking children, but those are children where there is no alternative other than care. And when I look at the figures for my own local authority, if I look at my per 10,000 rate, if I took out my unaccompanied asylum-seeking children, I would be in a very different position. That's not true of all authorities, but it is true of a number of us who have chosen to go down that route in terms of supporting that extremely vulnerable group.

I think the complexity in terms of why some local authorities have been able to reduce and some haven't is something that I think we still haven't really got to, and neither has all the quantum of research that has been done in this area. We talk about poverty, we talk about demographics, we talk about strategy, we talk about leadership. For me, there is something, though, predicating the whole new policy on that I think is challenging, because I am sceptical that we will be able to take that forward again without increasing some of our early intervention and prevention resources. If you just look at Families First and Flying Start as early intervention across local authority areas, sadly some of those grants have stood still over a long period of time. That inevitably impacts on our ability to deliver early intervention and prevention.

So, I think the complexity to that answer is huge. That doesn't mean that we shouldn't continue to explore it. And I think all local authorities want that. I would put my head on a block and say that there is no head of service and no director that wants to bring a child into care unless they absolutely have to and that challenge is there day in, day out in every local authority in Wales.

Thanks, Sally. Mark, is there anything you wanted to pick up off the back of those responses?

I'll very briefly take on those and then I'll go on to my other question, Chair, if I could. Sally, I wish we could spend all afternoon, because it really would be worth it. The fact is that in Wales we take more children away from their families per 100,000 of the population than the country along our border, and the gap between Wales and England has grown year on year over the 20 years of devolution. So, we are in a much worse position than we were in the year 2000, so it really does need us to get below the bonnet of that. And I'm always told by directors of social services that no child is ever taken into care unless it is absolutely the last resort, and yet my constituency work is dominated by families who absolutely dispute the circumstances in which local authorities have made that decision. So, I think there's a lot we could talk about if we had the time.

I'll go to my second question, though, which is: local authorities faced with the Bill say two things to us: 'We want more time, we need more money.' And I'd like to just challenge both of those things, really. Local authorities have been responsible for looked-after children in Wales for decades—well before devolution, this was the responsibility of local government in Wales. What could you say to the committee that will persuade us that yet more time is needed before we grasp the nettle in the way that this Bill does? We heard from an earlier panel of the very, very many challenges that we know are there in providing services for looked-after children—difficulty of recruiting foster carers, the stresses and strains in the system—can we afford to give even more time before we get on with what needs to be got on with?

And on resources, it isn't a choice, is it, between the cost of this Bill and the system as it stands just staying still, because the costs in the current system are accelerating away from local authorities year after year? So, if we don't do something, it's going to cost you even more than it will cost to implement the Bill. So, why should the Welsh Government pick up the costs for the Bill when local authorities without the Bill will be faced with a far more quickly escalating bill, which local authorities will have to find the money for themselves?

I'd really welcome the opportunity to have that conversation one afternoon. I'd be very happy if you got in touch. I'm sure we could make arrangements across a number of us to do that.

I think that, in relation to the change, the first thing is that one of the things that I would want to challenge is that the care of children is necessarily poor. We're not saying that; we're saying that many of the children who are looked after by us and local authorities do really well. We all would be able to provide you with examples of children who go on, who excel, who go to university, who pursue careers, and who have their own children and care for those children and love them dearly and are able to care for them. So, it's not that the system is totally broken at the moment and that therefore—. But it is a shift in the way that the system delivers and that's what we need the time to do. So, we're not asking—. Nobody has said to the local authorities throughout millennia that you need to stop using the private providers until this point. There are lots of discussions about, 'We should be doing it', but this is different in terms of that push to take us.

The accelerating costs are really interesting, and I agree with you, that is hugely challenging in most local authorities that are already carrying significant overspends in relation to their children's services budgets. But what we've actually seen in the last two years is an acceleration in those costs because of the unintended consequences of the proposed legislation—that's one element. The fear that we have in relation to the legislation—and, again, it's how we work with this—is that within the models of care, there are currently four models of care that are agreed or proposed within the draft Bill and we would be really keen to see some further exploration of those models of care. Local authorities have a duty to promote social enterprise co-operatives and what we would like to see is some join-up between the models that are agreed within the Bill and what we're able to do.

Part of the reason for that is that we fear an unintended consequence in terms of small local businesses that provide good-quality, local care, employing local people—that they are at risk of going out of business, whereas the very big hedge-fund, private equity companies, who leave us most with distaste and alarm in this arena, will be able to continue to deliver, but what they will do is they will place a management charge and a recharge to us. And we're starting to see that already, where you see complex legal arrangements of arm's-length provision from England to Wales, where you have not-for-profit delivery in Wales but an arm's-length company in England. So, there are some unintended consequences that will continue to drive some of those costs up.

The per-bed placement costs we're already seeing in residential placements have been driven up out of all proportion over the last two years and what providers will tell us is that some of that is a result some of this direction of travel. So, we have to find a way to stem that, I couldn't agree with you more. We absolutely have to find a way to stem that, but we need some help to get us from where we are to where we need to be.

Okay. Thanks, Sally. Darren and then Craig.

I think it's important to state that this Bill represents the biggest single change for children's services—indeed, social care—since the Children Act was introduced in 1991. It's of enormous scale and impact for children's services, and we've never been asked to manage something of this scale before. That's why it's challenging for us to cope with the time and the resources that this project will demand of us. And there needs to be a swing of the pendulum in favour of local authorities and we said at the outset that that is accepted, but we can't stop doing what we're currently doing in order to divert resources into this. There's got to be some arrangement whereby we are supported to transition and work through this change whilst we continue everything else that we do. We don't have another pot of money to allow us to swing the pendulum across: we've got to continue doing what we're doing for a period of time, continue funding and managing placements the way that we do, with support to transition through in both time and finances.

Thanks, Darren. Craig, and I'll bring Gareth in in a moment. Craig.

I'd just like to reflect that local authorities are responding to the Bill. We are working, so we've come together as Maethu Cymru in terms of fostering, but, certainly, if I gave an example of my local authority, up until very recently, we had no in-house residential care, for all kinds of reasons. But we know—so we've gone from an organisation that had no knowledge and experience, and for a long time of running and developing children's homes—that it takes us two years, because there is so much to do in terms of planning, finding construction, meeting the specific requirements of registration. We've got knowledge and experience now; we know how long—because we're working on this agenda—it takes us.

So, the timeline is challenging because it needs to be realistic around the amount of work that it takes to establish, particularly, residential care homes, and we've invested resources in that, but we are at a point in terms of the scale of what needs to be done. We do need financial—both capital and revenue—assistance to be able to rebalance and change that to a local authority and not-for-profit market.

Thanks, Craig. Gareth, can I bring you in, please?

Thank you, Chair. Good afternoon, everyone. Section 11 of the Bill inserts a new duty on local authorities to prepare and publish an annual sufficiency plan for accommodation for looked-after children, as Sam and Mark Drakeford have alluded to, around the legislation. Is there a case to legislate for this, in your opinion, and if so, what would be that case, because, in terms of funding that Mark Drakeford alluded to, would that cause a further issue down the line in terms of ambiguity around who was responsible for funding or implementing these things? Or is it best just to not legislate and let local authorities get on with the job?

Can I just come in on this sufficiency plan, just quickly? So, in relation to the proposal for the sufficiency plan, what we would like to see is significantly more detail in relation to the proposed sufficiency plan, but also how it aligns with existing work. So, for example, under each of the regional partnership boards, we already have duties in terms of market position statements, and those refer exactly to how we work with our providers. So, specifically, in relation to the sufficiency plan, that is what we would like to see.

I suppose in relation to that bigger question about is legislation needed, I'd go back to Craig's response, which is about systemic change and really ensuring that that's driving across every aspect of local authorities with our health colleagues, and indeed looking at it in terms of how that messaging in terms of wider society is in terms of expectation while we grow the change that's needed within children's services.

Is that achieved at a local or a national level? That's the second question.

I think it's both. You need both of those things, it's local and national.

Thanks. Darren, did you want to come in?

Actually, Sally covered exactly what I was going to say. Thank you, Chair.

Okay, no worries. Did you have anything to add, Craig? No, okay, thank you. Gareth, are you happy with that?

Yes. Thank you, Chair.

Okay, thanks very much. So, we're going to move on—we've got Joyce. Sorry, Joyce, you moved around my screen for a moment there. Joyce Watson on potential barriers to implementation. Joyce.

Good afternoon. I'd like to know or have an idea of your understanding of the national number of new not-for-profit placements that are required and what are the biggest challenges in delivering them? We've just heard one from Craig. What more could the Welsh Government, beyond what Craig has already said, do to help that?

If I just touch on the numbers first, and then we'll look at some of the challenges. So, the number of children in care changes every day, and where those children are changes every day, so you're looking at a moving position. The other issue that we have that is linked to the Bill is in relation to the transitional arrangements, so that's looking at exemptions and exceptions over the period of the transition and then, indeed, moving forward, for some specialist placements. So, to give that definitive answer, we need that better understanding of the exemptions, basically.

It is hugely variable across local authorities. There is one local authority where there is very little work required—Mark Drakeford has already referred to Carmarthenshire—partly because of their numbers and some of their provision. You then have a couple of larger local authorities where there are hundreds of placements that will be required, and then, in the middle, you have the rump of local authorities where it will be tens.

I can talk from my own local authority. We have never disinvested from children's homes, we have always run children's homes, and we've continued to develop them at speed over the last 10 years, but even so, we know that we will need to develop a further two children's homes to match our current need. We also see a very particular need for specialist provision for disabled children, which is something we are going to struggle to manage on a local authority basis, and we will need to look regionally. We're doing that. We're doing that piece of work to work with regional colleagues to develop that more specialist provision where we would never have the skills in-house to be able to do that, and we need to work with colleagues to do that. That's true across Wales.

I think in terms of the challenges, Craig's already touched on them. The challenge in residential care is capital and revenue. It's a two-year run-in to establish a children's home; accessing the capital and revenue in parallel is really challenging. But in addition, when you look at Maethu Cymru and you look at foster care, developing and ensuring that we can increase the number of foster carers that we have is also challenging. We know that we've seen decreases in the numbers of people prepared to come forward. Whenever this matter is raised locally with my scrutiny committee and I'm asked, 'What I can do?', I say, 'Could you become a foster carer?' That's one of my stock responses on some of this, because ensuring that we have the people who are able to offer that quality and that we can then offer the support for them is key. So, I think that is an ongoing challenge, and the resource that we need.

To move foster carers from working for an independent fostering agency to a local authority is a process. We are already working with Welsh Government to ensure those processes are as robust as possible, but that is a challenge. That also links to the final part that I just want to raise, which is in relation to the inspectorate, which is also ensuring that we have sufficient resource within the inspectorate to move from the current position to where we need to be in terms of registering new provision.

Thanks, Sally. Do any others want to add anything to that? Darren, then Craig.

Yes, I was just going to refer quickly to the regulatory impact assessment that's been completed. It plays out a number of scenarios in there—one, which is that the number of providers that transition was 50 per cent, would still require an additional 102 residential homes in order to provide for current numbers of children in care. So, I think one of the issues is, really, that we don't yet know fully what it looks like, how many providers are actually going to transition to the not-for-profit model and what the gap is going to mean in that regard. If none of them—I know it's unlikely, but—if none of them transition to a not-for-profit model, we'd be looking at a requirement for an additional 204 residential homes in Wales, with 653 beds, based on current figures. But, as Sally has said, those figures fluctuate, and, as it currently stands, whilst they might be stabilising, there's a possibility that those numbers will further increase. So, there's that kind of unknown element as well, which throws a significant element of jeopardy into the debate.

Thanks, Darren. Craig, thank you.

Just to add some specific barriers, so, for me, workforce. I work for Flintshire, we're a bordering authority, and one of the challenges that we have, and other bordering authorities will have, is that, on the border of us, we will have independently run residential children's homes and they are already offering higher salaries to attract the workforce, so we really have to work through and work hard at how we ensure that we've got a sufficient workforce, particularly for, I would suggest, bordering authorities. And we were asked what Welsh Government could do in terms of helping us with these barriers: the ones I would add is just clarity around resources, capital and revenue and the timeline so that we can do effective planning, but also I would ask for support around engaging partners to ensure that it's a shared endeavour.

Thank you. I'm not going to ask some of the other questions, because they've clearly been answered in previous questions. But one of the questions talks about the time frame from the WLGA for transitioning from that market, the mixed market, to a non-profit model needing 10 to 15 years. Do you want to explain that? We've heard varying timescales, but we haven't actually heard 10 to 15 years, so I'd be interested where that came from.

I don't know where that came from. I know that some of the modelling that we've done internally and some of the modelling that's been done with ADSS is not so much—. It's about how long it takes to move from the position where we're able to shift some of the money over; those figures, you're looking at seven to nine years, is what we've looked at in my local authority, in order to really move things. And again, I'll come back to—and it picks up on Craig's point about clarity—clarity on resources, but also clarity on things like exemptions and how those are going to work and what the timeline for some of those will be and how that will play through in terms of the system. But I'm afraid I can't enlighten you in terms of that 10 to 15 years.

It does say that—and it carries on to the next bit, just to continue where you've left off—in the regulation-making powers of the Bill, there is an allowance for Welsh Ministers to determine the end of the transition period and the ability to set different days according to different types of services. So, it does say that within there.

Yes. I think the challenge that we have is that some of the discussions that there have been around exemptions and within the Bill—. I mean, there are two different things. The first is for children who are currently in placement and the arrangements that could be made for those children to remain in for-profit placements for a period in order to ensure that that child's well-being is met. So, for example, you may have a child in a for-profit placement with a provider who's not prepared to transition; that child is settled, they're happy, they're in school. There are some real issues around that, so, for example, if that child is in a four-bedded placement, so they're in a children's home of, say, four children and they're the only child that is an exemption, the local authority who is then paying for the care of that child is likely to find themselves in a position of paying four times in order for that home to remain open. So, trying to tease out some of the detail in all of that is some of the work that we need to see quickly.

The other element is in relation to exemptions beyond that. So, this will be where children become looked after and where there is an option to apply to Ministers in order to be able to place them in a for-profit provision. Now, at that point, it would almost certainly be a for-profit provision in England, because we would no longer have that provision within Wales. So, again, it's some clarity about what will those exemptions look like, and where does that fit in terms of a couple of things—management of risk, in terms of the ownership of the risk in terms of the care of that child, but also in terms of public law, in terms of where statutory responsibility lies for that child. So, some of the teasing out of details in both of those areas—exemptions for children currently within the system, but also for those who may require very specialist placements that can only be sourced in for-profit provision, for example in England. So that's some of the detail that we would like to see.

Thanks Sally, and I'll bring Darren in. After Darren, John, I know you've got some questions on a similar sort of theme, but I'll bring Darren in next, thanks.

Just quickly, Chair, on the issue of seeking ministerial agreement to place across border, that to me represents a separation out of the decision-making responsibility and the consequent management of the risk, and, for me, you can't separate out those two things. Heads of service, directors, make very important risk-balanced decisions, and they then go on and own that risk, which is quite right. We can't have a situation, in my view, where a Minister who is removed from the operational realities of individual children's situations is making decisions about those individual children and then leaving the heads of service or the directors to manage the consequent risk. Those two things cannot be separated out. The person that makes those risk-based decisions has to be also owning that risk, and that for me can only sit in local authority head of service or director hands. 

Perhaps I'm misunderstanding this, but it's not what I was understanding, that any Minister would have a hands-on, predetermined scope to do what you just described. My understanding was the transition period for different types of services, rather than an individual in the service, and I think this is an important point here that needs some sort of clarity from what I've read, and what you've just said.

I think—. Sorry, Sally.

No, you go, Darren, it's fine.

You're quite right; it's two different things. There is provision to put special conditions for individual children for transitional arrangements, and I guess where we strayed into then was the question of Ministers giving permission for us to place cross-border where there are not opportunities to place within our local authorities or within Wales.

I just didn't see how those two things came together. Thank you.

Okay, thanks Joyce. Mark, is your point in relation to that issue in particular? Go on Mark, and I’ll bring John in.

I just wanted to point out that there is a precedent for this, that it isn't introducing something wholly new. Whenever a local authority seeks to place a child below a certain age in secure accommodation, that decision has to have the approval of a Minister. So, we do this already. The idea that you cannot separate decision making—. We can have an argument about the desirability of it, but the principle already operates in the Welsh system.

It does operate, and we all recognise that, and many of us have been in that position and we know how that operates. I suppose one of our challenges comes because we know how that operates and some of the issues that that creates. So, I absolutely accept that the principle exists. I think the desirability of it is something that we would wish to challenge.

Okay, thank you very much. Let's move on to John, with some questions from your side, John. Thanks.

Diolch, Cadeirydd, and afternoon, everyone. Yes, some questions first of all on costings and estimated savings in the regulatory impact assessment and what confidence we may have in them. Welsh Government commissioned the Association of Directors of Social Services Cymru to assess the financial implications of the proposal to eliminate profit, but we have written evidence from the WLGA that states that some of the operational savings that have been identified with moving to a local authority model from a for-profit model are contested. So, I'd be interested in your view on how confident we can be in the costings and estimated savings that are in that RIA. 

So, just in terms of—. Absolutely, ADSS Cymru was commissioned and they provided the information, but, in the end, the regulatory impact assessment is owned by Welsh Government officials, not by ADSS. We provided information that then goes into that document. And that information was taken from across a whole range of sources within our evidence world; 4Cs in particular contributed significant amounts of information for that RIA. But, in the end, that document is an interpretation of the data that we've provided, and I suspect hence why there is some element of contesting. 

And I would also go back to the discussions that we had earlier about some of the uncertainty about timings. The property market will influence dramatically where we go in terms of capital provision. And then, in addition, Craig touched on workforce and what we know is a real challenge in terms of the workforce for this area is knowing that we are almost certainly going to have to look at how we improve the offer to increase the number of residential workers we have, but also our offer for foster carers, and how we ensure that both the financial support that we offer to foster carers but also support is commensurate with the task that we're asking of them. 

So, I think that some of that uncertainty refers to all of those elements.

Thanks, Sally. Darren, do you want to come in? 

Yes, just to highlight that, within that impact assessment, there are eight pages of assumptions that lead on to the conclusions, which, of course, is going to lead to a range of values that we might debate over. To give an example, the average cost of a four-bedroomed property is quoted in the assumptions in Wales as being around £360,000. In Pembrokeshire, it would be far higher than that. In other areas, it would be lower than that. So, I think there are going to be some vagaries as a result of the large number of assumptions that have had to have been made to arrive at this assessment.  

Thanks, Darren. John, we'll come back to you. 

Thanks very much for that. Staying with the financial side of things, in your written evidence, you refer to the Bill requiring significant investment. You've touched already on financial issues, but I wonder if you could tell us a little bit more in terms of what sort of annual financial commitment you would want to see from Welsh Government as we move forward to develop that not-for-profit provision. Do you have some comfort from Welsh Government that that funding will be provided? 

That's a huge question, John. Obviously, there has already been some investment from Welsh Government, and we've seen some investment in both radical reform and the elimination of profit agenda, so we have seen some. I think picking up on a point that Craig made, what we don't have is any certainty whatsoever about what that's going to look like going forward, both in terms of quantum or in terms of how that funding will be managed. And I guess our plea is needing to have some real understanding from Welsh Government with speed—and I appreciate in terms of financial settlements, this is really challenging—about how that is going to look. 

We understand there is likely to be further funding in the same way that there has been already to address some of this agenda, but what we need is clarity and we need that quickly in order to drive this. Just to give you an example, because in the arena of opening children's homes—we'll go there—we're doing this now, we're going out, we're doing this, we're doing this day in, day out. Like Darren, like Craig, this is the work that we're undertaking. But, in order to really continue to drive that, we need to have some further understanding about funding, and we don't have that currently, John, no. 

No. Okay, Sally, I wonder if I may, Cadeirydd, just a follow-up question. You referred to the funding already provided and there was, of course, £68 million in terms of preparatory work for the Bill. Are you able to tell us how many new not-for-profit placements resulted from that funding?

I can't tell you how many not-for-profit placements resulted from that funding. Craig has already alluded to the fact that a number of local authorities who historically had not been providing residential care—. We can get that information for you in terms of where local authority provision has increased. Actually, one of the challenges in this is that the current not-for-profit world is really very limited in this arena; it's a small number of relatively small providers. You've got a couple of big players, but most are small. 

And then, in terms of that conversion of existing for-profit to not-for-profit, as Darren has already mentioned, particularly in residential, there is still considerable uncertainty about which of them will switch. So, in terms of newly opened not-for-profit, no, we can't give you that information. We could go away and source that for you. What is very clear is that all 22 local authorities have absolutely been working in terms of either developing their own provision or looking at what's needed regionally, to be able to deliver on a regional footprint. And that £68 million was for radical reform and eliminate—it was for both things. So, in a number of local authorities, I'd use my own. We've also used that money very heavily to provide therapeutic support for children and to really look at how we can develop a more comprehensive offer to children in terms of therapeutic care. We've used it for rapid response as a front door, to ensure that, as alluded to earlier, we can work with families earlier to prevent children coming into care. So, part of that money was for eliminate, but part of it was also for rapid reform in terms of system change.

Okay. Thank you, Sally. Thank you, John. Was there anything, Craig or Darren, you want to add to those points at all? No. That's fine. Okay, thank you. Mabon, could I bring you in now, and I know it's been touched on a little bit in terms of the unintended consequences, but perhaps there are some other points as well?

We've already seen that.

Okay. Sorry, Darren, do you want to come in on that point?

Yes. I'm guessing Sally was probably going to say similar. We've got examples of what might happen already, in that we have been forced, as local authorities, to operate settings that are not registered, are unregulated arrangements for children's care, because of a lack of sufficiency. And if we are not given enough time as local authorities and the sector to transition, the risk is that there will be an enormous decrease in the numbers of placements and beds available for young people. The demand is not going to follow that drop; the demand will be the demand, and therefore we will still have responsibilities to provide care arrangements to those vulnerable children. And as we have seen in the past years, as our sufficiency problems have increased, we've had to make unregulated arrangements for the children that are not as safe, do not provide as good outcomes, as do regulated provision, and they place enormous pressure on local authority staffing and budgets. But most of all, they place those children at greater risk, as a result of them being unregulated and staffed by people who are not specialists—do a great job in difficult circumstances, but nevertheless, are not specialists—and the fear is that we will plough into a situation where the numbers of situations that are operating without regulation—OWR—will increase exponentially, with a number of vulnerable children in those unregulated settings being placed at greater risk when compared to situations where they would be placed in regulated and managed settings.

Yes. Craig.

Well, unfortunately, I don't have the answer, sorry. I put my hand up because it's complicated, there are so many interdependencies. Right now, and we've talked about our sufficiency assessments and plans—. I've looked at my looked-after population—I've looked and done some projections around what I think the future need will be for foster placements, for residential placements, for five, 10 years; I've looked at what provision we've developed locally and how that can meet. Where we are with the Bill, I still don't know. I'm going out to talk to our local providers—I don't know, and they say that they don't know yet how many will move to not-for-profit models because we've got some good local providers, and, actually, if they convert to not-for-profit models, I will still commission because they deliver good outcomes for young people. 

I also don't know, although we're having conversations with the third sector, what provision they will develop, because for me to actually work through, 'Okay, this is x number of children. That's what I'll be able to buy through not-for-profit models locally. That's what I'll be able to buy from third sector', that leaves me, then, with, 'Well, what is it, the gap I need to either develop locally in my authority, or regional with my partners?' And what I don't have a sense of yet is the timelines of when people will start identifying as businesses in my area, and what will that translate to in terms of need and then what does that mean in terms of our developmental plans. So, until we get that clarity around exemptions and legacy, our providers are saying they can't make business decisions. So, it's a bit like a chicken and egg at the moment. 

That's great. I think, Sally, you wanted to come in.

I mean, I suppose it's just going beyond the views of the directors and the heads of children's services and looking at the May 2024 paper from the Wales Centre for Public Policy, and in that paper, one of the things that they raised was the concern about stability, and what they identified was the need for a sophisticated plan to manage the change. That's not just about the local authorities, that is about Welsh Government, that is across the public sector as having a joined-up, coherent approach to this for all of us. And the other element that I would highlight within that paper is their agreement on the need for investment, and that this policy will not be effective without that investment. So, in relation to the timelines, I think it's really being able to pull down to look at, 'What is a reasonable time for transition?', 'What is the period that will be needed for the local authorities to be fully ready?' And not even fully ready, but fully delivering effectively in the way that we want to, and a true end to the transition. I think looking at that sophistication of the planning, the project management, is really important in terms of the next steps for what happens to identify that timeline.

Thanks. Mabon, do you want to come back?

I'm not sure that I do agree. I think there is significant data in the world of fostering. I mean, Maethu Cymru has collected—. I mean, we all submit very significant data through to both 4Cs and Maethu Cymru; we submit that data on a quarterly basis. That's about our in-house fostering provision, but it's also about our children. The Children's Commissioning Consortium Cymru holds an absolute wealth of data about the for-profit and not-for-profit providers, so that data is available, and in terms of the needs of children, every local authority—I mean, Craig's referred to it already, in terms of looking at our populations of children—our head of children's services locally will look all the time at the needs of that fostering population, hence why some of us have developed other services to go with fostering. Similarly, Welsh Government itself has done significant work around the fees and what all the local authorities are currently paying in terms of the support. So, I think the data is there.

I mean, we all hold that information and 4Cs holds that information for private providers, so that information is held. I'm not sure what purpose a national list would hold, in a sense. Sorry—.

Okay. Would anybody else like to add any points to those that have just been raised there? No. Okay. So, we're getting right towards the end of our time together. Gareth, I'd be grateful if you could perhaps look to wrap things up for us, and then we'll close our time together. Gareth, over to you, please. 

Thank you, Chair. Just a summarising question, really, in regard to contributions, questions, answers raised within the last hour. What do you think the main thing is that you want to bring to our attention in terms of our scrutiny of this Bill, and what we can do as a Health and Social Care Committee to best scrutinise this Health and Social Care (Wales) Bill, in your opinion?

I think you can probably guess what we're going to say. I think that, for us, it will be the detail, understanding the resource and coming forward to us at speed with what that looks like. That's absolutely key for us. 

Okay. Darren. 

Thank you. I think, in scrutinising the Bill, let's not forget the people that matter most, and that's the young, vulnerable people that we have to provide placements for, and we have to provide support to. It's one thing to be talking about strategy, sufficiency and budgets, but, ultimately, if we get this wrong, children will suffer as a result. So, I would only plead that you retain a focus on the children that will be impacted as a result of this Bill, whichever way it goes. 

Thank you, Darren. And Craig. 

I would say the size of the task cannot be underestimated, and ensuring that, in local authorities and Welsh Government, there is that capacity to ensure that we're able to work up the detail together, to ensure that we can make this a success.

Thank you. 

Great. Thank you. Thanks, Gareth, and thank you all for your contributions this afternoon. We're going to bring this evidence session to a close. We're grateful for your time, as I say, again, in these busy roles that you have. You will receive a transcript of today's meeting, so please feel free to check that for any inaccuracies. Also, our evidence-gathering as a committee ends on Friday, so if there's anything further that you wanted to submit, which you haven't been able to raise this afternoon, then feel free to please send that through to us as a committee before Friday and that will be gratefully received. 

As for the rest of the committee, we're going to take a brief break now to prepare for our final evidence session for this afternoon. So, we'll meet back again at 13.40 p.m. Thank you very much. 

Diolch. 

Thank you very much. Thank you for having us. 

Thank you. 

Good afternoon, everybody. Thanks again for joining us for our Health and Social Care Committee at Senedd Cymru. It's a virtual session, and we're continuing our scrutiny of the Health and Social Care (Wales) Bill. Our final session for today is an evidence session with the Association of Directors of Social Services Cymru and the Welsh Local Government Association, in particular around the direct payments for healthcare element of the Bill. We have four guests with us today. I'd like to welcome Jason Bennett from the all-Wales heads of adult services group, Vale of Glamorgan Council and ADSS Cymru, and Councillor Andrew Morgan, WLGA leader and leader of Rhondda Cynon Taf County Borough Council. We've got Zoe Williams with us as well, who is the chair of the all-Wales direct payments forum, and finally we have Mark Cooper, vice-chair of the same forum, the all-Wales direct payments forum. We're very grateful for all of your time this afternoon. 

I'll kick off with a general question about what it is we're discussing today, and I'll invite Members to ask some further questions as well. And just a reminder: if you'd be able to raise a physical hand if you want to respond, rather than a virtual one, as that will be easier for me to manage. But perhaps you'd be able to tell us a bit about councils' or local authorities' experiences of administering direct payments in social care, and any lessons that could be learned for the implementation of this Bill. Who would like to kick things off first of all? Mark.

I'm happy to kick off. I'll speak on behalf of myself and Zoe. We've been around for quite a long time, leading on direct payments in our local authorities and nationally, since around 2000. So, we were there in the early conversations when direct payments were being implemented in Wales. I think it's fair to say that there was uneasiness at the time. There were difficult conversations. I was reflecting on this potential change for health boards in Wales. One of the memories that I have is the difficulty facing local authorities at the time to relinquish control, or potentially think about relinquishing control, over decision making, putting the power into the hands of citizens. At the time, it was a change in practice and ethos. I think those challenges will remain for health boards. 

I think where we're at now in Wales, certainly from a local authority perspective, is that we've certainly found middle ground with citizens. I think that the word co-production is a bit of a buzzword, but my belief is that direct payments, when they're done well, are one of the best examples of co-production. I think we work co-productively with citizens, with other professionals, with support services to co-produce highly effective, efficient, resource-sensitive solutions for people, and I think that is the opportunity that's presented here.

Thanks, Mark. Zoe, do you want to add to that as well?

I echo what Mark has said. I think the benefit of Mark and I being vice-chair and chair of the all-Wales forum is that we have been around a long time. We've certainly seen lots of changes with direct payments, and particularly external changes. We've experienced a lot over those years. There have been things like the implementation of the auto-enrolment pension—something that was completely out of our control, but actually it affected direct payment recipients. And we had to go on that journey and learn together. I think one of the lessons, and something that we would really like to share, is that we've been on that journey. So, our health colleagues need to tap into us who have experienced those changes, but also direct payment recipients and personal assistants, because their voices need to be heard as well.

Thanks, Zoe. Andrew, do you want to come in as well?

Yes, just to broadly support what's been said. I think the feedback we've had from local authorities is they certainly welcomed the roll-out of personal payments, but I suppose one area to be mindful of is it's not right for everybody and we have to take that on board in terms of people's ability to manage their situations, but also in terms of staff and personal carers needed. In some areas, it is really difficult in terms of individuals being able to be recruited or sought for the purpose needed. So, what I would say is, overall, I think we certainly have been supportive, and where it works, it does work well, but we just need to caveat that it's not for everybody. But that's why those conversations need to be had with those individuals about what is the right way to address their care packages.

That's a fair point, Andrew, thanks for that. I guess, Mark, just going back to your—I'll bring you in in a second, Jason, sorry—initial point about perhaps some of the attitudes or cultural shift that has to take place between local authorities and delegating that control over to citizens, are there any real practical points, aside from an attitude or a culture, any perhaps delivery points that you think that health boards will really need to get a grip of very early on to be able to deliver this?

I've been fortunate to be working alongside my local health board for the last two years to begin to work towards these changes. We've been doing some pilot work around individual user trusts with a couple of families and I think that opportunity to work in partnership with the health board has been really useful in helping to enable us to understand each other and to find solutions to some of the problems, because it's not plain sailing and there are issues. 

I think, from a citizen point of view, from our experience of direct payments in social care, they can be life-changing for many people, but I think also, becoming an employer, understanding the role of being an employer, taking on that personal responsibility, evaluating risk and ensuring that all parties are safe is daunting, and I don't think we can underestimate the importance and the necessity for really high-quality support to people. And I don't mean in a controlling way. I think, going back to my original point, that one of the challenges has been for local authorities and health boards to sit on their hands a little bit, empower people, but at the same time balance the necessity for the right support at the right time.

I think we've learnt the hard way in Wales, and I think, certainly talking from my own position in Flintshire, we've struck a really good balance. We have a great relationship—we're supporting around 600 plus people at the moment to self-determine their lives, take control, use funding resourcefully and cost-effectively and get better outcomes. We've arrived at that position by working really hard with people over 20 years, so it's not a quick fix. I'm not sure if I'm answering your question. I'm trying to reflect on our journey and what's facing health boards.

I think that having opportunities to work really closely and collaboratively with our health partners will be key—as Zoe was saying, involving citizens, really considering what the challenges are and understanding them, listening to each other and reflecting on what that actually means, putting in solutions. I think the health boards have got a lot to learn from not just local authorities, but other direct payment support specialist providers across the country. We can name a lot of people that we would turn to for information and advice. I think that's going to be really key.

Thanks, Mark. Jason, I'll bring you in in just a moment, but perhaps I'll ask another question, and if you're able to answer this, that would be helpful, as well. In terms of some of the governance arrangements that the health boards may put in place to ensure we have the safe delegation of care by health boards to personal assistants, I just wonder if you have any particular concerns around that, around how those governance arrangements should be in place to make sure that's looking as it should. If you're able to answer that point, that would be helpful. Over to you, Jason. 

I'm happy to pick that one up. I wanted to mention that what Andrew said is completely right: direct payments are part of a continuum of an offer, and it's not for everybody. The voice, choice and control that come from the Act are the key part of this. Mark mentioned personal outcomes in his last answer there. The really important bit of this is outcome-focused, strength-based approaches to working with families. We don't leave people alone with a pot of money; we put a support service in around them, which is a direct payment support service that operates really well. People have that support on tap to access at any time that they need it.

In terms of health delegated tasks, it's worth remembering that there are a lot of jointly funded packages of care out there in the community at the moment, and health boards are delegating tasks on a daily basis to domiciliary care workers, to PAs, and the all-Wales delegation framework supports that delegation. What the health boards have to do is assure themselves under that all-Wales delegation framework that the person doing the tasks is competent and confident. But they are doing this already with a number of PAs and families. We quite often train family members to undertake medical procedures. If you think of some of the PEG feeding, enemas, other things like rescue medication, this is being done on a daily basis, so it's adapting what they do and expanding it.

I don't see it as a particularly different challenge; I think it's just with a slightly different cohort of people, and moving it from sometimes the shadows into full light, and doing it with everybody's clear knowledge of what's going on, rather than it being a shared package and not overtly being direct payments for healthcare.

Thanks, Jason. We'll come briefly back to Mark, before I bring Mark Drakeford in with some further questions. 

I was just going to add to that that, from our experience, the people who trigger CHC funding and who would want to continue their direct payments are generally people that are really well known to the local authority. They have strong relationships with us, they understand the support that's available and they work very closely with us. That's all I wanted to say, really. There are unlikely, in our experience, to be that many new people, so they're people that we've already been working with on that journey of achieving those outcomes and meeting those needs in the best way for them.

Thanks, Mark. Zoe, briefly, before I bring Mark Drakeford in.

Just to add, it would be really helpful—and this goes without saying—that any clinical governance or clinical oversight is the same across Wales. We've experienced across Wales that where direct payments are run, the ethos is the same, but each local authority has different processes and systems. And I think one of the things that is key is that, if there is going to be clinical governance and clinical oversight, then that needs to be the same across Wales.

Okay. Thanks, Zoe. Mark Drakeford.

Welcome, of course, to everybody on the panel this afternoon, and a special welcome to Councillor Andrew Morgan; it's great to have the leader of the WLGA with us for this important part of the Bill. I think, maybe, my first question is one for Councillor Morgan, because, Andrew, I wonder what you think the proper responsibility of a public authority is in relation to direct payments. Is it to make sure that anybody who wants a direct payment is well informed, properly advised and the pathway to obtaining a direct payment is made as smooth as possible, or is it actively to promote the take-up of direct payments? Because we've heard evidence of both of those possible responsibilities. Is it the responsibility of local authorities and, in the future, health boards, to positively promote the take-up of it, or is it to respond properly to people who come forward for direct payments? 

If I was honest, I would answer by saying, 'Probably both, but on something like a 70:30 split.' I think local authorities and public services have got a responsibility to make people aware of what's available and the opportunities they have, but I am mindful, as I said earlier, that I think it's important not to push people down that path unless they feel that it is right for them, because it does come with a certain level of burden. Some people, it's absolutely—you know, they're knocking at our door, some are, asking to be able to manage their own situation, and that's absolutely fine. But it's just making sure that—. I think local authorities, we are probably moving in a direction of travel towards encouraging people to take this up, but it's with a very big caveat that we need to make sure it's the right people taking it up and, for some people, we have to be honest and say that direct payments are probably not in their interest. I've seen, in my own local authority, a couple of examples where somebody has wanted direct payments and we've gone along and we've agreed it, jointly, thinking it's the right thing, and, actually, it hasn't worked out for that person. And there are issues around debt, there are issues around employment, with holiday rights et cetera. I know one member of staff and their client had a really difficult relationship, there was a breakdown in the relationship. So, I think understanding the full complexity around what this means needs to be fully explained to people. It is right, I think, for a lot of people and it is the right thing for local authorities to say about it and to press the availability of it, but we need to be clear that we don't push people down a road that isn't suitable for them.

Thanks, Andrew. Perhaps, before Mark comes back in, I know, Jason, you had your hand up—do you want to comment on that as well, Jason?

Yes, thank you. I think it's about good social work practice, where we're co-producing people's care and support plans with them and we explore the range of options that are available to them to suit their needs. So, I don't think it's having a public campaign to promote it, but I think, on an individual basis, it's working with that person, with that family, to tailor the right solution for them. So, it's promoting it at that level as an option for the right people. So, for me, it's about good social work practice and co-producing care plans.

Thanks, Jason. Mark, do you want to come back in?

Thank you, Chair. So, we heard from some earlier witnesses that there may be some people who are confident in their current relationship with their local authority, know the package of care for which they've taken responsibility and who may be nervous about moving to a new regime, but where their willingness to undertake direct payments for continuing healthcare would be strengthened if the Bill provided them with the right to return to their previous local authority arrangements. They're nervous about taking a shot in the dark, as it may seem to them, without the safety net of knowing that, if it doesn't work out, then they can revert to the arrangements that are currently working well for them. Do you think it would be sensible for the committee to support that idea of a right to return to their current arrangements if taking on more responsibility turned out to be not right for them?

Andrew's about to talk, so Andrew first, and then Jason, if you don't mind.

I think it's getting the balance right. My initial response to that would be, 'Probably, it should be', if the package simply doesn't work for them and they do need to revert back, but I think that there needs to be a series of stages to understand what is the issue with the direct payment—so, is it that they feel they need further support from the local authority, or from the health board, around how that's implemented and having a better understanding? I think, probably, rather than having a blanket, 'Anybody can come back to local authorities if they so wished', having an understanding that, if everything has been provided and it's not right for that person anymore, that package is beyond them to manage it, they're experiencing difficulties, I would think that there should be right to come back to local authorities, yes. 

Andrew, thank you. Jason and Zoe. Jason.

Okay. I might just offer a slightly different perspective to Andrew. It will depend on the person's needs. If they've become health needs, section 47 of the Social Services and Well-being (Wales) Act 2014 will prevent a local authority from providing that support. So, if that person's needs have deteriorated and become even more complex, we wouldn't be able to guarantee a return. That doesn't mean we shouldn't work collectively, together, to find out what's gone wrong in terms of the family feeling it's not working and the person feeling it's not working and explore alternative pathways to providing that care. But it's not as simple as saying, 'If you're in NHS care, you could move back to local authority', because you have to be eligible, and, if you're eligible for CHC, by definition, you become non-eligible for local government services. 

Thanks, Jason. Zoe.

Yes, so, I echo what Jason was—. I was just going to say that, currently, if you receive a direct payment, and you have the support that you require—and even if you need additional support, that is provided—if you then decide that, actually, it's too much and you don't want the responsibility of a direct payment, absolutely you can go back to your local authority and have a directly provided provision. I think, as Jason has said, it's slightly different if somebody has a direct payment for continuing healthcare, because, if they don't want their direct payment responsibility for that, it's not an automatic return to local authority, because of their diagnosis. However, I think it would need to be explored as to why they didn't want their direct payment any longer, and, where possible, additional support is provided.

Thanks, Zoe. Mark.

The last point from me, Chair, and maybe this is more for colleagues to come back to towards the end of the session. Local authorities have had 20 years or more of experience now of direct payments. Health boards are going to be taking this on for the very first time. I think it's been very useful already to hear from you about some of the lessons you think you can draw from your experience that would help health boards to make the best possible fist of these new responsibilities, and, as the discussion goes on, I think it would be good for us to hear a bit more of that, because I think that's one of the things we will be able to contribute to the debate, drawing on your experience.

Yes, thanks, Mark. Perhaps we'll touch on those points, as you say, as we carry on going through, unless anybody wants to raise anything particularly right now on that. No—[Interruption.] Oh, sorry, go on, Jason.

I think that 20 years' experience—. And I suppose, the offer from local government is that we do this in partnership with health boards. I wouldn't want to see health boards setting up new direct payments teams, new direct payments services, when we already have them, and most of our work in Wales is about integrating health and social care. This is one area where we could really do that. We have the infrastructure. What we'd need is support from the clinical governance point of view, but tapping into local government infrastructure, and doing it once in an area. That gives the continuity of care for the individual, because they're not dealing with new direct payment support, they're just having a change of care co-ordination and governance. But it would keep it as seamless as possible, and keep the spirit of integrated working. So, that would be an appeal from me. We think of Part 9 of the social services and well-being Act—pooled funds, integration—and this is a space we could do that together.

Thanks, Jason. Andrew, briefly.

Could I just make one brief point? If there was a move with the health boards towards direct payments, it just needs to make sure that one of the problems, for example, local authorities have right now—and it'd be remiss for me not to say—is actually getting health boards to buy in to their joint responsibility. There are situations right now in Wales where some local authorities, even where it's been agreed for joint funding, local authorities are owed millions and millions of pounds from the health boards, which haven't paid, even where there are agreements. The other situation is that, in some cases, it takes a very long time to get agreement for continuing healthcare packages, and sometimes local authorities end up stepping in in the interim, or in the intervening period, to help that person with their particular personal situation and it is very, very difficult sometimes for local authorities then to get the agreement to actually move that care package over from the local authority to the health board, either jointly, to be jointly funded, or, in some cases, they should be simply for the health board. So, I think just making sure that transition and that process is improved and smartened, I think would be something that everybody would welcome, because it is a concern that you could have some in the future who should go on to continuing healthcare payments, direct payments, but actually they'll be stuck waiting for a transition and, to be honest with you, sometimes local authorities and health boards are arguing over who should pay. 

Thanks, Andrew. Absolutely right to raise that. Before I bring Joyce in with some points and questions, Mabon wanted to come in briefly as well. 

Could I just say—? There may be others on the call better placed to answer than me, but my understanding is it is based on the element of how much is care and potentially how much is nursing, and there's agreement, isn't there, between health boards and local authorities in terms of the contribution element. So, it does depend, actually, what the actual direct payments and the continuing healthcare plan actually are for. I think that is right, but others may be better placed to answer than myself.

Anyone like to respond further? Jason, and then we'll—[Interruption.] After Jason we'll move to Joyce. Sorry, thanks, Jason.

Yes, it is true that in some places there will be a commissioned care provider that will have a different rate from the health board than they will from a local authority. That happens in nursing homes as well as in domiciliary care, because they're on a different framework. What I suppose we would hope with direct payments, if we were to do it together, is we have an agreed rate for a PA. That would be our appeal, I suppose, if we do it together. Because, currently, it doesn't feel fair that somebody can be paid less money for providing continuing healthcare as a as a domiciliary care agency than you are for a local government funded, just because the contracts are negotiated at different time in a different way. 

Thanks, Jason. Briefly, Zoe, and then I'll bring Joyce in. Go on. 

Yes, I was just going to say that, actually, it's probably likely to be the other way around, that that the health board are likely to pay a higher rate. Currently, carers in social care are paid lower than healthcare workers. But, echoing everybody else, it's definitely something that would need to be worked on at the next stage to get some continuity and consistency across Wales of what rates we would pay.

Okay, thanks, Zoe. Joyce Watson, can I bring you in on a series of questions?

Good afternoon. I'm going to talk about some of those issues and complexities between what is healthcare and what is social care, and there seem to be views that local authorities are having to fund more complex care packages, because the bar has been raised as to what would, they would hope, be considered healthcare. So, I'd like you to talk us through that and, of course, within that, there'll be some gate-keeping practices that you've also mentioned. So, if you could give us some understanding of exactly what that means in reality.

Would anyone like to come back on that? Jason, yes.