What action is the Welsh Government taking to ensure large international organizations are not circumventing the intention of the ‘Eliminating profit from the care of children looked after’ legislation by opening not-for-profit arms of their organization and consequently charging large amounts for back-office support from for-profit parts of their organization?
The Health and Social Care (Wales) Bill (“The Bill”) imposes new requirements regarding financial arrangements of non-local authority service providers relating to the provision of children’s homes, fostering services and secure accommodation services. Specifically the Bill will provide that unreasonable or disproportionate payments entered into by a not-for-profit entity can be taken into account by Welsh Ministers when deciding if a provider is a fit and proper person to be registered. In essence this is intended to ensure that any payments being made by a provider do not undermine the pursuit of its objects or purposes set out in the new section 6A(3) of the 2016 Act inserted into the Bill. New section 6A(3) requires a person who wants to provide a restricted children’s service to adopt objects or purposes which primarily relate to:
(a) the welfare of children, or
(b) such other public good as the Welsh Ministers (by Regulations) may prescribe.
Care Inspectorate Wales (acting on behalf of Welsh Ministers) will in future be able to require information about particular transactions or financial arrangements from not-for-profit providers of children’s homes, fostering services and secure accommodation services in order to police this requirement. Officials are considering what guidance is required for providers regarding the provisions relating to unreasonable or disproportionate payments. This could include guidance around payments between different constituent parts of their organisation operating in different countries.