Deregulation Bill

Baroness Donaghy Excerpts

Tuesday 18th November 2014 Grand Committee

Debate on whether Clause 71 should stand part of the Bill.

[Baroness Donaghy (Lab)]

My Lords, I am asking the Government to withdraw Clause 71 on social work services and registration. Clearly there is a history to this which I shall not spend a lot of time on, but I have to say a couple of things about it. First, the previous Labour Government issued a guarantee in 2008 that any delegated service would be required to register with the regulator. The Government propose to withdraw that provision. Secondly, in June last year the Delegated Powers and Regulatory Reform Committee criticised the Government’s proposals to remove regulation of social work providers. It said:

“Registration would allow the imposition of national minimum standards and requirements as to the fitness of providers. It would also provide a mechanism for removing providers who are failing to meet standards”.

The Government subsequently retained separate registration but not inspection for external providers through the Providers of Social Work Services (England) Regulations 2013. The discussions are as recent as that. Now the Government are seeking to reverse that decision and to remove the registration requirement. This is despite the fact that there was no clear support for removing regulation in the original consultation responses.

The Government did not consult on this issue as part of the consultation in April 2014 on extending outsourcing in children’s social work. During the debate in Committee in the House of Commons on whether the clause should stand part of the Bill, the Deputy Leader of the Commons, Tom Brake MP, acknowledged that there had been no clear support for removing the registration requirement.

The Office of the Children’s Commissioner for England raised concerns and stated:

“We consider all delegated social care services should be required to have formal registration with Ofsted in addition to an expectation that they will be held to account by rigorous and expert inspection, just as local authorities currently are”.

Ofsted conducted its own consultation on a regulation and inspection regime for social work providers. It consulted children and young people for their views, unlike the Government. Ofsted found that respondents to its consultation wanted thorough checks to be made on companies and applicants that plan to provide delegated functions. They also felt strongly that registration checks should be backed up by later inspection.

Local authorities thought it would be,

“important to ensure there is a proper, external-to-the-local-authority registration process to enable a local authority to be confident in using the services provided by the social work provider”.

I should, perhaps, remind the Committee that the Ofsted registration requirements cover important areas of social work provision, such as the “fit and proper person” test for those running social work providers, financial viability, registered manager, sufficiency of qualified staff, vetting checks and conditions of registration.

The Government propose that the external providers of social work services will not be inspected in their own right by Ofsted, and nor will they be registered as providers in the way that children’s homes and adoption societies are. There will be no overview of their activities across local authorities where they hold contracts and no visible assurances for the public about their financial viability, quality standards or working practices. Unison, the trade union that represents social workers, believes that the regulation and inspection of social care services are essential to safeguarding vulnerable children and their families. It also said that regulations should not be regarded as a burden in this extremely sensitive area.

Internal contract monitoring by local authorities cannot be relied on by itself to ensure that acceptable standards in the safety and quality of social work with looked-after children are upheld. By removing the separate registration of providers, the Government are relying on Ofsted to pick out issues about their fitness to operate as part of its inspections of individual local authorities. However, providers could operate across many local authority areas. Local authorities already face challenges because of funding cuts and it is likely that contracts will be held by larger private or voluntary sector contractors. Close ties with local authority teams and systems will be weakened; their interests and priorities will be different from those of the client authority. The drivers of service provision will be cost driven. Relying on local authority inspection will be inadequate and emphasises the need for a single registration point.

The focus of the single inspection framework is the local authority, and this will necessarily limit the range of regulatory action Ofsted takes in relation to the failings of an outsourced provider. Ofsted needs to be able to focus on the provider in its own right, rather than on individual local areas of work. It also creates a lack of symmetry in the system by requiring providers of children’s homes and fostering and adoption placements to be registered and inspected in their own right while providers of social work services—which are exercising major statutory functions, taking sensitive and critical decisions about placements for children—are not required to do so. How can the Government defend such inequality? Do the Government think that providing social work services is somehow less important? Are the Government confident that this act of abandonment will not lead to a lowering of standards?

Finally, the College of Social Work is calling on the Government to pause, so that the service implications of these regulatory changes can be fully considered in the light of real evidence. There needs to be detailed consideration of potential conflict of interest in the provision of children’s services and the management of risk. The College of Social Work has stated:

“The proposals raise serious and important questions about how services to some of the nation’s most vulnerable children and young people may be delivered in future”.

I can only echo that statement and ask the Government to withdraw Clause 71 before it is tested on Report.

[Baroness Meacher (CB)]

My Lords, I support the noble Baroness, Lady Donaghy, and agree that Clause 71 should not stand part of the Bill. Among the main reasons for my position is, first, that the delegation of local authority statutory children’s services functions, particularly child protection functions, was approved only very recently, and we simply have not had the time to clarify whether the new arrangements are working. Secondly, the delegation of these functions was approved by statutory instrument, and therefore not subjected to very thorough parliamentary scrutiny—we already have, if you like, an unscrutinised situation, or one subject to inadequate scrutiny, yet these functions are crucial to the future lives of very vulnerable children.

It was presumably no accident that these statutory functions were not included in the Children and Young Persons Act 2008, which provided for the delegation of functions in relation to looked-after children and those leaving care. Those are very sensitive areas of work, and one can question their delegation, but these new functions were not included even then. I should make it clear that, along with members of the College of Social Work, I support the provision of children’s and adult services by the third sector in partnership with the statutory agencies—this is not an ideological point at all—but as recent scandals have shown, the third sector is not immune from providing very poor-quality services to very vulnerable people. It is this risk that needs to be guarded against in equal measure— I emphasise equal measure—with public services. I sometimes worry that the Government assume that any private service is somehow good, while public services are suspect. That seems to me to be an incredibly dangerous assumption.

I share the concern of the noble Baroness about the limited parliamentary debate about the new regulations and, more particularly, the concern that the removal of the one safeguard from these functions is proposed when the evidence for the efficacy or otherwise of these delegated services is not yet available. Will the Minister explain to the Committee why the Government are proposing to remove the requirement to register with the inspectorate from these newly delegated services? Is this a matter of cost? If so, what will be the annual saving to the Exchequer from this change? Has a cost-benefit analysis been done of Clause 71? Is there any evidence to suggest that the proposal will not lead to a deterioration in the quality of service provided? These really are very important questions for the Government to answer.

It would also be helpful to have some explanation about how the local authority responsibility for these delegated services will work. As I understand it, local authorities will remain accountable to the regulators for the quality of the delegated services, but they will surely need to undertake some form of inspection role in order to satisfy themselves that the services are of an acceptable quality. But will they be funded to do that? We know how hard-pressed local authorities are; if they do not have the funding for a job, they will certainly not be able to do it. If not, is it right that a local authority should be held responsible for poor-quality services that do not fall within its purview? It all feels really very difficult from the local authority point of view and therefore the whole thing feels shaky. Who is going to lose? The vulnerable children, at the end of the day. I hope the Minister will respond to these questions and provide some assurance to the Committee that the Government are not taking unreasonable risks in Clause 71.

--- Later in debate ---

[Lord Wallace of Saltaire]

My Lords, I recognise the passion with which these objections have been made, as well as the experience and expertise of those who made them. I shall be very happy to hold further conversations between Committee and Report to make sure that we can come to some agreement about the balance between regulation and potential risk, to which the noble Baroness, Lady King, rightly pointed. We are all quite clear that children’s services are a very important area where we must make sure that we get the balance right.

The Government’s view after consultation and consideration is that the double layer of inspection provided by Ofsted’s national perspective and the responsibility of local authorities to inspect and to license providers is duplication. Our view is that Ofsted’s existing duty to register providers who may discharge children’s social care functions is completely separate from its duty to inspect and to hold local authorities to account in the discharge of their functions.

I am also very grateful for the correct comment of the noble Baroness, Lady Meacher, that we are talking not just about for-profit providers but about third sector providers, which often provide very good services in this area. Nevertheless, one wants to make sure that those services are always of a consistent quality. She has a great deal of experience in this area. I have very limited experience but I am very conscious that third sector organisations can be absolutely superb but sometimes not superb.

It is argued that the removal of the requirement for providers to register with Ofsted is a benefit to the system because it ensures that there is no doubt or confusion about where the statutory responsibilities then lie. That makes it clear that local authorities are fully accountable for any decisions made by third parties to whom they have delegated functions. The argument here is that it should not be the responsibility of Ofsted to make sure that the third parties to whom local authorities wish to delegate functions are fit for the job.

Under the current registration regulations, Ofsted is required to check on: first, the fitness of the provider to do the work; secondly, the appointment and fitness of the registered manager; and, thirdly, the staffing arrangements and premises. The regulations also include provisions for making changes to any of the above. To cover Ofsted’s costs, providers are required to pay fees for registration and for making changes to the registration once made.

These requirements duplicate the “due diligence” that a local authority will perform as part of its procurement of a provider. No local authority would appoint a third party provider to undertake its functions without making such checks. However, the current system creates confusion as to where accountability lies. The requirement for providers to register with Ofsted is separate from Ofsted’s continuing duty to inspect and to hold local authorities to account. How Ofsted inspects local authorities is for it to determine. For other provision—as for children’s homes—it conducts separate inspections, but it has concluded that delegated functions should be inspected as part of the local authority single framework inspection and has published a plan as to how this will operate. The Government consider that that is adequate and that it provides the regulation required without unacceptable risk.

[Baroness Donaghy]

I apologise to the noble Lord for interrupting but I wish to seek clarification. Clearly, on the face of it, it does look like double accounting, but similar things exist in other areas—for instance, in the construction industry, where there is a pre-qualification system. At the moment local authorities are given confidence in employing a company which might cover a lot of local authorities. There might be a very small strapped-for-cash local authority—as nearly all of them are now—but it is given confidence because the name of that company is on a register. It has already qualified to meet a certain level of standards. I am not sure that in the Minister’s answer so far—he may be coming to it—he has explained how local authorities have the confidence to get to the pre-qualification stage of saying, “Okay, let’s look at these people with a view to hiring them”. I am not saying that they do not have the responsibility to inspect—of course not—but it could save a lot of time and money if there is already in existence a body of knowledge and a body of standards which local authorities can apply.

[Lord Wallace of Saltaire]

I understand that point. I am not entirely clear as to the balance between for-profit providers and not-for-profit providers but I am getting some information from my officials. There are some important distinctions here, which I would like to take back and discuss further with them because I recognise that it is absolutely important that we get this right. The Government’s case is that the clause provides the necessary protections without unnecessary duplication. I recognise that we need to provide the reassurance to all those who have spoken in this debate that we have got the balance right.

Incidentally, we did consult in January and February 2013 and got only some 20 responses, which broke on both sides. There were mixed opinions as to whether the registration regime should be removed; 45% said no and 40% yes. A majority agreed that the proposal would reduce burdens; 53% said yes and 32% no. So the answer is that it did not give us a clear set of arguments as to how to respond.

Again, I recognise the great concerns which have been put forward. The Government have argued consistently that removing this extra level of the registration regime preserves necessary protections. I am very happy to have further discussions between Committee and Report to make sure that we can provide those assurances before we return to this.