Children’s Wellbeing and Schools Bill

Baroness Bennett of Manor Castle Excerpts

Tuesday 17th June 2025 Lords Chamber

[Baroness Tyler of Enfield (LD)]

My Lords, I rise to speak to Amendment 140, in my name, and I thank my noble friend Lord Storey for adding his. It would extend the scope of Clause 14 to cover independent providers of supported accommodation. This is a really important group of amendments: the whole area of financial oversight and profit caps is incredibly important, and I suspect we are not all going to have exactly the same views on it.

To put things into context, I welcome the raft of measures in the Bill to strengthen regulation and oversight of the care system, particularly the new provider oversight measures, Ofsted’s new power to fine providers of unregistered children’s homes, the financial oversight mechanism, and the profit cap. I firmly believe that these measures are welcome steps in the right direction in addressing some of the structural problems facing the care system and the sort of issues we have talked about so often in this Chamber: excessively high profit levels and rising care costs, at a time when local authorities are under huge financial pressure; the power imbalance between local authority commissioners and the largest private providers; the risk of sudden market exits due to high debt burdens from private equity-backed providers; and the growth in unregistered children’s homes, which we have already rightly focused on. That is a pretty toxic mix, and we really have to take the opportunity the Bill provides to do something about it.

That is the big picture, but turning briefly to my amendment, as we have already heard, in the last six years there has been a very significant rise in the number of children in care aged 16 and 17 who are living in supported accommodation. It is important to be clear what we mean by supported accommodation. It is for young people, 16 and 17 year-olds, who may have already started to make some sort of transition to more independent living but who still require a fair degree of support. Many supported accommodation settings, such as children’s homes and foster homes, are run by private companies, many of which are very large. Local authorities currently have no way of knowing the debt level being carried by these large private companies and whether there is any risk of the company or provider failing financially—which, of course, could have drastic implications for the children living in these settings. So, given the significant and growing number of children living in supported accommodation, it is important that the new financial oversight measures in Clause 14 are extended to independent providers of supported accommodation as well as providers of children’s homes and fostering agencies. My amendment would achieve this, and in so doing would provide a consistent approach across the different care settings and a safeguard for local authorities, so they can identify and mitigate the risk of providers suddenly closing multiple supported accommodation settings.

Finally, nine times out of 10, the noble Baroness, Lady Bennett, and I agree on pretty much everything. We often support each other’s amendments and speak in the same debates, but I do not quite share her position on removing the profit motive altogether from children’s social care. Far more needs to be done to regulate it, but there is a place for the private sector in the children’s social care market; it just has to be properly regulated.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Tyler—whether I agree with her or not. I note the phrase that she used, “toxic mix”.

I think there has been broad agreement around the Chamber, including on the Government Benches, that we have a huge problem. The Minister said on one of the earlier groups that the market has prevent local authorities meeting their duties. Here, I would stress the phrase “the market”. What I am postulating is that “the market” is not the appropriate way to ensure that we have the right care in the right places with the right services—and that is a statement of a Green Party philosophical position. We do not believe that profit should be made from any form of care.

In this case, that is also very clear from what people have been saying. The Minister also said on one of the earlier groups that the current market has driven us to this, and the noble Lord, Lord Russell, said that the market is clearly not working. So, yes, it is my ideological position, but I have an overwhelming argument here for saying that the market is just the wrong model for providing this sort of care for vulnerable young people and children.

My Amendment 174 proposes a new clause that would prohibit the delivery of children’s social care services by for-profit companies. It has two very simple provisions, the first being that any new institutions created under the Bill should be not for profit. It says that within five years of the Bill being passed, what is now for profit would be converted. As the noble Baroness, Lady Sanderson, rightly said, this follows the model of what has already happened in Wales. I acknowledge that Wales is smaller than England, but none the less Wales has shown the way. It is worth looking at why Wales went that way.

--- Later in debate ---

[Lord Nash (Con)]

Transparency is a good start. I think it is the case, and I know there are vastly different prices charged around the country, perhaps for different reasons, property prices or whatever; but I think transparency is key. I agree with the noble Lord, Lord Addington: I think that trying to interfere in markets is generally dangerous and you generally have unintended consequences. Everybody knows that I am a career venture-capital private-equity guy, but I do know that these assets are completely out of favour.

There are a number of groups that have these assets and cannot sell them, and we are just going to run out of money, so I think the Government need to be very careful. I say that as somebody who is very concerned about this sector, and that is why I am here. I do not have any magic solutions, but I think that, if people are threatened with fines, who is going to want to run these homes? Individuals. It is something that needs to be thought about very carefully.

[Baroness Bennett of Manor Castle (GP)]

The noble Lord has just essentially agreed with what I said, that some of these entities are financially unstable and uncertain. Would the noble Lord understand, at least, the argument that it is better to bring these back? These facilities are going to have to stay open: we need them. It is better to bring them back into non-profit hands in an orderly manner rather than, if one of these private equity companies goes down, having an immediate crisis. What do the Government do then?

[Lord Nash (Con)]

The care sector is slightly different, for the reasons people have mentioned. But what are we going to do—nationalise it for nothing? Are we going to become a communist country? Are we going to pay for it, and if so, where will that money come from? Anyway, even if you deal with the ownership issue—obviously, I do not agree with the idea of nationalisation—threatening people who operate them with fines just does not seem reasonable. That is why I support the amendments on limiting fines and not applying them to natural persons, as opposed to corporations.