Children’s Social Care

Baroness Thornton Excerpts

Tuesday 19th November 2024 Lords Chamber

[Baroness Smith of Malvern (Lab)]

I welcome the noble Lord’s welcome for this work. I agree with the point that has just been made that it is important that we work closely with partners across local government to address this. The noble Lord is right that more detail will be set out in the local government settlement, but it is not for me to decide whether there will be a debate. However, I assure the noble Lord that, if there is one and if I am called on, I will be more than happy to come and give more detail on how the spending will help to support progress on the objectives that we have set as quickly as possible, as he rightly says.

The problem of how far children live from their homes—I think over 20% of children live more than 20 miles away from their home authority—has been around for a very long time. That is not a reason not to take quick action; the noble Lord is right. This will be difficult, but we are absolutely determined to make progress.

[Baroness Thornton (Lab)]

My Lords, the Competition and Markets Authority concluded in a recent report:

“The UK has sleepwalked into a dysfunctional children’s social care market”.


That is on the Benches opposite. I raised this as a question a few weeks ago, when my noble friend the Minister agreed to have a conversation about the diversity of suppliers that are needed in this sector: social enterprises, charities and community-based businesses. I look forward to that discussion being helpful in this process.

However, it seems to me that the challenge that the Government and local authorities will face is how to transition away from companies making excess profits in a dysfunctional market to local government getting cost-effective, proper suppliers in this marketplace. One of the reasons that local authorities have been trapped in the profit gouging is their legal imperative to provide care for some of our most difficult children. How do the Government intend to bring about that transition to make sure that no children find themselves with no care at all?

[Baroness Smith of Malvern (Lab)]

My noble friend makes an important point. She is absolutely right that we are seeing profiteering in this market. The Competition and Markets Authority found profit levels of nearly 23% for the 15 largest providers of children’s homes. There is good provision in the private sector and there will still need to be private sector provision as we develop, but a 23% profit level is not appropriate competition.

The first solution, as my noble friend said, is to increase the supply of placements—this is where the £90 million is important—and we can use local authorities, the voluntary and charitable sector and ethical investors to do that. That has to be the first step. In making this Statement, my right honourable friend has also made it clear that we will not stand by if that message and action do not provide the necessary placements and we continue to see the profiteering that is breaking the banks of local authorities, when it comes to providing the care that children need. We will take action on that profiteering, if necessary, and we will have the legislative ability to do it in the children’s well-being Bill.