Children’s Wellbeing and Schools Bill

Baroness Thornton Excerpts

Tuesday 17th June 2025 Lords Chamber

I am happy to argue about whether five years is exactly the right time period. I am not wedded to any of the detail in the amendment, but I ask noble Lords to listen to the children.

[Baroness Thornton (Lab)]

My Lords, in many ways the test of the Government’s success in reforming public services will be whether we can crack the tough nut of children’s social care. It has been quite clear from the debates on the last three groups that this is a major challenge. I declare my interests as the founding chair of Social Enterprise UK, and I am on the social economy APPG. I am an associate of Social Business International and, for the past 10 years or so, I have been working with leaders of social enterprises that provide public services.

I might have preferred to have made this speech in the earlier debate, at the beginning of the afternoon, but I am afraid I could not make it here in time for its opening. However, this is an appropriate group because we are talking essentially about procurement and finance.

As the noble Lord said earlier, I think it was in the previous debate, the Independent Review of Children’s Social Care, led by Josh MacAlister, described how the current system leads to unacceptable, poor outcomes for children and rising costs—private equity was referred to by the noble Baroness. It found that care packages are dictated by the market, not by children’s needs. Excessive profiteering has minimised resources and created public disgust. His central recommendation was for government to launch a reform programme, a radical reset to fix the broken care market, which has failed our most vulnerable children.

While I absolutely welcome the Government’s spending review commitments to fund family help, capital for residential care and fostering and other reforms linked to the MacAlister review, I feel that you cannot throw money at children’s social care and expect things to get better unless we actually also change. I want to see commissioners lever the well-evidenced voluntary sector, social enterprise and other forms of care to have a diverse marketplace in children’s social care.

At Second Reading I mentioned the wonderful Juno community interest company in Liverpool, Social AdVentures in Manchester and the Lighthouse Pedagogy Trust in London. All are boosting the life chances of our most vulnerable young people, and all exist for public service and benefit. They are efficient, entrepreneurial, transparent and accountable. They are sustainable and plough their profits into their social mission, often providing preventive and complementary services.

These organisations win tenders in open procurement processes yet are exceptions in a system that incentivises what you might call “social washing”—let me explain. Commissioners plan and design services to meet local needs and must consider social value when choosing providers, a concept brought into law by the social value Act, which I was very pleased indeed to help get on to the statute book, along with other noble Lords.

Scoring bids for social value means that public bodies consider and try to measure public and community benefits alongside value for money when they procure services we depend on, but in practice the system can be gamed or the process inadvertently rigged. Bidders promise outputs that they will never attain and do not achieve, and are barely held accountable.

Many commissioners know that social enterprises, co-operatives, mutuals, leisure trusts, employee-owned businesses, charities and trading charities deliver high-quality public services that meet community needs, and many have long wanted them to take a bigger role in public services. This chimes with the public’s view too.

The recent Procurement Act gave commissioners new tools and flexibilities and came into force in February this year after Cabinet Office Minister Georgia Gould introduced the national procurement policy and the social value procurement notice, which referenced the role of these kinds of organisations and the idea of codesigning with communities. There is no point in having the best regulation—which I am very proud of—if we do not use it and the opportunities it gives us. Commissioners can collaborate with social enterprise providers, charities and other businesses. Procurement regulations should be an enabler, not a barrier.

What in the Bill will allow this real change to take place? Do we need to strengthen the Bill in some ways to allow these redesigns to happen? In the earlier debate, I was very struck by the question of planning and so on—because of course it is the whole system that needs to be thought of. Might my noble friend the Minister organise a round table where we could address the new role of procurement to bring about the change we need in this particular marketplace before we reach Report?

[Baroness O’Neill of Bexley (Con)]

My Lords, I would like to support my noble friend Lady Sanderson of Welton on Amendment 134A. Noble Lords will not be surprised to know I shall be championing local authorities around the cost of children’s homes.

I want to give noble Lords a bit of a reality check, and to do so I am going to reference two examples. The first is about supported living for care leavers aged 21 to 25. They are nearly adults, need very little support and are very nearly independent. A semi-detached house is created that can take up to five young people with very little supervision. The cost for one young person in that provision is actually £500 per week. That is nearly as much as any landlord would get to rent out that property for a month: £2,000 a month. If you have got five young people in there, that is one hell of a profit margin. You can see why people go down that route and why we are having to grapple with the costs.

The second case is about a property that had been sought and used as secure accommodation with 24/7 support. It was another council that placed it in our borough. It was worth it getting the property and having 24/7 support for secure accommodation. Obviously, it had made the decision that either it could not afford to get that accommodation through normal routes or that this was good value. We first knew about it when we read police reports saying this young person, who is in 24/7 secure accommodation with two people, had gone missing. I was jumping up and down saying, “We’ve got a young child gone missing”. But it was not our child—we did not even know this young person was in our borough. That is expensive accommodation.

Earlier on, the noble and learned Baroness, Lady Butler-Sloss, said that you would know if people were placed in your borough—but you do not. I am sure the Minister will have something to say about that. In addition to the knowledge that this young person is placed in your borough, the cost of 24/7 care and accommodation for one person in your borough is phenomenal. Local authorities are not perfect, but we are grappling with some of these things on a daily basis, which push the costs up, and some of this transparency might deal with it. I look forward to the Minister’s response.

--- Later in debate ---

[Lord Nash (Con)]

My Lords, I rise to support Amendment 134A, tabled by the noble Baroness, Lady Sanderson. I also believe that the transparency of prices should extend to the SEND sector. I agree we need responsible, not highly leveraged, private investment. I understand why the Government are bringing forward these provisions of a profits cap and monetary penalties, because, of course, none of us wants cowboys looking after our children. What worries me, however, is that these kinds of assets are already very out of favour in the private equity sector, which is struggling to sell the assets it has. The provision of the profit cap and monetary penalties or fines is just going to drive capacity out of the sector, and I really am worried about this. Who is going to replace the inevitable lack of capacity that I am sure will result as a consequence of these provisions?

In an ideal world, of course, many of us would like all provision for these kinds of children to be run by charities or the public sector, although some public sector operators have had their own problems. We do not, however, live in an ideal world; the public sector has no money, and charities are struggling to raise money. Most of the private equity operators are highly professional operators, very concerned about their reputation and safety and the quality of their provision, and we need to encourage them. Otherwise, we will have—and I predict this will lead to—a massive shortage of capacity as a result of fines and caps. I am, however, all for full transparency.

[Baroness Thornton (Lab)]

How does the noble Lord feel that we need to make the transition to the kind of system that we want, if he is so worried about the reduction in capacity? How do you deal with the profit gouging that has gone on? If you sort of say you do not have profit gouging, what happens when the suppliers walk away?

[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.