Question to the Department for Education:

To ask the Secretary of State for Education, with reference to her statement of 18 November 2024 on Children’s Social Care, Official Report column 25, at what level she plans to cap profit from children’s social care placements.

As at 31 March 2024, there were 83,630 looked after children, which was similar to the previous year. The government has announced the following measures to ensure there are more of the right placements to meet the needs of looked after children:

• £44 million investment to support children in kinship care and foster care. This includes trialling a new kinship allowance in up to ten local authorities and ensuring that every local authority has access to a regional recruitment hub.
• £90 million to maintain capacity and expand provision in secure and open residential children’s homes. This will include creating 200 additional open children’s homes beds. This will provide safe and suitable homes for some of our vulnerable children and young people.

Building on this investment in kinship, fostering and children’s homes, this government will go further to reform the children's social care system by helping children to stay with their families where possible, fixing the broken care market, and investing in key enablers which underpin the system.

As the suite of reforms are developed, we will assess the impact for children, the social care system (including care places and workforce pressures) and the value for money of our reforms. Impact assessments will be published at the point of introducing proposals, subject to parliamentary procedure and time.

The level of any future cap on the profits of children’s social care placement providers would depend on a number of factors, including market conditions at the point it was introduced. Before introducing any such cap we would consult fully, including with providers and local authorities.

On the quality of children’s homes and inspection, the department is working hard to improve the quality of this provision through numerous avenues. We will seek to strengthen Ofsted’s powers to hold provider group owners of children’s homes and other children’s social care provision to account where there are quality issues across several settings owned by a group. This will help to resolve issues quickly and ensure the quality of children’s placements.

The department is also working closely with Ofsted as they revise both their Social Care Common Inspection Framework (SCCIF) and Inspecting Local Authority Children’s Services framework in response to the Big Listen. We welcome their focus on ensuring that inspections are a constructive force in the sector that champion good practice, empower leaders and also that the progress and experiences of children are at the heart of inspection.

Additionally, the department is working with Social Work England to scope and develop options for establishing professional registration for children’s homes managers and staff. This has the potential to raise the status and profile of working in the sector and improve the quality of provision by providing greater oversight of those working in the sector. We are confident that the ongoing work on provider oversight, updates to the SCCIF and development the workforce will result in significant improvements to the quality of children’s homes and inspection processes.

There are no plans to increase the frequency of inspections this year. Children’s homes normally receive a full inspection at least once annually and if leaders and managers have shown that they can consistently deliver services for children well, it may be appropriate to return less often or do a more proportionate inspection. However, Ofsted always takes into account the risk to children of not inspecting as frequently.