Plans to ban profit from the care of looked-after children could lead to a lack of choice, less investment and the loss of hundreds of placements, a committee heard.
Private providers gave evidence to the Senedd’s health committee about the Welsh Government’s plans to “eliminate” profit from the children’s social care sector.
Darryl Williams, who founded start Woodlands Ltd, a care provider in Wrexham, 25 years ago, warned of dire consequences from the proposed reforms.
“I don’t wish to sound dramatic but if we don’t change course, we’re going to sleepwalk into the biggest disaster for vulnerable children in Wales since the Second World War,” he said.
Mr Williams said the narrative about “giving the fat cats a bloody nose” does not fit the reality that many homes are run by husband-and-wife teams who want to do their best for children.
‘Inflammatory’
Mr Williams told the committee he was motivated to start the business by his experiences as a former team manager in Flintshire social services.
“I was tired of putting young people in less-than-average placements,” he said.
Criticising “inflammatory” language such as “eliminating profit”, Mr Williams stressed he founded the business not for financial gain but to improve outcomes for children.
He told MSs: “There’s nothing wrong with the ‘p’ word – we have to make a profit to invest.”
Harvey Gallagher, chief executive of the Nationwide Association of Fostering Providers, similarly dismissed any notion that profit equals poor quality and value for money.
He said independent providers provide specialist care for children and young people with complex needs, which councils are often unable to meet.
‘Misunderstood’
Jen Robbins, of the Children’s Homes Association (CHA), warned 885 beds could be lost in a worst-case scenario, leaving the public purse with a £550m bill to replace services.
Ms Robbins, head of policy, said a Competition and Markets Authority report on children’s social care recommended neither banning nor capping profit.
She told committee members: “It comes back to the point about profit versus profiteering, which I think is largely misunderstood.”
Criticising the Welsh Government’s “blanket” approach to eliminating profit, she said CHA members must ultimately be owned in the UK and not receive money from tax havens.
Warning of unintended consequences, Ms Robbins added: “This is not evidence-based policy making in any form – I’ve never seen anything like this, it is purely ideological.”
‘Disillusioned’
Sharon Cavaliere, director of Calon Cymru, a specialist fostering agency, who was a social worker for 26 years, similarly said she felt disillusioned while working for the council.
“I wasn’t seeing great outcomes for children and young people,” she said.
Raising concerns the health and social care bill would diminish choice, Ms Cavaliere told the committee that providers absorb high costs to sustain placements and achieve outcomes.
She said: “There’s going to be a lack of investment back into these agencies on the back of this bill, that’s a huge concern for me.”
She warned councils are not able to provide the same calibre of care: “We’re throwing money into child foster placements, not because it’s about greed – it’s about a child’s life.”
‘£1 billion’
Mark Drakeford, who laid the foundations for the bill while Wales’ first minister, asked why care for children should be left to market forces.
The Cardiff West MS said the CMA study found a standard profit of more than £900 a week for each child in residential care.
He asked: “Is it defensible that public money leaks out of the system at that rate?”
In a previous evidence session, Dawn Bowden, who is in charge of the bill, said the cost to councils of looked after children rose 200% to nearly £200m over the past decade.
The social care minister said 20 to 25% is extracted as private profit and if Wales continues on the trajectory the costs would approach £1bn within another 10 years.
‘Vitriol’
Deborah Judge, clinical director of Birribi, which offers residential care in west Wales, accused the Welsh Government of “stirring up vitriol” over the past two years.
Dr Judge, a child and adolescent psychiatrist who worked in the NHS for 25 years, warned that children and young people are already being impacted by “turmoil” in the sector.
“It’s created such disruption already to the sector and it’s so sad,” she said, adding that children have become “collateral damage”.
Dr Judge raised concerns about misinformation, with figures and “extremist” language being “thrown around”, saying Birribi makes £165 a week per child..
She said: “I’m a child psychiatrist, I’m a doctor, I never went into this to be talking about the amount of profit that we were going to ‘squeeze’ out of this market.”
‘Appalling’
Colin Tucker, director of Wrexham-based 1st Affinity Fostering Services, raised concerns about the “blunt” policy creating a “hostile” environment for private providers.
Mr Tucker, a former director of children’s services, agreed with Prof Drakeford: “The market probably isn’t the best model for children – I’ve always been uncomfortable with that.
“But we are where we are and my issue is there’s been no differential between those of us who set it up for quite admirable reasons and have invested properly.”
Mr Tucker criticised a “lack of consultation” from the Welsh Government, saying: “The way this has been implemented is appalling.”
During the meeting on June 27, MSs also took evidence from the Association of Directors of Social Services Cymru, non-profit providers and the Welsh Local Government Association.