I thank the Secretary of State for advance sight of her statement. I welcome the Government’s focus today on children’s social care, and on the profiteering issues that we identified and set up the market intervention advisory group to look at when we were in government. However, at the heart of the problem is a lack of high-quality places for looked-after children. That is what is causing the high cost of placements, as demand is outstripping supply.
In its 2022 report, the Competition and Markets Authority did not recommend a profit cap, because
“the central problem facing the market…is…lack of…capacity.”
The CMA concluded that taking measures to limit the profitability of providers would
“risk increasing the capacity shortfall.”
While I share the Secretary of State’s desire to ensure that we are getting best value for the taxpayer in this sector, we need to solve the capacity issue first; otherwise, ironically, she risks driving up prices and exacerbating the shortage of places.
The last Government took steps at the Budget in April to address the capacity side, with £165 million allocated for building and maintaining placements for looked-after children. I note that in the most recent Budget, despite the welcome money for kinship care, there was no more money for increasing the number of places for looked-after children. That is essential; otherwise, the strategy on places set out today simply will not work. What plans has the Secretary of State made to increase the number of places for looked-after children? How much she will need to fund that? Did she ask the Treasury for the money at the most recent Budget? What is her assessment of the impact of the changes announced today on the number of places available for looked-after children?
The review carried out by the hon. Member for Whitehaven and Workington (Josh MacAlister), commissioned by the Conservatives in government, found that profit caps would not work as it would be
“relatively easy for providers to reallocate income and expenditure to maintain profit levels.”
Does the Secretary of State agree? Is the 8.8% level of profit that she referred to this morning the maximum level of profit that she is aiming for? If not, what will it be?
The capacity problem rests both on the availability of places and on the demand for those places. The Secretary of State has indicated that she would like to take steps on early intervention, which is obviously vital. Those were not specified in her statement, but I hope that she will bring them to the House at the earliest opportunity, as they are critical to solving the issue. She said that she wants to scrap payment by results. Given that that is an early intervention programme, on the basis of what evidence is she doing so? Does she have an evaluation of what scrapping payment by results will do?
We welcome much else in the statement, including the regional care co-operatives, multi-agency teams, and the enhanced role of Ofsted in the sector. On the latter, is the Secretary of State making any changes to the failure regime for children’s homes and the regularity of inspection? The Children’s Commissioner has done
outstanding work on the increasing use of deprivation of liberty orders. Will the Secretary of State outline what action she is taking on that important issue? I am pleased to see the Labour Government take forward our proposal for a unique child identifier. When can we expect the Bill creating that to be introduced?
I want the Government to succeed in this area. Children’s social care is a hidden issue, and getting it right is at the heart of solving so many problems that this country faces. I hope the Secretary of State can reassure me and the House that she will do more to bring forward a greater supply of places for looked-after children, and that an early intervention system is forthcoming, because the futures of looked-after children rely on it.