My Lords, I think it is fair to say that this is the most contentious issue to have arisen in our consideration of the Bill so far. We will discuss Clause 15 next week. In passing, I have to say that I am not quite sure why this measure is being discussed at this point. The noble Lord, Lord Ramsbotham, has stated his views on that, but I wondered why the Clerks did not direct it elsewhere. However, as I say, we will discuss Clause 15 next week. That clause will allow local authorities to opt out of providing some children’s social services. Many people fear that that could pave the way for the privatisation of those and—perhaps, later—other services, in ways outlined by noble Lords in this group of amendments.
The Bill refers to “different ways of working”, which I think most of us understand is code for exempting local authorities from requirements hitherto imposed by children’s social care legislation. Certainly, Labour holds strongly to the view that child protection and wider social care should not be run by an organisation seeking to make a profit. That is why we have joined with Lib Dem and Cross-Bench Peers, as well as the right reverend Prelate the Bishop of Durham, demonstrating the breadth of support for that requirement to appear on the face of the Bill.
We do not object per se to outside organisations working with, or for, local authorities in delivering children’s social services functions, but do so where a company or organisation designed to make a profit, as opposed to a surplus, takes on such functions that would expose the local authority—and, by definition, the children under its care—to the danger that the company might for whatever reason fail, and fall into receivership. Unfortunately, there is no shortage of examples of such occurrences since local authorities began to outsource various services.
Equally, if profit were the motive, the company or organisation may conclude after a period of time that the margins were insufficient in delivering those services and other avenues offered better prospects, and as a result end the contract. In either case, the local authority, which would have handed over the role of providing those services, would be faced with having to find another partner to deliver them or to bring them back in-house. Meanwhile, the quality of services provided for social care or child protection would be, at best, jeopardised. That is not a situation that any of us would wish to see. It is, therefore, a situation that should be ruled out.
At Second Reading, the Minister relied on the fact that in 2014 the Government had introduced legislation that prevented profit-making where local authorities delegate child protection functions. However, there remains the possibility of profit-making companies setting up their own non-profit subsidiaries to take over the critical and sensitive function of deciding how best to protect vulnerable children There is a serious risk that the likes of Serco and G4S could create these subsidiaries as part of their wider businesses
and, in that manner, these companies could indeed profit from the care of vulnerable children and their families, even if only indirectly.
There will be an obvious conflict of interest because some of these companies will also run children’s homes. That will make it difficult to know how funds might flow between the profit-making and non-profit-making arms. That is why the changes outlined in Clause 15 have caused such concern in the sector, and they could undermine public confidence in the services provided to children and young people. It cannot be stressed too much that effective child protection relies on public trust. The public need to be able to trust local child protection teams so that they feel sufficiently confident to report concerns they may have about a child and to have faith that if they raise a concern the service will act in the best interests of that child.
I invite the Minister to provide answers on two aspects of this crucial matter. First, the provisions of the 2014 legislation notwithstanding, can he guarantee that funds will not be transferred between profit and non-profit arms of a company where the latter is delivering services? Secondly, will the purpose and culture of companies or organisations bidding for the right to deliver child protection and social care services be taken into consideration when decisions are made about delivery partners? When an organisation’s primary aim and main business has nothing to do with children, would it be considered a suitable partner for a local authority?
Nothing can be more important than the safeguarding and protection of children, especially those who are at greatest risk or are the most vulnerable. Organisations prominent in the social care and child protection sectors have registered their anxiety over the exemption proposals in the Bill. At Second Reading, I asked the Minister whether the Government had made any assessment of the risk to children in allowing local authorities exemption from some key duties for keeping children safe. I hope he will now be in a position to let me have his response.