Bill to curb excess care system profits does not set out definitions – committee

A Scottish Government Bill designed to curb excess profits being made by firms looking after children in care has not defined how much profit would be allowed, a Holyrood committee has said.

The Children (Care, Care Experience and Services Planning) (Scotland) Bill will place a requirement on providers to provide financial information and as well as creating a “profit limitation requirement”.

The Bill would fulfil a pledge made as part of the Promise to improve the care system.

But in its report on the Bill, the Education, Children and Young People Committee said more clarity will be required from the Government, with the definition of excess profits to be left to ministers to specify after the Bill is passed.

The report also pointed to the difference between a surplus which is reinvested in services and a profit which is used to “bolster the finances of private individuals”.

“The committee is disappointed to note that, as much of the detail of these proposals is still to be worked out in secondary legislation, it is not yet clear how the Scottish Government would seek to determine what constitutes ‘excessive profit’ and how often this figure might be revisited,” the report said.

“The committee agrees with the points raised by stakeholders in relation to this issue, and believes that an understanding of this approach will be key to assessing whether these proposals are workable, or whether they risk disrupting an already fragile market.

“The committee notes the issues raised in relation to specialist provision, and the potential impact of these services closing or diversifying into other areas.

“The committee seeks further clarity from the Scottish Government as to how it proposes to mitigate that risk.”

Despite its issues with the Bill, the committee said it supported its general principles, but convener Douglas Ross has pushed for “substantial amendments” to the legislation.

“Every member of the committee agrees with the Promise made to Scotland’s care-experienced children and young people, and as a result we unanimously support the general principles of this Bill,” he said.

“However, we are disappointed by the lack of clarity around some of the crucial provisions in this long-awaited Bill and what stakeholders told us about the lack of consultation they experienced ahead of the Bill’s introduction.

“This includes issues with proposals to tackle excess profits in residential care, which had not been properly consulted on and do not seem to be well thought through.

“We are now calling for substantial amendments to be made before the Bill becomes law. This is an opportunity to bring about real and lasting change for the care community and it is vital that the Government gets this right.”

The Bill, if passed, would also extend aftercare to children who left care before turning 16 to their 26th birthday and introduce a right to life-long advocacy for those with care experience.

A Scottish Government spokesperson said: “The Promise is clear that there is no place for profiting in how Scotland cares for its children and the Scottish Government supports this principle.

“The Children’s (Care, Care Experience and Services Planning)(Scotland) Bill aims to introduce further measures to limit profit in the children’s residential sector.

“Proposals will continue to be developed, informed by our consultation on the issue.

“We will continue to engage with stakeholders as proposals progress.

“We welcome the Stage 1 report from the Education, Children and Young People Committee and will consider carefully its recommendations and conclusions.”