Draft Children and Young Persons Act 2008 (Relevant Care Functions) (England) Regulations 2014

The Committee consisted of the following Members:

Chair: Sir Edward Leigh 

† Baldwin, Harriett (Lord Commissioner of Her Majesty's Treasury)  

† Chishti, Rehman (Gillingham and Rainham) (Con) 

† Cooper, Rosie (West Lancashire) (Lab) 

† Doyle-Price, Jackie (Thurrock) (Con) 

† Evans, Mr Nigel (Ribble Valley) (Con) 

† Fox, Dr Liam (North Somerset) (Con) 

† Hain, Mr Peter (Neath) (Lab) 

Hepburn, Mr Stephen (Jarrow) (Lab) 

† Jones, Graham (Hyndburn) (Lab) 

Kaufman, Sir Gerald (Manchester, Gorton) (Lab) 

† Leslie, Charlotte (Bristol North West) (Con) 

† McCabe, Steve (Birmingham, Selly Oak) (Lab) 

Meacher, Mr Michael (Oldham West and Royton) (Lab) 

† Morris, David (Morecambe and Lunesdale) (Con) 

Simpson, David (Upper Bann) (DUP) 

† Timpson, Mr Edward (Parliamentary Under-Secretary of State for Education)  

† Ward, Mr David (Bradford East) (LD) 

† Wright, Simon (Norwich South) (LD) 

Mark Oxborough, Committee Clerk

† attended the Committee

The following also attended, pursuant to Standing Order No. 118(2):

Lewell-Buck, Mrs Emma (South Shields) (Lab) 

Munn, Meg (Sheffield, Heeley) (Lab/Co-op) 

Fourth Delegated Legislation Committee 

Wednesday 3 September 2014  

[Sir Edward Leigh in the Chair] 

Draft Children and Young Persons Act 2008 (Relevant Care Functions) (England) Regulations 2014

2.33 pm 

The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson):  I beg to move, 

That the Committee has considered the draft Children and Young Persons Act 2008 (Relevant Care Functions) (England) Regulations 2014. 

It is a pleasure to serve under your chairmanship, Sir Edward. The regulations will enable a local authority to delegate the discharge of a wider range of its children’s social care functions to an external provider than is currently the case. Currently, section 1(2) of the Children and Young Persons Act 2008, which was introduced by the previous Government, permits such arrangements for functions relating to looked-after children and care leavers. The powers are permissive—I emphasise that it is entirely at the discretion of local authorities as to whether and how they wish to use them—but do create important flexibilities that allow an authority to consider a much wider range of approaches as they decide how best to support the vulnerable children and families to whom they have duties. 

Members of the Committee will no doubt be aware of the strength of feeling that the consultation on the regulations revealed and of some of the concerns drawn to the attention of the House by the Secondary Legislation Scrutiny Committee. Indeed, there was a high number of responses to the consultation—1,315—as well as several petitions and an e-campaign, which resulted in some 58,000 e-mails raising specific points. My ministerial colleague in the other place, Lord Nash, addressed many of those matters in some detail in Grand Committee in July. I will confine myself to making just three points on those matters before focusing on the positive changes that the regulations will enable. 

First, it is true that our original proposals generated significant debate, which was overwhelmingly focused on concerns about the possibility of profit-making at the expense of the child’s interest, particularly in the field of child protection. In that context, a local authority’s continued obligations to meet statutory duties when functions are delegated, combined with Ofsted’s role in holding it to account, would have provided appropriate safeguards. However, profit-making was never at the heart of the proposals, which are squarely about enabling more flexible working structures and harnessing external expertise to improve outcomes. It is worth noting that none of the existing delegated arrangements involve profit-making organisations. We have taken heed of the strength of opinion on the issue and acted decisively,

amending the regulations to exclude delegation of the additional functions to organisations carried on for profit. 

Secondly, there has been some criticism of the consultation process—its length and the clarity of the proposals. I would argue that an exercise that generates over 1,300 responses with much thoughtful comment and prompts online petitions and substantial coverage in the trade and national press clearly shows that we have engaged openly and fully on the policy. Our swift response on the question of profit-making shows the seriousness with which the Government have taken the views expressed. More generally, consultations are all too readily viewed with scepticism, as we know, being seen merely as an exercise in going through the motions, the decision having already been made in advance. I hope this consultation demonstrates that that is not the case and has resulted in a significant amendment to the proposed draft. 

Thirdly, the concern has been raised that the delegation of local authority functions will erode accountability. It is important to be clear that the regulations make absolutely no change to the legal position on accountability. The local authority remains accountable to service users and voters for its services, even where it delegates functions. Ofsted will continue to hold local authorities to account for the quality of their services, however they are delivered. 

I turn to the benefits that the regulations will offer. Much of my Department’s work around children’s social care is focused on ensuring minimum standards of services and practice. In many cases there is an urgent need for improvement, with the Government having to intervene in one in seven authorities. This is vital and necessary work but we cannot stop there. We need to aim much higher if we are to realise the improvement that is needed across all our children’s services, not just those that are currently underperforming. As the recent publicity surrounding children’s services has demonstrated, we cannot simply carry on with more of the same. 

The regulations are a small but important part of an ambitious programme to stimulate innovation in children’s social care. Through the innovation programme we are supporting local authorities and others to generate and implement new ideas to improve children’s services—ideas that enable even stronger focus on the needs of children, young people and families. For example, we have heard proposals to move children’s social care wholesale into independent trusts with a social enterprise model, a much tighter governance focus on child outcomes and practice rooted at the heart of the community. We have had plans for independent expert-led organisations with a particular focus in a given field—perhaps fostering, profound special educational needs, or even highly specialised fields such as female genital mutilation and early forced marriage. Such organisations could work across local authority boundaries, bringing a degree of experience and expertise not available in individual authorities. Perhaps not all those initiatives will be successful, but there are strong grounds for optimism. 

The regulations offer the opportunity for a genuine shift in the way social care is managed, giving a strong potential for longer-term improvement. The previous Administration’s social work practice pilot showed evidence of positive change for looked-after children and care leaders. The regulations build on that legislation, which

allowed the piloting of these social worker-led independent providers of services. More recently, we have seen benefits to staff, services and costs in other sectors through the Government’s mutual programme, with over 100 public service mutuals now delivering more than £1.5 billion-worth of public services. 

The impact of the innovation programme will be robustly evaluated and, in time, I would hope to see more local authorities working with partners to take advantage of these new freedoms and the opportunities they offer for improving services. This is exciting thinking, holding out the prospect of real improvement for vulnerable children in this country, and the regulations will provide the legal framework to make such thinking a reality. Action for Children, a very experienced and respected charity, has said: 

“The freedom to outsource children’s services will allow local authorities to innovate and improve support provided to families.” 

That is the motivation behind the regulations and I commend them to the Committee. 

2.41 pm 

Steve McCabe (Birmingham, Selly Oak) (Lab):  Good afternoon, Sir Edward; it is a pleasure to serve under your chairmanship. When the noble Lord Nash introduced these proposals in the other place, he said that the Government were partly doing this in response to a number of local authorities which were “eagerly” awaiting the new opportunities that the regulations would afford them. I wonder if I might begin by asking the Minister to cite the local authorities that have been pressing him to introduce the regulations. 

We heard the Minister say that the Government received a high response to what many people thought was a rather rushed timetable—six weeks, including a holiday period—for consultation on these plans. Will he confirm that the vast majority of responses were not favourable and were largely concerned with the risks of introducing a profit incentive or creating a potential conflict of interest? Am I right in thinking that, apart from the concession on not-for-profit contractors, he has largely ignored the consultation and decided to push ahead with the regulations despite the fact that 94% of respondents said they opposed them? 

I acknowledge that the genesis of the idea lies in the previous Labour Government’s decision to permit a small number of pilot practitioner-led social work practices to be set up to deal with particular cohorts of children on behalf of the local authority. That, of course, was a rather different approach to the wholesale outsourcing of children’s services, which the regulations permit. 

Let me be clear: I spent a large part of my working life in social work; I am not averse to innovative approaches, new partnerships or arrangements that improve the quality of work with children. However, as we begin to digest the full horror of the Jay report and reflect on the many inquiries into child care, we would be hard pressed to find examples of people arguing that a fragmentation of services is the way forward. It is true that there are examples in agency social work, independent reviewing officers and fostering and adoption that demonstrate that not everything needs to be provided by a local authority. In that context, I welcome genuine innovation, but I am worried that any measures that make senior

officers less directly accountable for what happens to our most vulnerable children are a step in the wrong direction. 

The Association of Directors of Children’s Services is concerned that the proposals will create complete confusion over accountabilities and risk further fragmentation of the complex collaborative partnerships that characterise our children’s social care services. Does the Minister accept that fragmentation is a likely consequence of what he is advocating? Why does he think that is a good idea? The College of Social Work says 

“There has been a lack of Parliamentary debate and oversight about this proposal,” 

which it describes as 

“a major public policy change affecting almost all aspects of the provision of children’s services.” 

It has also voiced concern that the Government made no attempt to consult children and young people on the changes, or those who represent their views such as the Children’s Commissioner or children’s legal rights forum. Does the Children’s Commissioner back the plans? Can the Minister cite a young people’s forum that has endorsed his proposals? Professor Eileen Munro, whom the Government commissioned to carry out an independent review of child protection, has also expressed her concern that the proposals may create 

“perverse incentives…to take more children into care” 

or, conversely, 

“leave too many languishing with dangerous families.” 

Will the proposals allow one local authority to partner with another, and perhaps save money by agreeing to share or delegate some of their child care functions? That is what the Association of Directors of Children’s Services has advocated. If the Minister will not allow that kind of partnership and innovation, can he explain why not? The one clear-cut example we have of this kind of outsourcing of services is children’s homes. Is it not a reality that 75% of children’s homes are now run by independent providers, and provision of residential placements is distributed in a geographically uneven way, with concentrations where property is cheapest? Has that clustering not resulted in an increasingly large number of children and young people being placed at a significant distance from their home area? Is that not one of the problems that the Home Affairs Committee drew attention to in its report on child sexual exploitation? How will the Minister ensure that the proposals do not compound those problems? 

I heard the Minister talk about the children’s social care innovation programme and I understand it will be a source of additional funding for authorities who wish to avail themselves of the Minister’s new approach. Can he assure us that he will regularly update Parliament on the use of that fund and that the evaluation of it will be subject to independent analysis? 

As I understand the proposals, accountability for children will rest solely with the local authority, despite the fact that day-to-day responsibility might rest with an outsourced provider. Can the Minister confirm that that is the arrangement he has in mind? Will that make it easier or harder to keep track of those children who frequently run away, the children we are seeing as victims of child sexual exploitation in places such as Rotherham and Rochdale? 

Can the Minister explain how complaints and concerns relating to the treatment of individuals will be dealt with under his plans? Will a parent use the agency’s complaints procedure with further redress through the local authority if they are not satisfied, or will they need to complain directly to the local authority about the contractor? Will the contractor be obliged to report any complaints to the local authority, or indeed to anyone else? 

Provision was made such that if the social work practitioner pilots to which I referred earlier were to be extended, they would, under section 4 of the 2008 Act, be regulated agencies subject to registration and inspection. The Government have indicated that they do not place much store by registration, but am I right in thinking that the Minister intends that the new providers will not be registered or approved by anyone? They will not be regulated or inspected—in fact, the only check will be the local authority contracting process. In essence, that means that anyone could set up a service for vulnerable children and offer it on a contractual basis to a local authority. 

Will the Minister confirm that Ofsted will not directly inspect contracted provision, but will merely look at a sample of cases where services have been delegated? It looks to me like extremely light-touch regulation and inspection. Is the Minister confident that, by adopting such a lackadaisical approach, he is not storing up future scandals? He is essentially relying on the quality of the contract to solve all problems, but the early experiences of health trusts and local authorities with PFI do not suggest that they will have the expertise and know-how to cope in the world of contracted provision; experienced contractors and their surrogate agencies might run rings around them. How exactly will that improve the quality of provision? 

The Minister has made it clear that the contracted provision will have to be in the not-for-profit sector. What specific steps will he take to ensure that larger profit-making groups will not simply set up not-for-profit subsidiaries in order to bid for the work? In the other place, the best that Lord Nash could offer by way of an answer was that he found it hard to believe that that would happen. We need stronger reassurances. We have seen the model elsewhere: education companies have set up trusts to establish academies or free schools and then sold their services to those schools. What is to prevent that from happening with these plans? Can the Minister give a categorical assurance that his not-for-profit pledge extends such that an agency that wins a contract will not be allowed to draw up a care plan that would result in a child being placed in a residential placement owned by the agency’s for-profit parent company? 

I considered calling for a vote on the matter because of the number of representations I have received from people who are deeply concerned about the Government’s motives, and because of the fact that 94% of respondents to the consultation opposed the change. I decided against that course of action only because I acknowledge that the measures are intended as enabling legislation. Local authorities will not be forced to outsource their provision; they will be free to make decisions about what they believe to be in the best interest of the children for whom they are responsible. 

I like the Minister; he is a decent, honourable man. I am not convinced that the plans before us are entirely his, but I am prepared to accept his word that there will be no attempt by the Government to introduce unfair financial arrangements that will force local authorities to outsource services against their better judgment. Nevertheless, I am not at all convinced that the Minister has made a persuasive case for the regulations. If people’s worst fears are realised and these measures prove to be the route to fragmented, unaccountable, unregulated provision, riddled with conflicts of interest and dubious financial incentives, a future Government will have to repeal them. By that time, however, thousands of children might have suffered needlessly. This decision will become the Minister’s legacy. That would be a tragedy for a man who has done so much good in the time he has occupied the post. 

2.55 pm 

Meg Munn (Sheffield, Heeley) (Lab/Co-op):  I am not a member of the Committee so I could not vote if a vote was called, but I have turned up to speak and to ask the Government to think again and do further work on the proposals. Yesterday, we saw the justified outrage at the events in Rotherham. Surely, if we needed any reminder of the importance of understanding how changes, particularly in child protection, will be implemented, that was it. I am asking the Minister to take the regulations off the table today and think again. 

As my hon. Friend the Member for Birmingham, Selly Oak and, indeed, the Minister has said, the Government did consult but it was, by anybody’s standards, a rushed affair with just six weeks for responses, which is short in any case but included Easter and May bank holidays—four public holidays—and the European and local elections and, therefore, the purdah period that affects local government. Unsurprisingly, there was very little general media coverage or discussion and the regulations were quickly laid in Parliament, passed by the House of Lords in July and are before the Committee today. The Government’s guidance says that new or contentious policies should have a 12-week consultation period. The proposals are a significant change with major implications for how we respond to the needs of some of our most vulnerable children. 

As the Minister outlined, the Government responded to the concerns of some respondents to the consultation by amending the draft regulations so that local authorities may not outsource their children’s social work functions to companies that are carrying out their activities for profit, but as we have heard, there is nothing to prevent companies setting up not-for-profit subsidiaries to do the work and charging them excessive management fees. Indeed, the explanatory memorandum to the regulations makes it clear, in paragraph 7.4, that that is the case. Will the Minister be clear about the Government’s intentions? Which organisations has the Department for Education been working with on the implementation of the proposals? Are they for-profit or not-for-profit organisations? What plans does he have to ensure that information about the changes is put out? Who will be doing that—for-profit or not-for-profit organisations? 

Other, more complex issues were not widely considered in the consultation. Although the Minister maintains that there was a large number of responses, the immediate response was the concern about making profit out of

child protection in particular, and other issues, which needed more time to consider and discuss and to draw up a consultation response, simply did not get a look-in because of that overriding concern. Those issues include independent organisations intruding into family life and data sharing between public, private and third sector organisations. Anybody who has read the report on Rotherham in detail will understand that the different parts of the chid protection system matter. What goes wrong rarely happens in one organisation. It can go through from the Crown Prosecution Service to the police, the local authority, health and education. What are the implications of sharing that information? 

In response to a report by the all-party parliamentary group on child protection, the Government committed to updating the 2009 data sharing rules but what does that mean when information will be shared across different organisations? I am talking about the most detailed, personal information about families and children who have been abused or who are suspected of being abused. The full implications of these changes have simply not been fully explored. Although many children’s services are currently provided by charities, it would be a significant change to let them undertake child protection investigations, assessments, and to seek court orders to remove children from their families. One of the most common features, as the Minister knows well, of serious case reviews is a failure of information sharing. How will information sharing in this new world work? What are the implications for public confidence and the confidence of other organisations in the system? 

The Minister has stated that local authorities will retain overall accountability, but once functions are delegated, how will local authorities retain sufficient expertise and experienced staff to effectively monitor the contract? Once contracted out, how will the changing pressures in children’s social work be managed? The local authority will be responsible, but will it have the mechanisms to do that? The chief social worker, Isabelle Trowler, has argued that 

“For local authorities the same legal duties will apply…they will be subject to precisely the same inspection regime whether or not they choose to delegate functions. That critical thread of accountability is unaffected by anything being proposed.” 

Frankly, that misses the point; the local authority remains accountable but will be restricted in its ability to act. How can it show democratic accountability for processes that intrude into the lives of children and families? 

Questions are being asked about the failure sufficiently to hold services in Rotherham to account under the current system. People have said to me that the situation in Rotherham surely suggests that current systems are failing; it does. They have failed in that local authority and they have failed for too long. We need to understand why. The regulations introduce a further layer of complexity. What consideration has been given to the added complexities involved when services are outsourced? 

Further proposed changes are likely to increase the risks to children, as my hon. Friend the Member for Birmingham, Selly Oak outlined. The Deregulation Bill currently before Parliament removes the requirement of those providing social work services on behalf of local authorities to be registered, regulated or inspected. No one has suggested that those providing care, such as

foster parents or children’s home services, no longer need to be regulated. How can it be right that those making the placements are not? 

The Office of the Children’s Commissioner has said that it believes 

“all delegated social care services should be required to have formal registration by Ofsted”. 

That is in addition to an expectation that they will be rigorously inspected. Yesterday, we heard very clearly from Members on both sides of the House—not least the Home Secretary, one of the Government’s most senior Ministers—that child protection is all our business, yet here we are, 24 hours later, rushing through changes that will put children at risk because they have not been thought through and we do not know their full implications. The implications for the ability of local authorities to oversee child protection must be more fully debated and discussed. It is not acceptable for Ministers to wash their hands of their responsibility and expect local authorities to manage the flaws in the system. 

Comprehensive inspections of safeguarding policies and procedures are essential for all organisations working with children. Proper co-ordination of services and good communication are essential. An outsourced, fragmented system with long lines of accountability will put more children at risk. When something goes wrong, we look at who failed. We analyse the systems and the individuals in great detail. We should surely spend as much time understanding what the new proposals mean. 

3.3 pm 

Mrs Emma Lewell-Buck (South Shields) (Lab):  It is a pleasure to serve under your chairmanship, Sir Edward. Before I explain my specific concerns about the proposals, some of which have already been expressed by my hon. Friends, it is worth noting the Government’s abysmal record on outsourcing services relating to public protection. The recent privatisation of the probation service has only been in place for a couple of months, yet we have already seen serious failures which have put the public at risk. Fragmenting child protection in a similar way has the potential to throw up similar problems. Whatever reassurances we are offered, we need only look at probation to see what happens in reality. I wrote to the Minister before the recess, outlining some of my concerns. I thank him for his reply but I have to say I was not convinced. I hope to use this opportunity briefly to revisit my concerns and get some clarity from him. 

The first issue is whether third sector organisations have the capacity to carry out child protection functions. Such organisations have a wealth of expertise in the child protection arena, but it is generally in a particular field such as counselling for victims of sexual abuse. They do not have in-depth knowledge of core child protection functions, legislation or processes. In my former career in child protection, I never came across a third sector organisation that understood these functions fully enough to apply them in practice. 

The Minister may well reply that these functions will need to be carried out by, or under the supervision of, qualified social workers. However, back on the ground, in the real world of practice, that will create gaps in social work teams. Instead of doing social work, they will spend their time supervising the third sector, which is hardly the best use of resources. For their part, third

sector organisations that currently provide specialist services to support child protection will lose their focus. The demands of carrying out day-to-day child protection functions will invariably detract from the excellent work they do. 

Budgetary pressures are another major concern. While it would be up to local authorities to decide whether to delegate functions, the reality is that local authority budgets are under tremendous pressure under this Government. Authorities will make efficiencies where they can, and if delegating functions provides such an opportunity, they may feel compelled to outsource services on cost grounds, even if that means breaking up a well-performing service and handing it over to an untested provider to save money. It is easy to imagine how the current financial pressures could influence local authority decisions in that way. 

Another issue that has repeatedly come up in my discussions with child protection professionals is accountability. Under the proposals, a local authority that delegates its functions remains accountable for the quality of service, even though delivery is the contractor’s responsibility. The local authority will still be required to oversee service delivery, and it will be blamed when things go wrong, but its ability to influence the quality of service will be greatly reduced. 

Nor will it be clear to families who is responsible for failures. I really pity those families with a complaint or a genuine grievance who approach the delegated agency about it and are told they have to go to the local authority. Families in the child protection arena already have enough to contend with. In his letter, the Minister insisted that accountability lay squarely with the local authority, but it will not appear that way to families in the system. Muddling accountability poses the danger of further damaging public confidence in child protection. 

I welcome the Government’s clarification that for-profit firms will not be able to take on child protection functions, but it remains the case that a for-profit company can have a non-profit arm and carry out these functions. That can create conflicts of interest—for example, if the parent company also delivers private fostering services. It would be helpful to know which organisations are interested in taking on these contracts. In the response I received from the Minister, he advised me that there had been 

“no direct expressions of interest” 

in bidding for the contracts, but in a recent debate before the recess he said he was “encouraged by the interest” several of our largest child protection charities had expressed in this work. I hope he can clear that up for me today. 

I remain unconvinced that outsourcing can improve services. Serious case reviews over the decades have cited a lack of information sharing between the myriad agencies operating in the child protection arena as contributory factors in the death of children, from Maria Colwell just over 40 years ago to Daniel Pelka in 2012. Creating more agencies will not mitigate that; it will simply increase the risk of miscommunication and data loss, and provide more gaps for information to slip through, creating more opportunities for more children to suffer significant harm. 

3.8 pm 

Mr Timpson:  I thank all hon. Members who have contributed to the debate, and I will address as many of their points as I can. Those who have spoken have done so because they have a great professional or personal expertise, combined with a real passion to make sure we do all we can to protect children right across the country. Although we might differ on some of the points that have been raised about the regulations, I hope that, when it comes to our motivation, we are all pursuing a common cause. 

I welcome the response of the hon. Member for Birmingham, Selly Oak and his belief that, where there is genuine innovation, we should pursue it. I note that, when the matter was debated in the other place, Baroness Hughes, who spoke on behalf of Her Majesty’s Opposition, made it clear from the outset that there was no disagreement about the principle of the regulations. She went on to pursue some of the points that Opposition Members have subsequently raised in this debate. 

As I said, I will try to address as many points as I can, but if I fail to do so adequately I will, in the usual way, ensure that full answers are provided in writing, and I am happy to facilitate follow-up meetings with Members. The hon. Gentleman asked which local authorities had professed an interest in the delegation of functions that the legislation will permit. Staffordshire and Richmond and Kingston have shown an interest, and there have been a number of subsequent bids to the innovation programme from other local authorities that want to look at the potential of using social enterprise or the mutualisation of some of their children’s services. 

In my opening remarks I spoke about the consultation and tried to get across that consultations often get off on the wrong foot because there is an expectation that there will be no change as a consequence of people contributing. The consultation elicited a vast number of responses, the overwhelming number of which related to the profit-making issue. Nevertheless, other matters were also considered, and it would be wrong for me to consider only where the most noise has been created by the consultation and to fail to look at the other points raised as a consequence of people’s contributions. I have therefore looked carefully at the whole range of consultation responses. There has certainly not been any attempt on my part largely to ignore the consultation. I want to try to ensure that the decisions I and the Government make are as informed as they can be, but reflect the policy intention we have set out. 

I do not accept that there has been a lack of parliamentary oversight. The recent passage through Parliament of the Children and Families Bill involved some discussion of this issue, and there was the debate in the other place just before the summer recess. My experience of that Bill was that the attention and scrutiny given by their lordships was very powerful and resulted in many changes to the legislation. They considered it carefully and sent it back to the House of Commons. That is a good way to ensure good parliamentary oversight. 

The hon. Gentleman asked whether young people, children and children’s organisations had been involved in the consultation. Many made direct responses, but we also had a number of consultations with organisations such as Action for Children and Kids Company. I am happy to provide him with a list of all those with whom we had contact regarding the issues at hand. 

The hon. Gentleman quoted some of the concerns expressed by the Association of Directors of Children’s Services about the fragmentation of services. I was a little surprised to hear that, because Alan Wood, the president of the association and also the director of children’s services in Hackney, has been clear that the association wants to pursue innovation. He said that is it about being 

“creative and thoughtful about solutions where authorities are failing” 

and asking how we can 

“combine the skills of local authorities with the best of the voluntary and commercial sector.” 

I know that he speaks both as the president of the association and as a director of children’s services, and there may be others who work at that level in local authorities who have a different personal view, but that is the view he has expressed as the president. He is working closely with us to try to bring those beliefs into practice. 

I do not accept that an inevitable consequence of such permissive and enabling powers, if they are used, is a fragmentation of services. Indeed, as I was trying to illustrate with the example of a specialised FGM or child sexual exploitation service, the powers could actually bring services together so they are much more knitted around the child or family that requires them. 

I was asked whether one local authority could partner with another. That can be done, as we have already seen in the form of central Government intervention, with Hampshire taking over the running of children’s services on the Isle of Wight, and in the discussions on the tri-borough set up in west London. There is much scope for trying to rationalise some services. The Richmond and Kingston social enterprises that are being set up on the back of the changes to the 2008 Act are a good illustration of how that can happen, particularly in smaller metropolitan boroughs. 

The hon. Gentleman asked about children’s homes. That is a delegation of services rather than functions, and I completely agree with his point that too many children are being placed far away from home in inappropriate environments. That is precisely why, in the past 15 to 18 months, we have been pushing through far-reaching reforms to how children’s homes are run and monitored and how decisions are made on where children are placed, moving away from minimum standards to quality standards, and ensuring that the work force is of a standard we would all accept. There is also more rigorous accountability where children’s homes are failing, which Ofsted has been supportive of. 

The hon. Gentleman asked for updates on the innovation programme, which I am happy to provide. There will continue to be a rigorous evaluation of all the bids. Public money is being spent, so there are clear processes in place to ensure that that happens. I will write to him giving full details of the complaints procedures. 

On new providers, we need to be clear that there are functions being delegated, and services being delegated. Where a function is being delegated, although registration may not be required, it is almost inevitable that some of the services being provided already require some type of registration. Examples include a voluntary adoption agency or a fostering agency. A case in point is the Doncaster trust, which registered itself as both a voluntary

adoption agency and a fostering agency, so it can provide the services relating to the functions delegated to it. Over and above that, the single inspection framework now in place ensures that all the services the local authority is responsible for, irrespective of whom the functions have been delegated to, form part of that inspection. I visited Staffordshire to see the social work practice of Evolve YP, which was one of the first social work practices to be piloted. It has been extremely successful, and was one of the most dominant parts of the Ofsted inspection, which showed that Staffordshire county council had good children’s services. It told me that it spent more time in the company of Ofsted than did the council offices just down the road. That is a good illustration that the inspection framework is there. Any organisation looking to contract in as a provider of a delegated function to a local authority will still be under the inspection and regulation regimes. 

Meg Munn:  I am genuinely not quite following the Minister. A clause in the Deregulation Bill will remove the need for certain organisations providing social care functions to be registered. Is that still going ahead? 

Mr Timpson:  The hon. Lady is right; that is in the Deregulation Bill. However, registration requirements already exist for voluntary adoption agencies and fostering agencies, for example. Where there is a delegation of function, those registration requirements are still necessary if they are carrying out those services as part of that function. 

Meg Munn:  My confusion is this. There is continuing registration for adoption and fostering, which I am very happy about, but if the relevant provision in the Deregulation Bill is passed, there will be no need for those doing assessments or investigations to register. Why not? 

Mr Timpson:  We have discussed that issue at length with Ofsted, which obviously has a key role in the registration process as well as the inspection process. We agreed that having registration on top of the contractual arrangements is potentially a duplication of effort. Also, there is a danger that the registration process will be seen as much less light-touch than it actually is in trying to ensure the veracity and quality of the service. That comes through the contractual arrangement. It is for the local authority to make sure that any contract it buys into is with an organisation that will enable it to deliver the quality of service it will then be inspected against. We think, and Ofsted agrees, that the best course of action is to ensure there is a robust and clear, single inspection framework. That issue may be debated further during consideration of the Deregulation Bill, but we think that that is the right balance. 

On the issues raised by the hon. Members for Birmingham, Selly Oak, for Sheffield, Heeley and for South Shields about profit-making companies, it is right that if they have a not-for-profit subsidiary, they can apply to carry out some of the functions. But of course, they still cannot make a profit either directly or indirectly as a consequence of that arrangement. So in the scenario that the hon. Member for South Shields described, whereby the not-for-profit arm of a company placed a child in the same company’s profit

arm—a children’s home, for example—a profit would be created as a consequence of that contract, so that could not happen. 

On excessive management fees, if a local authority wants to enter into a contract with excessive management fees attached, that is a matter for them. At a time when budgets are tight and local authorities are having to make difficult choices, it would be perverse to spend money on excessive management fees when a much better deal could be obtained by looking elsewhere. So I do not accept that that is a direct consequence of these changes. 

Mrs Lewell-Buck:  In the example the Minister gave, companies would not be allowed to carry out functions if there was a profit involved, but who will actually monitor whether they do that? Who will keep track of whether that is happening? 

Mr Timpson:  Local authorities have a responsibility to discharge their functions. They are inspected against their ability to do that, so there is a clear accountability structure in place. It already exists. It is not changing. The legal basis is exactly as it is today. We must remember that this is not a new thing. We are triggering enabling legislation that already exists, in part, in the delivery of children’s services relating to children in care and care leavers. This is an expansion of the permissiveness for local authorities to move into other areas, should they wish to do so. 

This is a good moment to emphasise that when we consulted on these proposals and looked at the interest out there in the charitable and commercial sectors, no local authorities were looking to move into an arrangement with a private company. Where they have been able to delegate functions, none has delegated to a private company. Similarly, many of the private companies that were potentially interested in entering this space have been extremely cautious about doing so. At the moment, there are no such bids or potential arrangements. In any event, the regulations before us would prevent that from happening in a direct relationship. 

Various children’s charities have expressed interest in a move into the delegated functions that the regulations would enable. I have mentioned Action for Children, and Barnardo’s and others have also expressed an interest. Subject to the usual sensitivities around any contractual arrangement that has not yet been signed, I am happy to share such information with the hon. Member for Birmingham, Selly Oak. 

I go back to where I started: the motivation behind the regulations. I accept, and have been at pains to emphasise, that Opposition Members naturally want to be reassured that what we are creating will not harm children, but protect them better than in the past. I would not be introducing these measures if I was in any way concerned that I would be making children’s lives worse; that is not my motivation at all, and it would be perverse if it was. 

Everyone will have their view as to how things will play out, but I am confident that, through the permissiveness that has been provided for, the accountability framework that remains in place and the innovation programme that is helping to guide new providers, such as charities, into this area, we have the potential to turn around the excessive number of children’s services that are failing or simply not good enough. We know that can be done. 

I anticipate that local authorities will remain the dominant player in the delivery of services. There are some excellent examples around the country. I recently had the opportunity to go to Essex county council, which has moved from being inadequate to good in a few short years. So this can be done without the need to delegate functions. As we know, however, Coram has taken over adoption services in Kent and Harrow, and other local authorities, including in Richmond and Kingston and in Staffordshire, are saying to us, “We are shackled at the moment. We cannot go outside our normal boundaries of practice. We are unable to bring in other expertise so that people can work with us to improve services for children in our area.” 

It is incumbent on us to listen carefully to those calls, to do what we can at a time when there is greater scrutiny of children’s services than there has been for a long time and to ask how we can do better, because more of the same will not be good enough. The innovative thinking by some local authorities and their partners, which I outlined earlier, shows that there are real possibilities for positive change, which the regulations will support. I am absolutely committed to doing everything I can to improve the support and protection we provide to our vulnerable children, and the regulations represent an important step in the right direction. 

Question put and agreed to.  

Resolved,  

That the Committee has considered the draft Children and Young Persons Act 2008 (Relevant Care Functions) (England) Regulations 2014. 

3.27 pm 

Committee rose.