Motion to Take Note
My Lords, Part 1 of the Children and Young Persons Act 2008 enables local authorities to delegate specified relevant care functions to a provider of social work services. Part 1 has, to date, been brought into force only for piloting purposes but the Government brought it fully into force on 13 November, before sunset provisions would otherwise take effect.
The background to this is that in May this year the Department for Education laid a draft legislative reform order as an affirmative instrument under the Legislative and Regulatory Reform Act 2006. This draft LRO proposed removing the requirement for direct registration and inspection by Ofsted of social work services providers in England in parallel with Part 1 of the 2008 Act being brought fully into force. The department’s intention, as I understand it, was that if the LRO had been approved, inspection of arrangements involving such providers would have become part of the local authority inspection by Ofsted.
The Delegated Powers and Regulatory Reform Committee first considered the draft LRO in June. In its third report of the current Session, it recommended that the LRO should be subject to the super-affirmative procedure, because it considered that the noble Lord’s department had not adequately demonstrated that the LRO would not remove any necessary protection. The committee considered the draft LRO for a second time in July, taking account of a letter received from DfE Ministers responding to the points raised in its third report. However, the letter was not persuasive and the committee remained of the view that the department had not justified its statement that the LRO would not remove any necessary protection. Therefore, in its seventh report, the Delegated Powers and Regulatory Reform Committee recommended that the LRO should not proceed.
The department has now withdrawn the draft LRO and, consequently, my understanding is that this instrument is needed to set out registration and fitness requirements for persons who wish to contract with local authorities as providers of social work services. This instrument has been drawn to the special attention of the House by the Scrutiny Committee of your Lordships’ House, which is why I am moving this Motion this afternoon.
First, with the withdrawal of the LRO, can the Minister confirm that the matter is now settled for the foreseeable future and that independent providers of social work services will continue to be inspected directly rather than as an adjunct to a local authority’s inspection?
I would also like to ask the Minister about the wider implications of the policy to outsource social work services. Are the Government determined to press ahead with plans to outsource the placements of children in care to the private sector, despite opposition from children’s charities? Can he confirm that Serco and Virgin are among the firms that might take over those services? The Minister should consider very carefully before pressing ahead with plans to allow private companies to take decisions about some of the most vulnerable children, when the pilot projects showed no clear benefit for children. I know that the noble Lord’s department is rather light on evidence to justify the policies that it takes on, but will he acknowledge that an evaluation of the pilots by academics from King’s College London, the University of Central Lancashire and the Institute of Education found that there was limited evidence in favour of relocating public services for children in out-of-home care to the private sector?
The study, published last year by the Children and Youth Services Review, concluded that:
“While the independent sector is often the setting for innovation, the public sector continues to function as a repository for a wide range of expertise and resources. It is also more likely to offer continuity of knowledge, skills and care and, in this respect, it may be better placed to respond to the uncertainty that characterizes the needs of children in out-of-home care”.
What is the Government’s response to the evaluation of those pilots?
What will happen when children’s interests and the ambition of companies to make profits conflict? Most worryingly, the regulations seem to allow for a clear conflict of interest to arise. My reading is that the same private company will be allowed to place a child into care under contract from the local authority and then actually to run that placement. The parallel with clinical commissioning groups in the health service—CCGs, which are essentially member organisations run by GPs, are actually allowed to place more money into GP primary care-led services—is uncanny, and is clearly against the public interest.
Will the decision to contract with private providers be entirely a matter for individual local authorities, or is the Minister’s department intending to put pressure on local authorities? His department does not seem to have a very positive view of local authorities, and I would be very interested in his response on that matter.
I would like to ask the Minister about the consultation. The Explanatory Memorandum that accompanies the order states that there was near-universal support for the principle of these regulations. It goes on to list the broad support and the percentage of respondents agreeing with the proposals. However, the memorandum says that amendments have been made to the regulations concerning premises, and those covering the registration process, to reflect consultation responses. I would be grateful if the Minister could give details of the changes made as a result of the consultation.
My principal reason for raising this order today is to find out from the Minister exactly what government policy is, to look for reassurance that the Government will not attempt to reintroduce an LRO in the near future in order to reduce the amount of regulation on providers of services that are contracted with the local authority, and to seek some reassurance about the potential conflict of interest with regard to a private provider in contract with a local authority then placing a person who needs care into the institution or service that that private provider also runs. I beg to move.
My Lords, I thank the noble Lord, Lord Hunt, for proposing and speaking to this Motion. Noble Lords will be painfully aware of the tragic cases recently in the news, so I do not think I need to name them. The noble Lord said that we do not have a very positive view of local authorities; in fact we have a completely open-minded view of them, but the facts are that there are currently 26 local authorities in government intervention following recent Ofsted inspections and, of the 50 local authorities inspected since June 2012, 17 were found to be inadequate, only four were found to be good, none was found to be outstanding and the remaining 29 were judged adequate, which will become “requires improvement” under the new Ofsted framework. That is an extremely disappointing and depressing picture and it shows that the status quo is just not good enough.
My right honourable friend the Secretary of State for Education recently made an important speech on how to improve support for children in need, and many have noted how keen he is to encourage local authorities to improve and spread best practice. An important part of this is to allow innovation. We are committed to giving local authorities the tools they need to make their own decisions on how best to deliver services. We wish to give them every freedom to delegate social care services if they so choose.
The first step towards this was the commencement of Part 1 of the Children and Young Persons Act 2008, which was enacted by the previous Government. From 12 November, all local authorities have been free, if they wish to do so, to delegate children in care and care leaver services—only those services—to third parties. This follows the social work practice pilots which were put in place under the previous Government. Commencing the Act has enabled the pilots which are still in operation to continue if they wish to do so and given freedoms to other local authorities to delegate. It is a purely permissive provision. No local authorities will be forced to delegate functions under the CYPA, although we will not hesitate to intervene more directly where councils are failing vulnerable children, as in Doncaster. It is an important first step towards our aim of expanding this permissive approach to delegation.
The noble Lord is quite right that the Government’s original intention was not to make these regulations. He points out, as noted in the 16th report from the Secondary Legislation Scrutiny Committee, that we sought to make a legislative reform order, which would have removed the Ofsted registration requirement. However, whether or not these providers are registered has no bearing on inspection, and the way Ofsted will inspect, which is essentially following the child, is not affected by whether or not they are functions performed by the local authority or functions subcontracted by the local authority.
We are determined to give local authorities the opportunity to contract out to a range of providers. He mentioned some specific private providers—that would be possible. Providers could also include charities such as Barnado’s or NSPCC, or social work practices which have been spun out from the council, such as in Staffordshire or Bristol. As the noble Lord may know, we are great fans of the mutuals approach, which seems to be having a great effect.
My Lords, I am grateful to the Minister for his comprehensive response. I come back to the point he raised. My understanding is that these regulations are needed as a consequence of the fact that the draft LRO will not proceed. That is, in a sense, why I ask the question. Under the original proposals, the provider who receives a contract from the local authority would not have been inspected as an individual body but as part of the local authority inspection. Can the Minister say whether we can expect another LRO to be brought forward in the next year or two, or whether it is now settled policy that the provider, when it comes to inspections, will be inspected as a separate entity rather as an adjunct of the local authority? I am trying to elicit what future policy is likely to be—I think that I have grasped what current policy is as a result of this order and the fact that the LRO was not introduced. It is a question of whether this is a settled policy or whether the Government will come back in the next few months with further proposals.
I can confirm that the Government have no plans to change the inspection arrangement, which would be through the local authority.
The noble Lord also raised the very important point of conflict. Before expanding on any of those paths, we would look at that very carefully. We feel that some valuable lessons were learnt from the pilots. The advantage of a pilot is that one learns and expands on good practice. Evidence was found of positive change for children, parents, carers and the workforce, including increased opportunities for direct work with children and young people. There are examples of very good quality support for carers and of small integrated teams working well to offer a personalised service, as well as a number of other examples. We feel that we should take this opportunity. We may continue to expand but we would consult on that. It is only fair that these children and young people have the opportunity of the whole range of experts who may be available to them, rather than just those who happen to be working for a particular local authority. I hope that the answers that I have given the noble Lord will reassure him that we have no plans, in a rush, to make any more dramatic changes in the short term.
My Lords, I am grateful to the Minister. Perhaps he would care to write to me about the changes that were made as a result of the consultation; I would be happy for him to write to me on that basis.
I am glad to have reassurance that the Government are not going to reopen the question of short-circuiting the regulatory function with regard to private providers. I am also glad that the Minister has agreed to look at conflict of interest. He said that there are valuable lessons to be learnt from the pilots, and I agree. The most valuable lesson to learn is that there is a great risk of breaking up public sector provision. As the pilot evaluation showed, there is a repository of knowledge and a wide range of expertise and resources.
I take the point that there is an issue of innovation—of course there is. That is why the previous Government took through the 2008 Act. However, innovation cannot be introduced at the expense of the solid foundation that is required from a wide range of public services, and I hope that the Minister will be prepared to consider that. That said, although this short debate has not been well attended, none the less it has been useful.