Eliminating profit from the care of looked-after children in Wales
In 2024, the Welsh Government introduced the Health and Social Care (Wales) Bill to address the impacts of for-profit children’s residential and foster care provision. This came as a result of the (then) cooperation agreement between the Welsh Government and Plaid Cymru, which included a commitment to eliminate profit from the care of children looked after due to concerns about the impact of profit-driven motives on service provision and outcomes.
As part of the commitment, new providers seeking to register with Care Inspectorate Wales will have to demonstrate not-for-profit status from 1 April 2026, with existing for-profit providers needing to transition by 1 April 2027.
Alma Economics was tasked with exploring the potential benefits and adverse consequences associated with eliminating private profit from the care of looked-after children in Wales.
We designed and carried out a Delphi study to draw together the views of experts and assess the extent to which eliminating private profit from the care of looked after children would impact the care these children receive and their subsequent outcomes.
Our methodological approach included 4 consecutive phases.
• A desk-based review was first used to inform the design of the Delphi study, alongside a multi-pronged strategy to recruit experts.
• In the first questionnaire, open-ended questions facilitated the gathering of diverse opinions on each area of enquiry from individuals with varied professional backgrounds and expertise. Areas they were invited to consider included the potential impacts of the commitment and how wellbeing outcomes for children and young people may be affected as part of the wider transformation of children’s social care.
• In the second questionnaire, experts were invited to review and rate their agreement with a series of statements that outlined the most significant impacts and strategies identified in the responses to Questionnaire 1. In line with the Delphi study protocol, consensus was deemed reached when a suggestion from Questionnaire 1 responses that had been brought into Questionnaire 2 was rated by 70-80% of participants as either ‘agree’ or ‘strongly agree’, or ‘disagree’ or ‘strongly disagree’.
• Focus group discussions were then held with experts to explore areas where consensus was not achieved and to rank multiple areas of consensus. This enabled the identification of the most crucial impacts and suggestions, forming the foundation for an evidence-based and consensus-derived set of best practices. .
Overall, 25 experts participated in the first questionnaire, 19 in the second questionnaire, and 11 experts further attended focus groups.
Our research showed that there was less consensus on the impacts of for-profit provision in children’s social care along with the impacts of eliminating for-profit provision. For example, views diverged on whether for-profit provision leads to lower quality care and more breaches of regulation compared to not-for-profit services. Opinions also varied on whether removing profit would lead providers to reinvest surplus funds back into services, ensuring the availability of specialist support for children with complex needs.
However, there was greater consensus on the broader transformation of children’s social care. For instance, consensus was reached on the short-term and long-term positive impacts of the commitment, along with the broader transformation of children’s social care, on the sustainability and stability of children’s social care in Wales.
The majority of measures to enhance the sustainability and stability of care services for looked-after children and young people reached consensus. These included regular progress updates on available investments for supporting the not-for-profit sector, and joint planning, commissioning, and delivery of relevant services to meet children’s diverse needs.
Overall, experts’ responses showed there was general agreement with the commitment, but this was accompanied by concerns about the practical challenges and complexities involved in its implementation.
Our research helped identify areas of consensus clearly and transparently and further investigate where consensus had not been reached. This provides a solid foundation for evidence-based consensus-driven best practices and can inform decision-making on eliminating profit from the care of looked-after children.
You can find out full report here.