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Plans to restrict profit making in the care of looked-after children cleared the first hurdle in the Senedd amid concerns about unintended consequences.

Senedd members voted to agree to the principles of the health and social care bill, which aims to restrict private profit, but warned of “huge risks” in practical terms.

Dawn Bowden, Wales’ social care minister, cautioned that the cost of caring for looked-after children has increased from £60m a decade ago to around £200m today.

“If we carry on that trajectory, we will be looking at a bill for local authorities of around £1bn in the next ten years,” she said, stressing that doing nothing is not an option.

Ms Bowden added: “We don’t want to see children treated as commodities in the care sector; we want to see investment in the care of our looked-after children.”

‘Huge risks’

Russell George, who chairs the Senedd’s health committee, called for investment beyond the £68m the Welsh Government has already committed to the policy.

The Conservative said a majority of members supported the principles but the committee raised “very real concerns” about how the bill will work.

Mr George told the Senedd: “There are huge risks for the sufficiency and sustainability of residential and foster places … as an unknown number of providers leave the market.”

He said the cost of caring for looked-after children has risen dramatically in the past decade, which seems unsustainable with councils already facing enormous pressures.

Plaid Cymru’s Peredur Owen Griffiths raised the finance committee’s concerns about the “disappointing, below par” quality of information provided alongside the bill.

‘Not good enough’

He said the minister wrote to the committee in October to confirm the total cost of the bill at £429m to £455m, a full three months after giving evidence.

“Although we are grateful for the clarification, this approach is simply not good enough,” said the committee chair who raised concerns about “fundamental ambiguities”.

Buffy Williams warned the bill makes it easier for councils to place children out of county.

The Labour chair of the children’s committee explained councils would be required to find accommodation “within or near to” the area rather than the current “must be within”.

She said: “We have significant concerns about this proposal…. Given the critical shortage of quality placements, we fear these provisions will mean that children are inevitably placed further away from their homes.”

‘Demonising’

Altaf Hussain, the Conservatives’ shadow social care minister, said the bill has admirable intentions but he warned of unintended consequences.

“This bill could lead to a huge decline in the care of looked-after children,” he said.

Dr Hussain told the Senedd seven councils in Wales provide no care at all, “so the private sector is the only game in town”, as he criticised ministers for “demonising” providers.

Mabon ap Gwynfor, Plaid Cymru’s shadow health secretary, backed the aims of the bill which was part of his party’s now-collapsed cooperation deal with the Welsh Government.

He said £3 for every £10 spent on foster care in Wales is going into the pockets of shareholders rather than being reinvested in improving the quality of services.

‘Elimination’

Mike Hedges, who chairs the legislation committee, was concerned that details of the bill’s impact on key issues such as human rights were not published in time for scrutiny.

“The lack of timely information from the government was a theme of our findings,” he said.

Mr Hedges criticised potentially misleading Welsh Government statements about the “elimination” of private profit from the care of looked-after children.

He clarified that the bill would restrict, rather than eliminate, profit.

Mr Hedges also raised concerns about the lack of an end date for transitional arrangements.

His Labour colleague Joyce Watson called for a national register of foster carers.

‘Dysfunctional’

Jane Dodds, a former social care worker who is the Liberal Democrats’ leader in Wales, described the current system as dysfunctional.

She said: “If we think about it, we are paying our council tax; that goes straight into the shareholders’ pockets and it doesn’t meet the needs of those really vulnerable children.”

Ms Dodds urged ministers to avoid pitfalls from the experience in Scotland, where a study showed councils spent £218m on for-profit care despite a similar commitment in 2020.

Following the debate on October 22, Senedd members backed the bill, 37-14, with Labour, Plaid Cymru and Ms Dodds in favour while the Conservatives voted against.

The bill now moves on to the second of four stages in the Senedd law-making process, which will see the health committee consider detailed amendments.