The Welsh Government has made a policy commitment to transform social services in Wales for children who are looked after. This includes the removal of private profit from the system of commissioning and procurement by which local authorities find placements for the children in their care.
ADSS Cymru members believe the care of children who are looked after should be driven by their best interests, needs, and rights, rather than by financial motives or market forces, and we welcome Welsh Government's commitment.
We are working together to respond to the legislative changes following the enactment of the Health and Social Care (Wales) Act in March 2025.
Local authorities in Wales have commissioned services from a wide range of providers for many years, including from the private and voluntary sector. We work hard to find the best placement for every child, but it’s becoming more and more difficult to find placements which match children’s needs. There is a shortage of suitable homes, particularly for children who need high levels of support.
In a market economy with a shortage of supply, providers have an opportunity to profiteer, and we have seen recent instances of private equity-backed providers taking this opportunity.
Profiteering is defined as an organisation’s intentional decision to take unfair advantage of a situation to increase profit levels by increasing price disproportionately to evidenced costs and extracting that money from the core business for shareholders, and/or directors and/or owners.
ADSS Cymru believes this is unacceptable. Providers who disproportionately raise the price of their services to create financial returns which are not invested back into the care of children here in Wales will not have a place in our future plans for service commissioning and provision.
We are working in a concerted and joined-up way to ensure the opportunities presented by this landmark law are fulfilled and that profiteering is not tolerated.
As we respond to the legislative changes, we look forward to working in collaborative and transparent ways with not-for-profit providers who share our values and our commitment to putting the best interests of children first.