Financial transparency and profit limitation in children's residential care
Overview
This consultation relates to provisions made in the Children and Young People (Care and Services Planning) (Scotland) Bill, which was introduced to Parliament on 17 June 2025. The legislation is being developed in order to meet the commitments made in The Promise, and to ensure that excessive profits are not being gained through the care of children is an important section of this work.
The Promise is clear that there is no place for profiting in how Scotland cares for its children and that Scotland must avoid the monetisation of the care of children and prevent the marketisation of care by 2030. To align with this and uphold the principles of the Promise, the Bill enables the Scottish Ministers through regulations to enhance financial transparency by requiring certain residential childcare providers to provide financial and other relevant information about the operation of their services. In addition, should it be determined that excessive profits are being made, Scottish Ministers also have enabling powers through this Bill to make further regulations to limit profit being made from children’s residential care. This seeks to ensure that excessive levels of profit are not made from local authorities and from finite public funds, in relation to the provision of accommodation and services for vulnerable looked after children in Scotland.
The Children and Young People (Care and Services Planning) (Scotland) Bill is currently being considered by the Scottish Parliament and all of the measures that it proposes will be subject to Parliament’s Agreement. Should Parliament approve the Bill, the Scottish Government will produce Regulations in relation to financial transparency and, subject to those, may make further regulations in relation to limitation of profits in relation to children’s residential care. These Regulations would be subject to further public consultation and parliamentary scrutiny before they would come into law.
Read the consultation paper. The consultation paper contains full background information for this consultation. You may find it useful to read or refer to while responding.
Consultation questions preview
The consultation questions are included here for your reference. Please click 'Begin consultation' at the bottom of this page to proceed.
Q1: Do you agree that the provisions outlined should cover both children’s residential care home services and residential schools provided by persons other than a local authority? Y/N
Can you give reasons for this?
Q2: Do you agree that both Not-for-Profit and Private services should be included in these proposals?
Is there anyone else we would need to capture?
Can you give reasons for this?
Q3: Should the Bill provisions also cover other services such as secure care? Y/N
Can you give reasons for this?
Q4: Do you agree with the proposal to increase financial transparency? Y/N
Could you give you reasons for this response?
Q5: What implications will financial transparency have on the different types and sizes of residential children’s homes?
Q6: How could we minimise any negative impacts you have outlined above?
Q7: In order to cause the least impact to businesses, what format do you believe the financial transparency request should take? i.e. audited annual accounts or a more detailed version of the information captured in forms such as those provided to SXL or CI.
Q8: What explanatory information would you want to provide alongside the financial information collected to demonstrate the ways in which the finances are structured? (i.e. additional funds being saved to open a new home)
Q9: Do you agree that the information should be provided at individual service level, provider level and at parent/associated company level?
Can you please explain your answer?
Q10: Is there any additional information that the Scottish Government should be collecting that is not included in the proposal above?
Q11: Would it be useful to use the financial information collected to watch for potential market failure? Y/N
Can you give reasons for this?
Q12: Do you agree with the proposed measures outlined above? Y/N
Could you please explain your reasons for your answer?
Q13: How would you define profit for these purposes?
Q14: Could this impact a residential childcare service’s ability to meet their aims/function and objectives?
Q15: What challenges would services face in trying to reduce profit/surplus and how could this be supported?
Q16: What impacts could these provisions have, both positive and negative, on providing the best care for Children and Young People?
Q17: Do you have any comments on the partial Business and Regulatory Impact Assessment?
Q18: Do you have any other comments on the residential childcare proposals in the Children and Young People (Care and Services Planning) (Scotland) Bill?
(Policy teams please add a copy of your questions here as plain text with no response options. Then delete this text in the brackets.)
Useful information about responding to this consultation
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