Wales ICHA Press Release – CMA report response (10 Mar 2022)

Media Release:  ICHA Resonse to the Competition & Markets Authority (CMA) Report for Wales

18th March 2022

The following is ICHA’s initial response to the Competition and Markets Authority (CMA) report for Wales, that provides factual and analytical background to the current situation in the children’s care sector. 

ICHA support the findings from the report which make clear how the children's social care sector, including children’s homes, must improve to be able to care for the most in need children and young people.  

The CMA report comes at a critical juncture for children’s social care in Wales.  The Welsh Government has made the decision to eliminate profit-making companies from children’s care services over the Senedd term.  This means that local authorities may lose up to 77% of current placements, which local authorities will have to replace.  ICHA is currently supporting providers to develop damage-limitation strategies, aiming to ensure the planned policy does not destroy the businesses that many Welsh SMEs have worked tirelessly to build over many years. 

The CMA report rightly highlighted that there are insufficient placements available in children’s homes, particularly for children with complex needs. However, it is critical that it is acknowledged that this issue is predominantly caused by insufficient workforce, not physical homes.  At a time of such pressure on the system, we are concerned by the decision by the Welsh Government to introduce legislation that will significantly reduce the number of homes available for children.  The CMA agreed, stating:

Turning first to children’s homes, as discussed above, we did not find evidence that providing local authority placements was any less costly to local authorities than purchasing placements from private providers. Given the current high level of reliance on private provision in Wales, it is clear that there will be a need for new investment in capacity, to meet new needs or to replace capacity otherwise leaving the market. Banning private provision or taking measures that directly limit prices or profits (which may deter entry or encourage exit of private providers), would entail a commitment to significant investment in capacity by the public sector. Our assessment is that such a ban or profit cap is not necessary to deliver a well-functioning placements market. (Para 55)

We urge the Welsh Government to ensure due consideration is given to this warning by the CMA.

The CMA report also highlighted the necessity to improve our understanding of the needs of children and young people.  This will improve the ability to match the needs of the child to a suitable service, and it will improve the ability of local authorities to plan for future need.  To address this ICHA have been working with multiple stakeholders to introduce the Child and Adolescent Needs and Strengths (CANS) assessment to improve understanding of needs, local authority forecasting and sufficiency strategies.

We believe that the CMA rightly focused on commissioning and regulation as key areas impacting sufficiency, particularly in relation to the need for granular data to inform the development of new provision and improve providers’ confidence to accept children with complex needs.

The CMA also provided key messages for government to address issues with Planning Permission policy for children’s homes.  This will become a pertinent issue for local authorities, as they open up new homes to replace those in the independent sector.  The current, often toxic, attitude toward new children’s homes is not conducive with creating healthy communities for children living in homes.

We believe an opportunity to investigate the demand side of the market equation was missed. There are currently a record number of children in care. The most sensible strategy to reduce the expenditure on children in care is to reduce the number of children coming in to care. However, this will require significant investment in Social Work and a reversal of cuts to local authority budgets.

We recognise the need for improvement in areas identified by the CMA and as the membership body for children’s homes in Wales, we are systematically addressing these with our members and through our work with stakeholders.  Our actions include:

·         Undertaking a national workforce development program including, for the first time ever, a national recruitment campaign.

·         Establishing a national programme of training and development for all levels of staff working in children’s homes.

·         Identifying where regulation related to qualifications can be changed to improve the skills and competencies of the children’s homes workforce.

We recognise the tension that exists between the Welsh Government’s manifesto pledge to remove profit from children’s services and the significant investment required for government funded residential services. This will create sufficiency challenges in the short-term, but ICHA will work hard to minimise the harm to children during this transition.


For comment or interview please contact Peter Sandiford, CEO of the Independent Children’s Homes Association (ICHA)

07597 982533




The Independent Children’s Homes Association Ltd (ICHA)  is the voice of providers of residential child care services and resources across England and Wales. We are a Not-for-Profit Limited Company.

ICHA represents both large and small providers with membership drawn from the public, private and voluntary sectors.  Some members have just one home whilst others have many homes across a wide geographic area.


We provide knowledge, expert guidance, resources and day-to-day support to our members as we work together to deliver exemplary residential child care.

We work directly with local and national government, regulators and allied public services, consulting on policy and changes within the sector. We ensure that the voices of our members are heard, through consultations, government responses and liaison with the media.

We actively develop partnerships, collaborations and professional communities to share best practice - for the benefit of our members, the sector and all those cared for within it.


Exemplary residential child care

Drive excellence in residential child care through innovation, collaboration and sector leadership.


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