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PART 1SOCIAL CARE

CHAPTER 1PROVISION OF SOCIAL CARE SERVICES TO CHILDREN: RESTRICTIONS ON PROFIT

Regulation of social care services provided to children

6Fit and proper person: relevant considerations

(1)The 2016 Act is amended as follows.

(2)In section 9(7), after paragraph (d) insert—

“(e)where the person is a service provider that—

(i)is registered in respect of a restricted children’s service, and

(ii)is subject to the requirement in section 6A(1),

whether it appears to the Welsh Ministers that the provider has entered into a financial arrangement that falls within section 9A.”

(3)After section 9 insert—

“9AFit and proper person test: financial arrangements relating to restricted children’s services

(1)For the purposes of the fit and proper person test in section 9, a financial arrangement falls within this section if it is an arrangement with or for the benefit of a relevant person that—

(a)is unreasonable or disproportionate in all of the circumstances, and

(b)(in consequence) may undermine the service provider’s pursuit of its objects or purposes (as‍ to which, see section 6A(3)).

(2)When determining whether such a financial arrangement has been entered into, regard must be had to—

(a)the size or value of the arrangement and its purpose (including the extent to which it relates to the provision of the restricted children’s service);

(b)the size or value of the arrangement relative to the amount of income the service provider receives from providing the restricted children’s service;

(c)the proportion of the service provider’s total income that comes from providing the restricted children’s service;

(d)the well-being of children who receive care and support (in the provision of the restricted children’s service).

(3)For the purposes of section 9(7)(e) and this section—

(a)“entering into a financial arrangement” includes but is not limited to making a payment or awarding any benefit (direct or indirect) that has monetary value (and references to a financial arrangement are to be read as including a series of arrangements);

(b)“relevant person” means any of the following—

(i)an employee, worker or officer of the service provider;

(ii)a person connected to an employee, worker or officer of the service provider;

(iii)where the service provider is part of a group of persons under common ownership or common control, any person within that group.

9BFinancial arrangements relating to restricted children’s services: supplementary provision

(1)In section 9A(3)(b)—

(a)“employee” and “worker” have the meanings given by section 230 of the Employment Rights Act 1996 (c. 18);

(b)an “officer” means—

(i)any director, manager, secretary or other similar officer of the service provider (and, in relation to a service provider whose affairs are managed by its members, “director” means a member of the service provider);

(ii)any other person having the general control and management of the service provider,

and, where the service provider is a charity, this includes any charity trustee within the meaning of the Charities Acts.

(2)For the purposes of section 9A(3)(b), the following are connected to an employee, worker or officer of the service provider—

(a)their child, parent, grandchild, grandparent, brother or sister;

(b)their spouse or civil partner;

(c)a person carrying on business in partnership with them or with any person falling within paragraph (a) or (b);

(d)an institution which is controlled—

(i)by them or by any person falling within paragraph (a), (b) or (c), or

(ii)by two or more persons falling within sub-paragraph (i), when taken together;

(e)a body corporate in which—

(i)the person or any connected person falling within any of paragraphs (a) to (c) has a substantial interest, or

(ii)two or more persons falling within sub-paragraph (i), when taken together, have a substantial interest.

(3)In subsection (2)—

(a)“child” includes a stepchild;

(b)where two people are not married to, or civil partners of, each other but live together as if they were a married couple or civil partners, each of them is to be treated as the spouse or civil partner of the other;

(c)“institution” has the meaning given by section 9(3) of the Charities Act 2011 and a person controls an institution if the person is able, directly or indirectly, to secure that the affairs of the institution are conducted in accordance with the person’s wishes;

(d)references to having a “substantial interest in a body corporate” have the meaning given by section 352 of the Charities Act 2011.

(4)For the purposes of section 9A(3)(b)(iii), a group of persons is to be treated as being under common control if the group—

(a)is a group of interconnected bodies corporate,

(b)consists of bodies corporate of which one and the same person or group of persons has control, or

(c)consists of one or more bodies corporate and a person who, or a group of persons which, has control of that or those bodies corporate.

(5)In subsection (4), a “group of interconnected bodies corporate” means a group consisting of two or more bodies corporate all of which are interconnected with each other.

(6)For the purposes of subsection (5), any two bodies corporate are interconnected if—

(a)one of them is a body corporate of which the other is a subsidiary, or

(b)both of them are subsidiaries of one and the same body corporate (and “interconnected bodies corporate” is to be construed accordingly).

(7)For the purposes of subsection (4)(b) and (c), a person or group of persons controls a body corporate if the person or group of persons is able, directly or indirectly, to secure that the affairs of the body corporate are conducted in accordance with the wishes of the person or group of persons.

(8)In this section—