Children (Care, Care Experience and Services Planning) (Scotland) Act 2026

Prospective

27 Children’s residential care services: profit limitation S

(1) The Public Services Reform (Scotland) Act 2010 is amended as follows.

(2) After section 78G, insert—

“Regulations under section 78: profit limitation in children’s residential care services S

78H Children’s residential care services

(1) The Scottish Ministers—

(a) must exercise the power under section 78(2) to impose on types of person falling within subsection (3), in relation to such time period as is specified in the regulations, an initial information requirement, and

(b) may (subject to section 78I) exercise that power to impose on such types of person—

(i) a profit limitation requirement, and

(ii) a continuing information requirement.

(2) Despite subsection (1)(a), the power under section 78(2) is not to be exercised so as to impose an initial information requirement on a type of person falling within subsection (3) in relation to a period during which a profit limitation requirement applies in relation to that type of person.

(3) A person falls within this subsection if the person—

(a) provides—

(i) a care home service which is provided wholly or mainly to children,

(ii) a school care accommodation service, or

(iii) a secure accommodation service, and

(b) is not a local authority.

(4) Regulations under section 78(2) which impose an initial information requirement or a continuing information requirement on types of person falling within subsection (3) may also impose such a requirement on a parent undertaking or a subsidiary undertaking (within the meaning of section 1162 of the Companies Act 2006) of such types of person.

(5) An initial information requirement is a requirement to provide to the Scottish Ministers such financial and other information as is—

(a) required for the purpose mentioned in subsection (6), and

(b) of a type specified in the regulations.

(6) The purpose is assessing the level of profit made by the types of person falling within subsection (3) from provision of the services mentioned in that subsection in order to inform consideration of—

(a) whether a profit limitation requirement should be imposed, and

(b) if such a requirement is to be imposed, how the requirement should be expressed.

(7) A profit limitation requirement—

(a) is a requirement that any profit made by a type of person falling within subsection (3) from provision of a service mentioned in that subsection must not exceed an amount specified in, or determined in accordance with, the regulations, but

(b) does not apply to a person falling within subsection (3) if the person is a charity.

(8) A continuing information requirement is a requirement to provide to the Scottish Ministers on an annual basis such financial and other information as is—

(a) required for the purposes mentioned in subsection (9), and

(b) of a type specified in the regulations.

(9) The purposes are assessing—

(a) compliance with a profit limitation requirement,

(b) the level of profit made by types of person falling within subsection (3) from provision of the services mentioned in that subsection in order to inform consideration of—

(i) whether a profit limitation requirement should be modified, and

(ii) if such a requirement is to be modified, how the modified requirement should be expressed.

(10) The initial information requirement and the continuing information requirement include power for the Scottish Ministers to require types of person falling within subsection (3), or a parent or subsidiary undertaking mentioned in subsection (4) to whom the requirement applies, to provide to them such additional information in connection with information provided in compliance with those requirements as they consider necessary for the purposes mentioned in subsection (6) or, as the case may be, (9).

(11) Without prejudice to the generality of section 78(2), regulations under that section imposing the requirements mentioned in subsection (1) may specify—

(a) how the level of profit made by types of person falling within subsection (3) from the provision of services mentioned in that subsection is to be determined,

(b) the form in which, and time period within which, information is to be provided to the Scottish Ministers for the purposes of the initial information requirement and the continuing information requirement.

(12) Before imposing (or modifying) a requirement mentioned in subsection (1), the Scottish Ministers must consult—

(a) local authorities,

(b) persons who appear to the Scottish Ministers to represent the interests of persons falling within subsection (3) to whom the requirement would apply,

(c) persons who appear to the Scottish Ministers to represent the interests of any parent or subsidiary undertakings mentioned in subsection (4) to whom the requirement would apply,

(d) such other persons as the Scottish Ministers consider appropriate.

(13) The Scottish Ministers may by regulations modify subsection (3) to add a person, or description of person, as being a person who falls within that subsection.

(14) Before making regulations under subsection (13), the Scottish Ministers must consult such persons as they consider appropriate.

78I Conditions for imposing or modifying profit limitation requirement

(1) The Scottish Ministers may impose (or modify) a profit limitation requirement only—

(a) if satisfied that it is necessary to do so, having regard to the public interest in securing that persons falling within section 78H(3) are providing care on terms which represent value for money, and

(b) after having regard—

(i) where a profit limitation requirement is being imposed for the first time, to the information provided by persons falling within section 78H(3) or parent or subsidiary undertakings mentioned in section 78H(4) in compliance with an initial information requirement,

(ii) otherwise, to the information provided by persons falling within section 78H(3) or parent or subsidiary undertakings mentioned in section 78H(4) in compliance with a continuing information requirement in the period since the profit limitation requirement was first imposed or, as the case may be, last modified.

(2) When considering whether to impose (or modify) a profit limitation requirement, the Scottish Ministers must—

(a) treat the need to safeguard and promote the wellbeing of children being looked after by local authorities as their primary concern,

(b) subject to that, also have regard to—

(i) the interests of local authorities, and

(ii) the interests of persons falling within section 78H(3) (including the opportunity to make a profit).

(3) For the purpose of subsections (1)(a) and (2)(b)(ii), a reference to persons falling within section 78H(3) does not include a reference to persons who are charities.

(4) In this section, “looked after” is to be construed in accordance with section 17 of the Children (Scotland) Act 1995.

78J Enforcement of information and profit limitation requirements

Regulations under section 78(2) may—

(a) require a person to pay a monetary penalty if the person has failed to comply with a requirement mentioned in section 78H(1) to which the person was subject,

(b) make further provision in relation to the monetary penalties mentioned in paragraph (a), including provision as to—

(i) procedures to be followed before such penalties are imposed,

(ii) the level of such penalties,

(iii) the person to whom such penalties are to be paid,

(iv) appeals against the imposition of a requirement to pay such a penalty,

(c) include provision as to the Scottish Ministers informing SCSWIS when a person falling within section 78H(3) has failed to comply with a requirement mentioned in section 78H(1).”.

(3) In section 104 (orders and regulations: procedure), in subsection (2), after “78,” insert “78H(13),”.

(4) In section 105(1) (interpretation of Part 5), in paragraph (c) of the definition of “child”, for “and 78(2A) and (2B)” substitute “, 78(2A) and (2B), 78H(3) and 78I(2)”.

Commencement Information

I1 S. 27 not in force at Royal Assent, see s. 70(2)