In May 2014 we issued an Alert on the DfE's proposals to extend the range of children’s social care functions that local authorities can delegate to third party providers. The finalised Children and Young Persons Act 2008 (Relevant Care Functions) (England) Regulations 2014 (SI 2014/2407) have now been published and came into force on 10 September 2014.

Local authorities can already delegate their social care functions relating to looked after children and care leavers to third parties, under Part 1 of the Children and Young Persons Act 2008. The new regulations now enable them to delegate almost all of their social services functions relating to children, as defined in the Local Authority Social Services Act 1970. They also allow authorities to delegate certain functions under the Children Act 2004 relating to Children's Trust Boards, Children and Young People's Plans, and the duty to cooperate.

Not-for-profit providers

There has been one major change to the draft regulations as a result of the consultation: these functions can now only be delegated to third party providers that operate on a not-for-profit basis. This was added after concerns were raised in the consultation about privatisation and the risk of conflicts of interest. DfE states that the primary policy intention was always to encourage the development of mutuals, voluntary sector partnerships and similar arrangements, and that the finalised regulations now reflect this. It considers that this change should not disrupt any existing plans of local authorities in this area.

DfE also states that the regulations should not prevent an otherwise profit-making company from setting up a separate non-profit making subsidiary to enable them to undertake their children's social care functions. The regulations do not extend the not-for-profit restriction to the functions which may already be delegated under the 2008 Act, nor do they affect local authorities' existing ability to outsource services to profit-making bodies where they may undertake or deliver services, including in relation to the discharge of such functions, but are not carrying out functions on behalf of the local authority.

For a detailed summary of the regulations and their implications for local authorities, see our previous alert Delegation of children's social care functions