Children’s Wellbeing and Schools Bill: Regional Care Co-operatives Legislative Analysis

The Children’s Wellbeing and Schools Bill 2024–25 heralds a fundamental shift in England’s children’s social care by introducing Regional Care Co-operatives (RCCs) as a central mechanism to address a system widely deemed “broken.” From soaring placement costs and a chronic shortage of specialist homes to growing distance placements that sever children’s ties to family and community, the existing market-based model has consistently failed to deliver stability, quality or value for money.

This Bill comes on the back of the Independent Review of Children’s Social Care (the “MacAlister Review”), which in May 2022 exposed how individual local authorities, left to compete in an unregulated market, lack the scale and bargaining power needed to secure suitable placements—particularly for children with complex needs. The report warned that, without radical reform, annual children’s care costs could soar from £10 billion to £15 billion by 2032, with the care population rising concurrently.

Against this backdrop, RCCs are positioned as the “radical reset” of commissioning: pooling local authorities’ demand and enabling publicly-led provision at scale. While stakeholder debates often refer to these powers under “Clause 10,” detailed examination of the Bill’s Explanatory Notes confirms that it is Clause 9 which amends the Children Act 1989 to empower the Secretary of State to direct regional co-operation arrangements for looked-after accommodation.

This section sets the scene for why RCCs have emerged as the government’s flagship solution, paving the way for a deeper dive into their legal architecture, operational design and implementation pathway.

2. The Mandate for Change: Why Regional Care Co-operatives, Why Now?

England’s children’s social care system has long been described as “broken,” with three interlocking crises driving the need for radical reform:

• Placement Sufficiency Crisis: Local authorities (LAs) are unable to secure enough high-quality homes—especially specialist placements for children with complex needs—resulting in many young people living far from family, school and support networks.
• Financial Crisis: Competition for scarce placements has driven costs sky-high. Without structural change, the Independent Review warned that annual children’s social care expenditure could rise from £10 billion to £15 billion by 2032, threatening the sustainability of the entire system.
• Market-Confidence Crisis: A handful of private equity–backed providers dominate the sector, creating perverse incentives where placement decisions can be driven by profitability rather than children’s best interests.

Against this backdrop, Josh MacAlister’s Independent Review of Children’s Social Care (May 2022) delivered a damning verdict on the market-based model. Its key findings included:

• Lack of Scale: Small-scale commissioning left LAs as “price-takers,” unable to influence market supply or quality.
• Geographic Dislocation: A significant and growing number of looked-after children were placed dozens of miles from home—severing critical social ties and undermining stability.
• Profit Over Provision: Private providers were prioritising lucrative placements, often at the expense of matching children to the homes best suited to their needs.

The review’s solution: Regional Care Co-operatives (RCCs)—publicly-led bodies pooling LA demand and commissioning power at scale, with an explicit duty to develop and deliver their own fostering, residential and secure accommodation alongside commissioning from the wider market.

2.1 From Review to Policy: “Stable Homes, Built on Love”

In February 2023, the government’s Stable Homes, Built on Love implementation strategy formally adopted the RCC proposal as a policy priority. Rather than an immediate nationwide rollout, two pathfinder regions—Greater Manchester and an 18-LA consortium in the South East—were selected to co-design, test and refine the model before national expansion. This phased approach aims to balance the urgency of reform with the need for local adaptation and learning.

2.2 Political Momentum & the Children’s Wellbeing and Schools Bill

The legislative vehicle to cement RCCs in statute is the Children’s Wellbeing and Schools Bill 2024–25. Embedding RCCs within primary legislation represents a significant escalation in the government’s reform agenda, signalling a shift from voluntary collaboration to mandated regional commissioning. While the Bill spans wide social care reforms, Clause 9 (not Clause 10 as sometimes misreported) specifically empowers the Secretary of State to direct LAs into “regional co-operation arrangements” for looked-after accommodation—ushering in the most ambitious restructuring of children’s social care governance in a generation.

3. Legal Architecture: New Powers & Duties under the Bill

The Children’s Wellbeing and Schools Bill embeds the RCC model in primary legislation, creating a powerful legal framework that shifts the balance of commissioning authority from individual local authorities to mandated regional bodies.

3.1 Clause 9 “Duty to Cooperate” Explained

Text of the Power: Clause 9 amends the Children Act 1989 to grant the Secretary of State authority to issue a “direction” requiring two or more local authorities to enter into regional co-operation arrangements for carrying out their functions in relation to the provision, commissioning and sufficiency of accommodation for looked-after children.

Structural Models: The Bill offers three permitted governance models for RCCs:

• Joint Model: Constituent LAs discharge functions through a joint committee or shared service arrangement.
• Lead Authority Model: One LA is appointed to perform specified functions on behalf of the group.
• Separate Corporate Body: A new legal entity (e.g., a public service mutual or LA-owned company) carries out the functions.

Importantly, these arrangements cover strategic commissioning only; individual case management and social work responsibilities remain with each child’s “home” authority.

3.2 Power of Direction: Centralising vs Localism

The introduction of a statutory direction represents a marked departure from previous voluntary collaboration initiatives. Stakeholders have raised concerns about the centralisation of power inherent in this mechanism, likening it to a “Henry VIII-style” executive tool that could override local democratic control.

• Local Government Association (LGA) Position: The LGA has called for clear criteria governing when and how the Secretary of State may issue or revoke a direction, to safeguard local accountability and consent .
• Tension at the Heart of RCCs: While RCCs seek to “take back control” from private markets, the power to mandate their creation lies firmly with central government—a paradox that may fuel friction unless exercised collaboratively.

3.3 Compliance & Sanctions: The Unspoken Teeth

Although the Bill does not specify bespoke financial penalties for non-compliance, statutory directions are legally binding. A refusal by an LA to comply would constitute unlawful action, exposing the authority to judicial review. The courts can then issue a mandatory order compelling the LA to implement the direction.

• Judicial Review as an Enforcement Tool: Under established public law principles, the High Court’s power to grant mandatory relief (formerly mandamus) gives the Secretary of State effective “teeth” to enforce RCC formation.
• Contrast with Existing Interventions: Historically, central intervention in failing children’s services relied on performance monitoring, Ofsted special measures or the appointment of a commissioner. Clause 9 introduces a direct legal command that bypasses those softer oversight mechanisms.

4. Operational Blueprint: Commissioning, Funding & Accountability

This section examines how Regional Care Co-operatives (RCCs) will reshape the practical delivery of children’s home placements by transforming commissioning, creating new funding models and redefining accountability structures.

4.1 A New Commissioning Landscape

RCCs aggregate the placement needs of multiple LAs, creating a single regional commissioning body with enhanced “market-shaping” power. By pooling demand, RCCs can:

• Leverage Scale: Negotiate better rates and quality standards with providers, reducing the “price-taker” problem faced by individual LAs.
• Forecast Regional Need: Use richer, region-wide data to plan specialist provision for low-incidence cohorts (e.g., children with complex behavioural or health needs).
• Stimulate Public Provision: Invest directly in new publicly-led homes and foster services where market provision is insufficient.

However, stakeholders warn that regional procurement could inadvertently prioritise large national providers over smaller, local charities and not-for-profits, risking market homogenisation and reduced local responsiveness.

4.2 Funding the RCCs: From Seed Grants to Cost-Sharing

The government has provided pathfinder funding to kick-start RCCs:

• Programme Grants: The South East and Greater Manchester pilots received ~£3.46 million each for 2024–26 to develop regional infrastructure.
• Capital Funding: Up to £5 million per pathfinder to expand or retrofit specialist accommodation.

Long-term sustainability will depend on a cost-sharing formula among member LAs. In the South East model, contributions are banded (from £50,000 to £300,000 annually) based on three-year averages of each authority’s looked-after population. Greater Manchester leverages existing Combined Authority funding arrangements under the GMCA to underpin its RCC.

This shift introduces financial fragility risks: authorities under budgetary strain may struggle to meet subscription payments, potentially destabilising regional budgets. Robust risk-pooling arrangements or a central “financial backstop” may be required to mitigate this.

4.3 Accountability & the Democratic Deficit

Regionalisation creates new challenges for democratic oversight and multi-agency collaboration:

• Governance Models:
  • Public Service Mutual (South East): Operates at arm’s length with a multi-stakeholder board to preserve collective ownership and local input.
  • Combined Authority Integration (GM): Embeds RCC functions within the GMCA’s existing political structures, retaining direct elected accountability.
• Regulatory Oversight: Ofsted is developing a bespoke inspection framework for RCCs to assess regional sufficiency, placement quality and commissioning effectiveness.
• Multi-Agency Partnership: The success of RCCs hinges on strategic engagement with Integrated Care Boards (ICBs) and youth justice services. The House of Lords debate on Amendment 107D highlighted sector concerns that without formal ICB involvement, RCCs cannot meet complex health and behavioural needs.

Balancing enhanced commissioning power with transparent, locally-anchored governance will be critical to ensuring RCCs deliver on their promise without creating a “democratic deficit.”

5. Path to Implementation: Timetable, Pilots & Key Debates

5.1 Legislative Roadmap to Royal Assent and Commencement

• House of Lords Committee Stage: Completed June 2025.
• Report Stage & Third Reading: Scheduled for Autumn 2025, with “ping-pong” between Houses likely to conclude by year end.
• Royal Assent: Anticipated late 2025 or early 2026.
• Secondary Legislation & Guidance: Following assent, a public consultation on detailed statutory guidance will run for several months, meaning the Secretary of State’s direction powers under Clause 9 are unlikely to be exercised before mid-2026.

5.2 Pathfinder Lessons: Greater Manchester & South East

• Greater Manchester RCC: Builds on GMCA’s existing collaborative infrastructure (e.g., Project Skyline), leveraging Combined Authority funding and governance. Early indicators show improved data-sharing protocols and joint procurement frameworks, though integration with health services remains a work in progress.
• South East RCC: Formed as a Public Service Mutual with 18 member LAs. Its bespoke regional data platform provides real-time sufficiency dashboards, and its cost-sharing formula—banded contributions linked to looked-after populations—offers a transparent model for others to emulate.

5.3 A Contested Consensus: Synthesising Stakeholder Views

• Local Government Association (LGA): Supports the principle of regional collaboration but demands clear criteria for issuing or revoking directions and guarantees of new burdens funding to protect LA budgets.
• Association of Directors of Children’s Services (ADCS): Calls for a flexible commissioning framework that allows different services to be organised at the most appropriate geographic level, warning against a one-size-fits-all approach.
• Children’s Charities (e.g., Barnardo’s, The Children’s Society): Welcome RCC ambitions but insist on statutory safeguards to keep children close to home and robust mechanisms to involve care-experienced voices in governance.

6. Conclusion & Strategic Recommendations

The establishment of Regional Care Co-operatives (RCCs) under the Children’s Wellbeing and Schools Bill represents the most ambitious restructuring of England’s children’s social care system in a generation. By mandating regional collaboration, the Bill seeks to overcome the placement sufficiency, financial and market‐confidence crises identified by the MacAlister Review and enshrined in the Stable Homes, Built on Love strategy. Yet, as this analysis has shown, the success of RCCs hinges on navigating complex tensions between central direction and local autonomy, securing sustainable funding, and embedding robust governance and multi‐agency partnership.

Strategic Recommendations

For the Department for Education

1. Embrace Collaborative Implementation:
   • Use the statutory power of direction as a supportive tool, not a coercive one.
   • Mirror the Regional Adoption Agencies rollout: provide tailored support to regions rather than imposing a single blueprint.
2. Ensure a Flexible National Framework:
   • Draft statutory guidance that explicitly allows regions to choose from multiple commissioning models (joint, lead authority, corporate body).
   • Build in clear provisions for sub-regional or service-specific collaboration, as urged by the ADCS.
3. Secure a Sustainable Funding Settlement:
   • Work with HM Treasury to establish a ring-fenced, multi-year funding package that covers both start-up and ongoing “new burdens” for RCC infrastructure.
   • Include a central financial backstop or risk-pooling mechanism to protect regions from member authority shortfalls.

For Local Authorities & Pathfinder RCCs

1. Tackle the “Democratic Deficit”:
   • Develop transparent governance structures with clear roles for elected members from each constituent LA.
   • Institute regular public reporting and scrutiny panels to maintain community confidence.
2. Embed Lived Experience:
   • Co-design RCC boards and oversight mechanisms with care-experienced young people and independent advocates.
   • Ensure outcome measures reflect the perspectives of children and families.
3. Prioritise “Local First”:
   • Enshrine in RCC commissioning principles a statutory duty to keep children as close to home, family and school as possible, in line with s.22C Children Act 1989.

For Ofsted & Partner Agencies (Health, Justice)

1. Develop an Outcomes-Focused Inspection Framework:
   • Co-create the RCC inspection regime with sector stakeholders, emphasising placement quality and child outcomes over process metrics.
2. Commit to Strategic Partnership:
   • Formalise joint leadership groups with Integrated Care Boards and Youth Justice partners, including pooled budget pilots for children with complex health and behavioural needs.
   • Share data and co-commission therapeutic and residential pathways to ensure holistic support.

By adopting these recommendations, the Department for Education can harness the will for change identified in the MacAlister Review, local authorities can retain democratic accountability and operational agility, and partner agencies can ensure genuinely integrated care. Together, these steps will maximise the potential of Regional Care Co-operatives to deliver stable, high-quality placements that serve the best interests of England’s most vulnerable children.

Welcare’s Implementation Roadmap

Building on the strategic recommendations, Welcare is uniquely positioned to translate the Children’s Wellbeing and Schools Bill reforms into practice across our network of homes and regional partnerships:

• Establishing Regional Partnerships: We will convene steering groups in our catchment regions—aligning with emerging RCC pathfinders—to co-design local commissioning arrangements. By engaging elected members, health partners and care-experienced advisors from the outset, Welcare will help shape joint committees or public service mutual structures that reflect each area’s needs.

• Embedding “Local First” Principles: Guided by Section 22C of the Children Act 1989, every new placement sourced or developed by Welcare will prioritise proximity to home, school and community. Our sufficiency dashboards—aligned with pathfinder data platforms—will continuously monitor travel distances and work with RCCs to address any emerging gaps in local provision.

• Aligning Governance & Accountability: Welcare’s governance board will create a dedicated Children’s Wellbeing Bill implementation sub-committee, chaired by a senior director and including care-experienced young people. This sub-committee will oversee compliance with Clause 9 requirements, scrutinise LA cost-sharing agreements and report quarterly to our main board and local scrutiny panels.

• Securing Sustainable Funding Contributions: In collaboration with local authority finance teams, Welcare will adopt the pathfinder’s tiered contribution model—adjusting our service budgets to provide clear multi-year commitments. We will establish a contingency fund and risk-pooling arrangement with member LAs to safeguard against subscription shortfalls and ensure continuous provision.

• Exceeding Ofsted Quality Standards: Anticipating Ofsted’s new RCC inspection framework, Welcare will audit all homes against emerging sufficiency and quality metrics, integrate findings into our internal quality assurance process, and deliver bespoke training for managers on the Bill’s governance and reporting requirements.

• Partnering for Integrated Care: To meet the specific health and behavioural needs highlighted by Amendment 107D debates, Welcare will formalise data-sharing and joint commissioning protocols with local Integrated Care Boards and youth justice services. We will co-host regional workshops to embed multi-agency collaboration in therapeutic pathways and placement matching.

Through this roadmap, Welcare will not only comply with the Children’s Wellbeing and Schools Bill but lead the sector in delivering child-centred, locally anchored, high-quality care under the new legislative regime.