Financial Transparency and Profit Limitation in Children's Residential Care: business and regulatory impact assessment

Section 3: Costs, impacts and benefits

3.1 Quantified costs to businesses

Although Scotland Excel hold some information from services, we do not have current data on the operational costs of residential childcare services in Scotland that would allow for an accurate prediction of the cost of implementing the proposed financial transparency measures. We are aware that there may be costs associated with providing further financial information and are seeking to mitigate this as far as possible. An important part of our consultation is to develop our understanding here. This will include working with providers to establish costs.

3.2 Other impacts

A risk was flagged that these provisions could cause an unintended consequence of business concern that the Scottish Government is seeking to ban profit in residential childcare altogether, or to restrict profit across the wider social care sector. We have been clear that the provisions in the Bill apply solely to increasing financial transparency and tackling excessive profit in residential childcare, and not for instance to the wider adult social care sector.

3.3 Benefits to business

Increased financial transparency will allow providers to set out their costs clearly. This will support them to demonstrate their value for money as providers and clearly set out their reasoning for fee uplifts when needed.

3.4 Small business impacts

We are aware that there may be greater challenges to a small business when there are increased asks for reporting. We wish to reduce these impacts as far as practicable by aligning where possible with existing Care Inspectorate and Scotland Excel requirements.