Children’s Homes Association now excludes tax havens
Change in membership criteria for CHA requires residential childcare organisations to be ultimately owned in the UK, with all or majority of shareholders registered as UK taxpayers.
The Children’s Homes Association (CHA) is the membership body for children’s homes in England Wales. It comprises and represents residential childcare providers across the public, private and independent sectors. But, as of this week, it will no longer include ‘organisations with corporate structures involving tax havens’.
Photo by Vitolda Klein
Most children’s homes in England and Wales are small, specialised services that seek to offer transformative benefits to the young people in their care, and are run by the independent, for-profit sector who operate just one or a small number of homes. In a statement, the CHA says that it continues to ‘believe in the importance and value of a mixed economy of children’s social care which includes public, charity, and independent for-profit provision.
‘However, we must always remember that taxes fund children’s social care and therefore, a healthy mixed economy of providers requires transparent and ethical business models. We believe that organisations which deliver social care should contribute to the tax-funded care system that pays them.’
The CHA says it has had to change its rules in response to mounting concerns about the development of corporate structures within a small number of very large organisations offering provision. The purchaser/provider model that has long been in use was established through the NHS and Community Care Act 1990. But in establishing that model, it was never anticipated that providers of such care, who are funded by taxation and then make a profit, would not pay tax on such profit themselves. This, says the statement, risks ‘funds drained from the country and care system.’
Following a review of the sector, the CHA has changed its membership rules as of April 6, 2024. From that date, to qualify as a member of the CHA, organisations much meet three conditions:
- Be ultimately owned in the UK
- Have wholly or majority shareholders who are registered as a UK taxpayer
- Not receive loans or investments that originate from a tax haven
Dr Mark Kerr, Interim CEO of the CHA, says: ‘We believe in the importance and value of a mixed economy of children’s social care which relies on public, charity, and independent for-profit provision.
‘Most people do not realise that the private sector in residential childcare is itself diverse and varied including mostly small providers who run just one children’s home, right through to medium-sized and larger providers who run multiple homes. An amazing range of specialist expertise exists in the sector and the continuation of investment from private organisations is vital to ensuring the right care is available for our society’s most vulnerable children.
‘However, we are also committed to social value and believe that organisations delivering tax-funded care services should fairly contribute to the system that makes care possible in the first place. This significant change in our membership criteria reflects our commitment to social value and most importantly to a secure and stable care system for our society’s most vulnerable.’
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