Commentary on Sections Part 1 .Social Care Chapter 1 .Provision of Social Care Services to Children: Restrictions on Profit Section 6 – Fit and proper person: relevant considerations
30.As further explained in paragraphs 31 to 33, section 6 amends the 2016 Act to provide that unreasonable or disproportionate financial arrangements entered into by a service provider registered in respect of a restricted children’s service are evidence to which the Welsh Ministers must have regard when deciding if the provider is a fit and proper person. (If the Welsh Ministers are no longer satisfied a person is fit and proper, they may cancel the person’s registration – see section 15(1)(b) of the 2016 Act.)
31.Section 9 of the 2016 Act provides that in deciding whether a service provider is a fit and proper person, the Welsh Ministers must have regard to all matters they think appropriate but that they must in particular have regard to evidence of various things including whether the service provider has been responsible for, contributed to, or facilitated misconduct or mismanagement in the provision of a regulated service (see section 9(6)).
32.Section 6(2) amends section 9(7) of the 2016 Act so that it specifies that, when the Welsh Ministers are having regard to evidence of whether a service provider (that is registered in respect of a restricted children’s service) is unfit on the basis of misconduct or mismanagement, they must consider whether the provider has entered into a financial arrangement that falls within new section 9A.
33.Section 6(3) inserts new sections 9A and 9B into the 2016 Act. New section 9A(1) provides that a financial arrangement falls within section 9A if it is an arrangement with or for the benefit of a “relevant person” (defined in section 9B, and including persons such as the provider’s officers and employees) that is unreasonable or disproportionate in all the circumstances and that, in consequence, may undermine the pursuit of the service provider’s objects or purposes (which must, under section 6A(3), primarily relate to children’s welfare or other prescribed public goods). New section 9A(2) sets out matters to which regard must be had when determining whether a financial arrangement of this sort has been entered into.