Removing profit from children’s care

The changes brought about by the 2025 Act will be implemented in phases:

From 1 April 2026

No new for-profit providers. The following restrictions now apply:

• New for-profit providers of restricted children’s services (children’s care homes, fostering agencies, and secure accommodation) are not able to register with CIW.
• Existing for-profit providers of restricted children’s services are not able to vary their registration to add another restricted children’s service or place.
• Anyone wishing to register a restricted children’s service must be registered as one of these four business models, approved by Welsh Government:
  • A charitable company limited by guarantee without share capital
  • A charitable incorporated organisation
  • A charitable registered society
  • A community interest company limited by guarantee without a share capital

From 1 April 2027

No expansion of existing for-profit provision. The following restrictions will apply:

• Existing for-profit providers will no longer be able to increase their maximum capacity
• Fostering agencies will no longer be able to approve new foster carers

From 1 April 2030

Restrictions on placements in existing for-profit provision. The following restrictions will apply:

• Children cannot be placed into the care of a for-profit organisation in Wales by an English local authority except in exceptional circumstances (to be outlined in the regulations)
• Welsh local authorities will only be able to place children in an existing for-profit service in Wales with the agreement of Welsh Ministers via the supplementary placement process outlined in the Act
• Welsh local authorities must obtain Ministerial approval through the supplementary placements process before making any new placements in fostering, residential, or secure accommodation in England, except where the placement is within local authority-run provision.

We will play a key role in supporting the implementation of this legislation. We are here to help you understand what the changes mean for your service.

We can provide advice and guidance to providers on how the legislation will apply to them.

If you have any questions about how the changes may affect your service, please don’t hesitate to contact CIW@gov.wales.

From 1 April 2026, a new 'Change of Legal Entity' variation is available in your CIW Online account. This form is for existing for-profit providers who wish to re-establish their service as one of the four approved not-for-profit models.

The form is designed to reduce the burden on already-registered services. Rather than submitting a full new application, you will only need to provide information about your change of business model, responsible individual and confirm your organisation's objects and purposes.

You can begin the process of re-establishing as a not-for-profit entity at any time. There is no deadline for using the ‘Change of Legal Entity’ form.

On 1 April 2026, the information displayed about your service on the CIW Service Directory was updated to reflect the new requirements introduced by the Health and Social Care (Wales) Act 2025 [external link].

Declaration for all restricted children's services

All providers of restricted children's services now have the following declaration added to their service records on the CIW Service Directory: 'This is a restricted children's service.'

Compliance statement

In addition to the declaration above, your provider record now shows one of the following two statements, depending on your registration status:

1. ''This provider applied to register before 1 April 2026 and, therefore in respect of their existing restricted children’s services, is not subject to the requirement in  section 6A(1) of the Regulation and Inspection of Social Care (Wales) Act 2016, as amended by the Health and Social Care (Wales) Act 2025.'
2. 'This provider has demonstrated compliance with the requirements in section 6A(1) of the Regulation and Inspection of Social Care (Wales) Act 2016, as amended by the Health and Social Care (Wales) Act 2025.'

New standard condition for not-for-profit providers

Not-for-profit providers of restricted children's services now have a new standard condition placed on their registration. This condition requires these providers to notify Welsh Ministers if their circumstances change and they no longer meet the not-for-profit requirements under section 6A(1) of the Regulation and Inspection of Social Care (Wales) Act 2016, [external link] as amended by the Health and Social Care (Wales) Act 2025 [external link] .

Cwmpas

If you're considering re-establishing as a not-for-profit business model, we recommend contacting Cwmpas [external link] for advice.