Removing profit from children’s care

The legislation will be implemented in phases:

From 1 April 2026

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

• New for-profit providers of restricted children’s services (children’s care homes, fostering agencies, and secure accommodation) will not be able to register with CIW.
• Existing for-profit providers of restricted children’s services will not be 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 will:

• provide advice and guidance to existing RISCA services on how the legislation will apply to them.
• introduce a streamlined registration process for providers who are currently registered and wish to re-register as not-for-profit operations.
• hold advice surgeries later this year, offering direct support and answering your questions about the transition.

If you have any questions about how the changes may affect your service, please don’t hesitate to contact our dedicated CIW – Remove Profit mailbox. 

Please note: In response to feedback from some providers, Welsh Government has decided to adjust the cut-off date to 31 March 2026 in order to allow some additional flexibility to those considering applications to register new services, or those considering varying their registration to add additional services or places.

If you're planning to register or vary your registration to add a restricted children's service or place, you must submit your application to CIW by 31 March 2026.

Applications submitted by 31 March 2026 will be assessed under current legislation. This means your application will not be subject to the new requirements of the Health and Social Care (Wales) Act 2025, which come into force on 1 April 2026.

What happens after 31 March 2026?

From 1 April 2026, new requirements under section 6A of the Act mean that only local authorities and not-for-profit providers can register care homes for children, fostering services, or secure accommodation services. 

If you submit your application after 31 March 2026, it will be assessed under these new requirements.

Get support

If you have any questions or need support, contact us at CIW – Remove Profit mailbox.

The following Welsh Government consultations closed on 8 October 2025:

• Removing profit from children's care [external link]
• Proposed changes to provider annual returns and applications to cancel registration [external link]
• Proposed regulations for direct payments in health and social care [external link]

The consultation responses are currently being reviewed. Details of the outcomes will be published in due course.

Provider Forum Presentation – September 2025

Care Inspectorate Wales recently hosted a forum for providers on the upcoming changes to restricted children’s services. Download the event presentation slides below:

CIW Provider Forum presentation on removing profit from children’s care

Cwmpas

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