Removing profit from children’s care
As Wales moves to remove profit from the care of children looked after, we’re here to support care providers and offer guidance.
The Welsh Government has introduced the Health and Social care (Wales) Act 2025 [external link] which will remove profit from the care of children looked after in Wales. This will affect how some care services are delivered in the future.
You can find full details about the legislation and the transition to a not-for-profit model on the Welsh Government Removing profit from the care of children looked after webpage [external link].
How will the changes be implemented?
The legislation will be implemented in phases:
From 1 April 2026
- No new, for-profit, private providers of restricted children’s services will be allowed to register
- No existing private providers of restricted children’s services will be able to vary their registration to add another restricted children’s service
- Unless they are one of these four 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. Existing for-profit providers will not be able to:
- Increase their maximum capacity
- Approve new foster carers (for fostering agencies)
From 1 April 2030
Restrictions on placements in existing for-profit provision. Children cannot be placed into the care of a for-profit organisation in Wales by and English local authority except in exceptional circumstances (such as a sibling is already in that service). Welsh local authorities will only be able to place children who are looked after in an existing for profit service in Wales with the agreement of Welsh Ministers via a process to be known as a supplementary placement.
How we will support care providers
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.
Additional support
If you're considering transitioning to a not-for-profit business model, we recommend contacting Cwmpas for advice.
Consultation
This July, the Welsh Government will launch a consultation on the regulations that will sit within the new legislation. These regulations will shape how the changes are applied in practice. We strongly encourage all registered providers to look out for the consultation and take part in it when it opens.