Removing profit from the care of children who are looked after: Connecting with colleagues working with children and young people in Wales
The Association of Directors of Social Services (ADSS) Cymru is the professional and strategic leadership organisation for social services in Wales. This briefing provides an update on our work to support local authorities to implement the Health and Social Care (Wales) 2025 Act, which will impact the way local authorities find homes for the children and young people we have a duty to look after. These updates may of interest to Regional Partnership Boards, Safeguarding Boards and other colleagues across Wales who interact with children and young people day-to-day. This may be in education, justice, health, or other sectors. The most up-to-date information about removing profit is on the Welsh Government website.
You can also sign up the ADSS Cymru quarterly newsletter which includes removal of profit updates.
Memorandum of Cooperation
All 22 local authorities in Wales have signed a Memorandum of Cooperation setting out how they will work together to support the removal of profit from the care of children who are looked after. This shared commitment ensures the transition to not‑for‑profit care is delivered safely, consistently and in a way that protects the stability of services for children. Through the memorandum, local authorities agree to:
• Share information openly about plans for new or changing fostering and residential services, helping avoid disruption and ensuring new provision meets local and national needs.
• Coordinate developments so that public services grow sustainably and complement one another across Wales.
• Work together on workforce stability, including sharing intelligence on staffing pressures and exploring joint approaches to recruitment and training.
• Share high‑level data, helping build a clear national picture of need, capacity and risk across the care system.
ADSS Cymru plays a central role in supporting this work. Through the national removal of profit project team and existing leadership networks, ADSS Cymru coordinates collaboration, helps surface issues early, and ensures learning is shared across all regions of Wales. A national implementation forum also meets regularly to monitor progress and maintain alignment.
This cooperative approach provides confidence to partners, providers and the public that the move to not‑for‑profit care is being delivered in a planned, transparent and joined‑up way, with children’s needs and service stability at the centre.
Designing the next generation of residential children’s care in Wales
Through the demand and financial modelling work undertaken over the past year, colleagues across Wales have increasingly recognised that, as part of the removal of profit agenda, we will need to develop more specialist residential provision, including models operating across local authority boundaries. What began as a policy requirement is now being seen as a genuine opportunity to rethink how we design and deliver care for some of our most vulnerable children and young people.
To bring this conversation together and introduce new perspectives, we are developing a series of regional workshops. These sessions will bring together social workers, commissioners, finance and housing partners, transitioning providers, charities and academics to codesign not-for-profit residential and step-down care models that are financially credible, operationally deliverable and grounded in real practice.
Using regional demand, activity and finance data as our starting point, the workshops will focus on practical models that reduce system pressure, prevent escalation into high-cost placements and make better use of public assets. The ambition is to produce a small number of pilot-ready, evidence-informed models that can be developed into robust business cases and taken forward at pace.
Using regional demand, activity and finance data as our starting point, the workshops will focus on practical models that reduce system pressure, prevent escalation into high-cost placements and make better use of public assets. The ambition is to produce a small number of pilot-ready, evidence-informed models that can be developed into robust business cases and taken forward at pace.
Working together
Our highest priority is to ensure continuation and quality of care for the children we look after. Local authorities across Wales will be working together to implement the changes necessary to respond to the legislation. The transition will require substantial resources and planning, as well as effective communication, consultation, and engagement with all our stakeholders.
As your teams may be engaging with some of the same children and young people we have a duty to look after, we want to make sure your teams are aware of the policy changes and the preparation happening.
We will continue to update you as work progresses. In the meantime, if you have any queries for ADSS Cymru, please email: removalofprofit@adss.cymru