On 24 March 2025, a new Act of the Senedd received Royal Assent: The Health and Social Care (Wales) Act. It changes how children’s social services are delivered by removing private profit from services for children who are looked after.
The goal is to shift the care system towards a not-for-profit model by 2030, aiming to improve services and the experiences of children by reinvesting in care.
You can find the most up-to-date information about removing profit on the Welsh Government website.
What will change?
Different parts of the law are coming into effect at different times, each bringing different changes.
From 1 April 2026: No new for-profit providers | Any new children’s care providers that want to operate in Wales must be not-for-profit or local authority (these include children’s homes, fostering services and secure accommodation services). |
From 1 April 2027: No expansion of existing for-profit provision | No additional residential care places and no new foster carers can be approved by existing for-profit providers of a children’s care home, secure accommodation service or fostering service. |
From 1 April 2030 (or earlier): Restrictions on placing in existing for-profit provision | Providers will need to reregister as not-for-profit to continue operating in Wales. Welsh local authorities will not be able to place children into the care of a for-profit organisation in Wales or England, unless there are exceptional circumstances (for example if no suitable places are available in not-for-profit services). Placements by a Welsh local authority into England, if the placement is not with an English local authority, will require approval from Welsh ministers. This includes within both non-local authority not-for-profit and for-profit provision. |
Why is this happening?
The voice of the child and the best interests of children and young people are of utmost importance. This commitment is, in part, a response to what children and young people themselves have said. They are opposed to being cared for by privately owned organisations that make a profit from their experience of being in care and where commercial interests will affect how they are looked after.
This law aims to fundamentally change how Wales provides services to children and their families through community-based services, with the welfare of the young person as the absolute priority.
What are we doing?
The new law brings some big challenges, like making sure there are enough care placements, managing the shift of private providers, having a well-trained workforce, and securing sustainable funding. A smooth transition will be vital.
ADSS Cymru is working in partnership with Welsh Government and other organisations to manage the changes in the best way possible.
The transition will require substantial resources and planning, as well as effective communication, consultation and engagement with all stakeholders.
Our role is to support local authorities to effectively implement the changes necessary to respond to this legislation.
We’re managing activity through working groups that focus on governance, future implementation, legal and policy, and communications and engagement.
Each group includes representatives from local authorities as well as partner organisations involved in supporting the work, such as Foster Wales, 4Cs, Social Care Wales, Care Inspectorate Wales and Welsh Local Government Association.
Discussing the changes with children and young people
Our highest priority is to ensure continuation and quality of care for the children we look after.
Welsh Government has produced a range of information leaflets, including one for children and young people.
There is also useful information about how to talk to children and young people about these changes in their leaflets for foster carers and people who work in children’s residential care homes.
All their information leaflets are available on the Removing Profit: Publications area of the Welsh Government website.
ADSS Cymru statements and updates
- Stakeholder briefing – July 25
- Statement on profiteering – June 25
- Statement following passing of the Act – March 25
Further information
We include updates about the removal of profit work in our quarterly newsletter: sign up now
Alternatively, please contact us if you have any queries or would like further information.