Earlier this year, the Health and Social Care (Wales) Act 2025 received Royal Assent, marking a significant milestone in Wales’ commitment to delivering a ‘fairer’ and ‘more sustainable’ care system.
One of the Act’s key policy objectives is the removal of profit from children’s social care, ensuring care for children looked-after is provided on a not-for-profit basis.
The first Commencement Order has been made bringing into force certain provisions of the Act in 2026 that relate to the elimination of profit in children’s social care.
Key dates in 2026
31 March 2026
New transitional provision concerning applications by providers to register a new ‘restricted children’s service’ or to add a place at which a restricted children’s service is provided to their existing registration. The deadline for such applications, without application of the new not-for-profit requirement, will be 31 March 2026.
1 April 2026
New provisions relating to restrictions on profit in children’s social care services (subject to certain exemptions) and relating to social care services, workforce and direct payments in social care.
Guidance
Care Inspectorate Wales (CIW) has dedicated webpages to provide information and support to service providers regarding the regulatory and statutory changes
Implementation updates
According to the Welsh Government announcement preparations for implementation of the not-for-profit provisions are progressing at pace, with important dates highlighted below:
Registration
From 1 April 2026
- CIW will only allow new registrations for children’s homes, secure accommodation or fostering services if the provider is one of a specified type of not-for-profit organisation.
- Existing service providers will be unable to apply to CIW to amend their registration to include an additional service or location, except where the provider is a designated type of not-for-profit organisation.
The Welsh Government has allocated £75 million to 2028 through the Eliminate and Radical Reform Grant to support local authorities and regions in developing new residential and fostering services. It is also working with Cwmpas – the development agency – to assist existing for-profit providers which are considering re-establishing as one of the four specified not-for-profit organisations: charitable companies limited by guarantee without share capital; charitable incorporated organisations; charitable registered societies or community interest companies.
Service provider annual returns and cancelling a registration
From 1 April 2026
- Providers are required to publish their annual returns on their websites by 30 June each year, or within 91 days after the end of the financial year. Failure to do so may result in an offence and could lead to a penalty notice.
- Cancelling a registration will require a provider to apply, via its CIW online account, providing specified information to ensure service closures are managed safely. The process is similar to applications to vary a provider’s registration.
The Act clarifies CIW’s authority to investigate suspected unregistered provision under the 2016 Act. A summary of consultation responses on proposed regulations will be published early next year after the regulations are laid.
We will continue to report progress on Wales’ reforms to removing profit from the care of looked-after children.
If you’d like to discuss any of the issues raised here, please contact Jill Mason.
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