From next month, companies running children’s homes, fostering services and secure accommodation in Wales will no longer be allowed to make a profit – marking a landmark shift in how the country cares for its most vulnerable young people.
Under changes introduced through the Health and Social Care (Wales) Act 2025, all new providers of these services must operate on a not-for-profit basis from 1 April onwards.
The Welsh Government says the move is designed to ensure that public money invested in children’s social care goes directly towards supporting those children, rather than ending up in shareholders’ pockets.
The changes are being phased in gradually to avoid any disruption to individual children’s care. Going forward, care for looked after children will only be provided by the public sector, charitable organisations or not-for-profit bodies.
Care Inspectorate Wales will be responsible for overseeing compliance and has the power to take action against any provider found to be breaking the rules. Organisations wishing to transition to a not-for-profit model can access free, tailored support from Cwmpas, funded by the Welsh Government.
Minister for Children and Social Care, Dawn Bowden said: “Looked after children are some of the most vulnerable young people in our society. They deserve care that is totally committed to their needs.
“The changes we are putting in place mean that when we invest in children’s care, that money stays where it belongs for the benefit of those children. I’m proud that Wales is leading the way on this.”
