Consultation on removing profit from children's care: local authority sufficiency plan duty

This consultation relates to the implementation of the Health and Social Care (Wales) Act 2025 (‘the 2025 Act’).

Specifically, it concerns new section 75A inserted into the Social Services and Well-Being (Wales) Act 2014 (‘the 2014 Act’) requiring local authorities to prepare and publish a plan (an ‘annual sufficiency plan’) in relation to their section 75(1) duty. 

From 1 April 2026 the current local authority sufficiency duty in section 75(1) will be amended so that:

• Iocal authorities must take all reasonable steps to secure accommodation for their looked after children
• the duty extends to accommodation within or near the authority’s area, recognising that in some circumstances a placement outside the county may still be closer to a child’s home community
• accommodation must be with providers who are either local authorities or who meet the not-for-profit requirements
• local authorities must consider the benefit of having a range of accommodation within or near their areas that meets the different needs of their looked after children

The consultation covers:

• the proposed approach and potential content of regulations relating to sufficiency plans. This includes the proposed use of regulation making powers under new section 75A regarding the form and content of plans.
• the proposed approach and processes regarding new section 75B - Duty to secure accommodation: procedure for approval of sufficiency plan, and section 75C - Duty to secure accommodation: procedure if draft plan not approved by Welsh Ministers, inserted by the 2025 Act.
• the relationship between sufficiency plans and existing planning and strategy documents relating to children looked after.

This consultation runs for an 8-week period, slightly shorter than the standard 12-week consultation window. This is to avoid overlap with the pre‑election period, and in recognition that there is a distinct audience for this consultation who are familiar with the subject matter.

The Welsh Government’s Programme for Government (2021) contains a commitment to ‘eliminate private profit from the care of children looked after’. The policy intent is to ensure that public money invested in accommodation for care experienced children is not extracted out as profit, but instead any surpluses are reinvested back into the system to support better outcomes, services and professional development.

On 24 March 2025, the Health and Social Care (Wales) Act 2025 (‘the 2025 Act’) became law in Wales. The 2025 Act includes provisions intended to restrict the extraction of profit by providers of children’s home services, secure accommodation services and fostering services. These are known collectively as ‘restricted children’s services’.

The 2025 Act sets out a series of arrangements, some intended to take effect from 1 April 2026, that will ultimately restrict the provision of those services (except where provided by local authorities) to ‘not for profit’ entities registered with Care Inspectorate Wales (‘CIW’). To be a recognised ‘not for profit’ entity, a provider must:

1. have objects or purposes that primarily relate to the welfare of children (or any other public good the Welsh Ministers may prescribe)

   and 

2. operate under one of 4 types of undertaking:

• a charitable company limited by guarantee without a share capital
• a charitable incorporated organisation 
• a charitable registered society
• a community interest company limited by guarantee without a share capital

To ensure the policy is not undermined by practices which go against its spirit and intention, the 2025 Act also provides that any unreasonable or disproportionate payments made by a not-for-profit provider of restricted children’s services must be taken into account by the Welsh Ministers when deciding if a provider is a fit and proper person to be registered.

The 2025 Act inserts a new section 75A into the Social Services and Well-being (Wales) Act 2014 (“the 2014 Act”). This requires local authorities to prepare and publish a plan (an ‘annual sufficiency plan’) regarding their section 75(1) duty. From 1 April 2026 the current local authority sufficiency duty in section 75(1) will be amended so that: 

• Iocal authorities must take all reasonable steps to secure accommodation for their looked after children
• the duty extends to accommodation within or near the authority’s area, recognising that in some circumstances a placement outside the county may still be closer to a child’s home community
• accommodation must be with providers who are either local authorities or who meet the not-for-profit requirements
• local authorities must consider the benefit of having a range of accommodation within or near their areas that meets the different needs of their looked after children, this replaces the previous focus on the number of providers, allowing sufficiency to be met even if the accommodation is provided by a single provider (such as the local authority itself) as long as it meets the different needs of the authority’s looked after children

The 2025 Act also inserts new sections 75B, 75C and 75D into the 2014 Act. Section 75B requires local authorities to submit a draft of the sufficiency plan to the Welsh Ministers for approval, whilst section 75C sets out the procedure to be followed if the draft plan is not approved. Section 75D requires that in relation to each financial year for which an annual sufficiency plan has been made, the annual report prepared by a local authority under section 144A must set out:

1. how steps taken by the local authority in that financial year have increased (or are expected to increase) the amount of accommodation available to the authority that meets the requirements of paragraphs (a) to (b) of section 75(1)
2. the number of applications the local authority made in that financial year for approval to place children in a supplementary placement in accordance with section 81B;
3. the reasons for any difference between the number of applications provided under paragraph (b) and the number of applications the local authority had estimated under section 75A(3)(d)(i) it would make during the year.

The intention of annual sufficiency plans is to promote and support a coherent approach to the planning and provision of not-for-profit placement sufficiency within local authorities, according to local needs, and in the context of the rebalancing of care and support provision more widely. Requiring publication of annual reports on sufficiency will ensure that local authorities’ plans are transparent and accessible to other key stakeholders, promoting greater join-up and integration.

The intention is for relevant provisions of the 2025 Act relating to removing profit to be brought into effect through subordinate legislation at the appropriate time so that:

From 1 April 2026:

• no new ‘for-profit’ children’s home, secure accommodation, or fostering services permitted to register
• existing ‘for-profit’ providers of children’s home, secure accommodation, or fostering services cannot vary their registration to add a new service or place
• the sufficiency duty under section 75(1) of the 2014 Act is amended as set out above

No later than 1 December 2026:

• local authorities will be required to submit their first draft annual sufficiency plans (covering the 2027-28 financial year) to Welsh Ministers for approval

From 1 April 2027:

• no additional beds can be added to existing ‘for-profit’ children’s homes
• local authorities will be required to publish their first annual sufficiency plans (covering the 2027 to 2028 financial year)
• no new foster carers can be approved by existing ‘for-profit’ providers of a fostering service

No later than 1 February 2028:

• local authorities will be required to submit draft annual sufficiency plans (covering the 2028 to 2029 financial year) to Welsh Ministers for approval

From 1 April 2028:

• local authorities will be required to publish their second annual sufficiency plans (covering the 2028 to 29 financial year)
• publication of local authority annual reports covering the 2027 to 2028 financial year including information within new Section 75D

No later than 1 February 2029:

• local authorities will be required to submit draft annual sufficiency plans (covering the 2029 to 2030 financial year) to Welsh Ministers for approval

From 1 April 2029:

• local authorities will be required to publish their third annual sufficiency plans (covering the 2029 to 2030 financial year)
•  publication of local authority annual reports covering the 2028 to 2029 financial year including information within new Section 75D

By no later than 1 February 2030:

• local authorities will be required to submit draft annual sufficiency plans (covering the 2030 to 2031 financial year) to Welsh Ministers for approval

April 2030:

• children cannot be placed into the care of a ‘for-profit’ service provider, apart from in exceptional circumstances (For example, if no suitable places are available in not-for-profit services)
• local authorities will be required to publish their fourth annual sufficiency plans (covering the 2030 to 2031 financial year)
• publication of local authority annual reports covering the 2029 to 2030 financial year including information within new Section 75D

As outlined in the overview section this consultation covers implementation of the annual local authority sufficiency plan duty and is structured around the following key elements:

• the proposed approach and potential content of regulations relating to sufficiency plans. This includes use of the regulation making powers under the following subsections of new section 75A:
  • subsection (2)(a) which sets out that sufficiency plans must be in such form as may be prescribed by regulations
  • subsection (3)(d)(iii) and (iv) regarding information on for-profit providers who provide accommodation in Wales, and any information to be prescribed in regulations about for-profit providers who provide accommodation in England
  • subsection (3)(f) which provides that annual sufficiency plans must include such other information as may be prescribed by regulations
• the proposed approach and processes relating to new section 75B - Duty to secure accommodation: procedure for approval of sufficiency plan, and new section 75C - Duty to secure accommodation: procedure if draft plan not approved by Welsh Ministers.
• the proposed relationship between the sufficiency plans and existing planning and strategy documents relating to children looked after.

Background

New section 75A(3) of the 2014 Act, as inserted by the 2025 Act sets out the information that must be included in an annual sufficiency plan:

1. the number of children the local authority estimates:
   1. that it will be looking after, and
   2. in respect of whom it will be unlikely to be able to make arrangements under section 81(2).
2. an assessment of the amount of accommodation provided by local authority foster parents and children’s homes that will be available to the local authority for the purpose of placing children described in paragraph (a) in accordance with section 81A(2).
3. an assessment of the extent to which that accommodation meets the requirements of paragraphs (a) to (b) of section 75(1)
4. in relation to applications the local authority anticipates making for approval of supplementary placements in accordance with section 81B:
   1. an estimate of the number of applications anticipated
   2. (ii) the reasons why that number of applications is likely to be made
   3. (iii) information to be prescribed in regulations about for-profit providers who provide accommodation in Wales and who are likely to be named in those applications
   4. (iv) information to be prescribed in regulations about private providers who provide accommodation in England and who are likely to be named in those applications
5. information about how steps to be taken by the local authority are intended to ensure that the authority has sufficient accommodation that meets the requirements of paragraphs (a), (aa), (ab) and (b) of section 75(1) (as amended).

In addition to the above, section 75A also includes the following regulation making powers:

• subsection (2) which sets out that sufficiency plans must be in such form as may be prescribed by regulations
• subsection (3)(d)(iii) and (iv) regarding information on for-profit providers who provide accommodation in Wales, and any information to be prescribed in regulations about for-profit providers who provide accommodation in England
• subsection (3)(f) which provides that annual sufficiency plans must include such other information as may be prescribed by regulations

Proposed form of sufficiency plans: regulatory approach – section 75A(2)(a)

New section 75A(2)(a) of the 2014 Act sets out that sufficiency plans must be in such form as may be prescribed by regulations. We propose to make regulations that will prescribe that sufficiency plans must be in the form of a template made available by Welsh Government.

This will ensure clarity and consistency of approach across local authorities and enable greater flexibility to evolve the form of the plans in future years. We intend to engage collaboratively with local authorities to prepare the initial template and update (if required) in response to any emerging needs, avoiding the need for formal legislative amendments.

The template will reflect the requirements already set out within new section 75A (3) of the 2014 Act, as inserted by the 2025 Act (see paragraph 1.1 above) and any other information that is to be specified in regulations made under sections 75A (3)(d)(iii) and (iv) and 75A (3)(f), see paragraphs below.

Proposed regulations: information about for-profit providers who provide accommodation in Wales, and private providers who provide accommodation in England, who are likely to be named in supplementary placement applications

New section 81B of the 2014 Act, as inserted by the 2025 Act, requires local authorities to apply to Welsh Ministers for approval of the placement of a child with a for-profit provider in Wales, or a private provider in England.

New section 75A(3)(d) requires local authorities in their sufficiency plans to include in relation to applications the local authority anticipates making for approval of supplementary placements in accordance with section 81B:

1. an estimate of the number of applications anticipated,
2. the reasons why that number of applications is likely to be made,
3. information to be prescribed in regulations about for-profit providers who provide accommodation in Wales and who are likely to be named in those applications, and
4. (iv) information to be prescribed in regulations about private providers who provide accommodation in England and who are likely to be named in those applications.

The regulation making powers to prescribe information required about for-profit and private providers are intended to promote a clear understanding about the nature and type of this provision being relied upon in Wales and England.

Regulations about information on providers who are likely to be named in supplementary placement applications could potentially include:

• provider identity and legal status: Provider name, registered address, company number, and confirmation of for-profit or not-for profit status.
• type of service provided: Whether the provider operates children’s homes, fostering services, or secure accommodation
• location and capacity: Location (approximate for anonymity) of facilities, number of registered places, and geographical coverage
• re-establishment plans: If the provider is re-establishing as a not-for-profit entity, details of the process and timeline

Any information included within the plans must not pose any data sharing issues. Relevant concerns would include mitigating any risks of children’s home locations being identifiable within plans and avoiding any risk of specific children being identified. More broadly plans would need to avoid including any information that poses any issues regarding commercial sensitivity regarding the services they relate to.

The current intention is that the requirements in section 81B in relation to applications for approval of supplementary placements will not come into force until April 2030. Similarly, the requirement to include in sufficiency plans the information set out in sections 75A (3)(b), 3(c) and 3(d) would also not come into force including any information prescribed in regulations made under section 75A (3)(d)(iii) and (iv). Sufficiency plans will therefore not be required to include this information prior to those prepared for the financial year 2030 to 2031. However, it is felt to be prudent to seek initial views now on the content of those regulations as part of this consultation.

Section 75A (3)(f): regulation making power to prescribe other information within sufficiency plans

Section 75A(3)(f) provides that annual sufficiency plans must include ‘such other information as may be prescribed by regulations’. This power is intended to enable a dynamic approach to the sufficiency plan requirements, allowing further requirements to be prescribed if deemed necessary going forward.

It is proposed that the regulations will set out a number of further ‘core’ elements to be included in sufficiency plans in addition to those already set out in section 75A (3). These could include:

• service context that focuses on needs profile of children and young people 
• data and trends in children looked after numbers (current and projected)
• placement profile of children looked after and current placement provision
• future demand projections (minimum and maximum) 
• detail about national, regional and local provision which is provided by or available to the local authority
• data on the number of children placed out of county or country
• data on the number of children in services operating without registration
• data on the number of children subject to Deprivation of Liberty Orders 
• key risks and mitigation
• gaps in data and how these will be addressed
• links with relevant Welsh Government plans
• workforce strategies and plans

New section 75B sets out the procedure for submission of sufficiency plans to Welsh Ministers, procedures for submission of subsequent drafts (if required) and notification arrangements on approval. New section 75B outlines the procedure if Welsh Ministers decide not to approve a draft sufficiency plan. This includes notifying the reasons for the decision and when the authority must submit a further draft.

The full text of sections 75B and 75C is set out below:

75B Duty to secure accommodation: procedure for approval of sufficiency plan

1. Before publishing its annual sufficiency plan, a local authority must:

1. prepare a draft of the plan, and
2. submit the draft to the Welsh Ministers for their approval

2. The first draft plan must be submitted to the Welsh Ministers no later than 4 months before the beginning of the financial year to which it relates.

3. Subsequent draft plans must be submitted to the Welsh Ministers no later than 2 months before the beginning of the financial year to which they relate.

4. Where the Welsh Ministers approve a draft of an annual sufficiency plan they must notify the local authority of their decision.

75C Duty to secure accommodation: procedure if draft plan not approved by Welsh Ministers

1. This section applies if the Welsh Ministers decide not to approve a draft of an annual sufficiency plan submitted to them by a local authority under section 75B.

2. The Welsh Ministers must notify the local authority setting out:

1. the reasons for the decision
2. the period before the end of which the local authority must submit a further draft of the plan to the Welsh Ministers

3. The local authority must submit a further draft of the plan together with a report explaining how, in preparing the draft, the local authority has taken account of the reasons set out in the notice given under subsection (2).

4. Section 75B(4) applies where the Welsh Ministers approve a further draft submitted to them under this section as it applies where the Welsh Ministers approve a draft submitted to them under section 75B.

5. Subsections (2) and (3) apply where the Welsh Ministers decide not to approve a further draft submitted to them under this section as they apply where the Welsh Ministers decide not to approve a draft submitted to them under section 75B.

Welsh Government intends to prepare guidance giving more detail on the processes described above. This is expected to include detail on:

Method of Submission 

How and where to submit plans to Welsh Ministers (we anticipate this would be electronically only, via email to a named Welsh Government mailbox).

Approval Criteria

What Welsh Ministers will assess (completeness, statutory compliance, evidence base).

Notification Procedures

How authorities will be notified of approval or non-approval and the anticipated timescales for this. 

What information will be included in notifications (such as, reasons for non-approval, next steps).

Resubmission Process (if not approved)

Steps for preparing and submitting a further draft.

Requirements for the accompanying report explaining how feedback/reasons for non-approval have been addressed.

Timeline for resubmission.

Record Keeping and Audit

Any guidance on maintaining records of submissions, notifications, and revisions for accountability.

Currently local authorities prepare a range of statutory and non-statutory planning and strategy documents relating directly or indirectly to the provision of restricted children’s services. These include:

Population assessments and area plans

Section 14 of the 2014 Act requires local authorities (alongside local health boards) to:

• jointly carry out a population assessment of the care and support needs of people in their area, and the support needs of carers
• Identify the range and level of preventative services required to meet those needs

Section 14A of the 2014 Act requires local authorities and local health boards (LHBs) to:

• Jointly prepare and publish an area plan. That plan must set out the range and level of services they propose to provide or arrange in response to the needs identified in their population assessment.

Market stability reports

Section 144B of the 2014 Act requires local authorities to prepare and publish a local market stability report. The Partnership Arrangements (Amendment) and Regulated Services (Market Stability Reports) (Wales) Regulations 2021 specified these must be done on a regional footprint with the first plans published by 1 June 2022, the second by 1 September 2027 and subsequent at least every 5 years. The reports are required to assess market sufficiency and stability for all regulated social care services (adults and children).

Placement commissioning strategy

While not a specific statutory requirement local authorities prepare individual Placement Commissioning Strategies (PCS) at regular intervals focussed on their individual strategy for placing children looked after. Many have been based on a common template prepared by the Children’s Commissioning Consortium Cymru (‘4Cs’) which includes sections for the data, analysis (including gaps & options) and the decisions including planning and strategy. While some PCS have been published by local authorities this is not something specifically required by Welsh Government. PCS have predominantly been considered to be an internal local authority document acting as a strategic roadmap for commissioning and placement priorities over future years.

We want to ensure there is a clear relationship and alignment between these planning and strategy documents and the annual sufficiency plans whilst seeking to avoid duplication and overlap as far as possible. It has been identified that the PCS in particular may be most similar in nature to the proposed elements of the annual sufficiency plan.

An Integrated Impact Assessment (‘IIA’) is being prepared to cover the development of the sufficiency plans. Its purpose is to enable Welsh Government to consider, in a structured way, the impact of the proposals on the people of Wales.  A draft of Sections 1 and 8 of the IIA are included for consideration. Section 1 describes what action the Welsh Government is considering and why, including potential challenges and opportunities. While specific sections of the IAA will consider the potential effects on social, cultural and economic well-being, this section aims to summarise the key elements of the proposals. Section 8 is the concluding section, aiming to summarise the main impacts of the proposals. The need for specific impact assessments will also be considered as the IIA is finalised.

In addition to the specific questions in the previous chapters there are a number of questions common to Welsh Government consultations.

Chapter 1: Proposed approach to regulations relating to the form and content of local authority sufficiency plans - S75A subsections (2) and (3)

Question 1

Do you agree with the proposal to prescribe that sufficiency plans should take the form of a template to be developed by Welsh Government in partnership with local authorities?

Question 2

Do you agree that Welsh Government should bring forward regulations under Section 75A(3)(d) (iii) and (iv) from April 2030 as listed above

Question 3

What are your views on the potential areas to be included within regulations under Section 75A(3)(d) (iii) and (iv) as listed above?

Question 4

Are there any other areas you think should be included within regulations under Section 75A(3)(d) (iii) and (iv)?

Question 5

Do you agree that Welsh Government should bring forward regulations under Section 75A(3)(f), listed above? 

Question 6

What are your views on the potential areas to be included within regulations under Section 75A(3)(f) as listed above?

Question 7

Are there any other areas you think should be included within regulations under Section 75A(3)(f)? 

Chapter 2: Proposed guidance on arrangements for submission and approval of sufficiency plans

Question 8

What are your views on the potential areas to be included within proposed guidance on submission and approval of sufficiency plans.  Are there any other areas you think should be included?

Chapter 3: Sufficiency plans - relationship with other planning documentation

Question 9

What are your views on how best to align the planning and strategy documents referenced above (particularly Placement Commissioning Strategies) with annual sufficiency plans? What should be the relationship, if any, between the documents in the future?

Chapter 4: Integrated impact assessment

Question 10

What are your views on Sections 1 and 8 of the Integrated Impact Assessment. Are there any specific areas where you feel further detail is required, or any specific issues you wish to highlight which may have an impact on a specific group?

Question 11

What other impacts (including any costs or benefits) do you think the proposals might have on local authorities, different organisations or sectors within health and social care?  Your views on how positive effects could be increased, or negative effects could be mitigated, would also be welcome. Please explain your reasoning.

Chapter 5: Other questions

Question 12

What, in your opinion, would be the likely effects of the proposed regulations on the Welsh language?  We are particularly interested in any likely effects on opportunities to use the Welsh language and on not treating the Welsh language less favourably than English. 

• Do you think that there are opportunities to promote any positive effects?
• Do you think that there are opportunities to mitigate any adverse effects? 

Question 13

In your opinion, could the proposals be formulated or changed so as to:

• have positive effects or more positive effects on using the Welsh language and on not treating the Welsh language less favourably than English; or 
• mitigate any negative effects on using the Welsh language and on not treating the Welsh language less favourably than English?

Question 14 

We have asked a number of specific questions. If you have any related issues which we have not specifically addressed, please use this space to report them.

Submit your comments by 7 April 2026, in any of the following ways:

• complete our online form
• download, complete our response form and email: removingprofit@gov.wales (please include the reference WG53820 in the subject of your email)
• download, complete our response form and post to:

Consultation: WG53820 
Removing Profit Policy Team  
Social Services and Integration Directorate
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

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CF10 3NQ

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Number: WG53820 

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