Dawn Bowden MS, Minister for Children and Social Care
I am pleased to update Members on implementation of the Health and Social Care (Wales) Act 2025, due to substantially come into force on 1 April 2026. This vital legislation enables fundamental reforms that place the rights, wellbeing and voices of children, families and disabled people at the centre of our health and social care systems.
The Act – part of wider, long‑term transformation of social care and health services – supports key Programme for Government commitments. It brings together reforms that will shift the provision of children’s social care towards public and not‑for‑profit entities; strengthen the rights of disabled people and those with long‑term health conditions; and enhance regulatory mechanisms within the social care sector.
Since Royal Assent in March last year, we have been working closely with delivery partners and stakeholders to ensure safe, careful implementation that protects and improves the experiences of some of those who rely most on these services.
I would personally like to thank care‑experienced young people, and adults currently receiving, or considering, continuing NHS healthcare; their lived experiences have been integral in shaping this legislation.
Key Objectives of the Act
1. Removing profit from the care of children looked after
Wales is the first UK nation to legislate to ensure that public funding for children’s social care services is reinvested in their wellbeing and not extracted as profit. This reflects our core principle that the care of looked‑after children should be grounded in compassion, stability and public value.
Under the Act:
- In future, ‘restricted children’s services’ – children’s homes, secure accommodation and fostering services – will only be provided by public, charitable or other permitted not‑for‑profit organisations.
- New for‑profit providers of these services will be unable to register from 1 April 2026.
- Existing for‑profit providers of these services will be subject to phased restrictions between 2026 and 2030, relating to the addition and expansion of those services and the placement of children.
These reforms will support a more coherent, equitable and sustainable system that better meets children and young people’s needs and aspirations.
2. Introducing direct payments for healthcare
For the first time, adults eligible for continuing NHS healthcare (CHC) will be able to request direct payments to arrange aspects of their care. This reform strengthens autonomy, choice and control, ensuring individuals can shape the support they receive in a way that best aligns with their needs and individual circumstances. It also aligns CHC with long‑standing direct payments arrangements in social care, improving coherence across our systems.
3. Strengthening regulation and inspection of social care services
The Act includes important amendments to improve transparency, ensure public accountability and enhance the safety and quality of services. These include a new duty for all providers to publish their annual returns; stronger investigative powers for Care Inspectorate Wales (CIW); and enhanced processes for Social Care Wales (SCW) in managing interim orders in fitness to practise proceedings.
These measures collectively support better oversight, improved public confidence and safer services.
Commencement and Timeline
Implementation is being phased carefully to maintain stability and safeguard the wellbeing of individuals receiving care and support.
- From 1 January 2026: some regulation‑making powers commenced.
- From 1 April 2026: main reforms begin, including the ending of new for‑profit children’s services, restrictions on existing for-profit children’s services and introduction of direct payments for CHC.
- From 1 April 2027: further restrictions on existing for‑profit children’s services.
- From April 2030: no new placements into for‑profit children’s provision by Welsh and English local authorities, except in exceptional circumstances.
To support transparency and forward planning, a detailed milestone timeline is provided at Annex A, covering major commencement points and the statutory timetable for submission and approval of local authority annual sufficiency plans.
Progress Update on each policy area
1. Removing profit from children’s social care
Preparations continue at pace across local authorities, CIW, providers, representative groups and other partners. Changes are being phased-in to avoid disruption to the care of individual children and ensure stable, high‑quality placements are maintained. This principle has underpinned every aspect of the commencement schedule.
The milestones detailed within Annex A form part of a managed transition designed to:
- strengthen local authority sufficiency
- encourage not‑for‑profit sector growth
- support providers wishing to re-establish as one of the permitted not-for-profit models
- ensure children’s wellbeing remains paramount
To support this transition:
- Care Inspectorate Wales will oversee compliance with the relevant requirements and has the power to act if these are not upheld, ensuring children’s safety and the integrity of the new system.
- Organisations wishing to re‑establish as a not‑for‑profit entity can access free, tailored support from Cwmpas, funded by Welsh Government. This includes specialist advice on governance, restructuring and legal pathways to support providers to adopt one of the permitted not‑for‑profit models.
The transition will be reinforced by the introduction of local authority annual sufficiency plans, which will set out how local authorities will ensure they have enough suitable not‑for‑profit accommodation for children looked after, prioritising placements close to home. Consultation on regulations to underpin these plans is underway.
2. Direct payments for healthcare
Work to implement direct payments for CHC is well advanced. Local Health Boards are being supported through:
- dedicated implementation leads
- regular engagement with CHC leads
- shared learning forums
- guidance developed with stakeholders
The draft National Health Service (Direct Payments) (Wales) Regulations 2026 were laid before the Senedd earlier this month and are due to be debated on 24 March. I will therefore provide further information in respect of these in a fortnight’s time.
3. Regulation, Inspection and Workforce provisions
From 1 April 2026, social care providers must publish their annual returns on their own website, by 30 June each year. This will enable people – including prospective service users and their families – to readily access information about the care and support available from the provider.
New requirements for providers wishing to cancel their registration will enhance the management of service closures with clear regard to individuals’ wellbeing; and strengthened investigatory powers will support CIW to address risks linked to unregistered provision, improving safeguarding and oversight.
Amendments enabling SCW to extend interim orders for up to 18 months will strengthen regulatory processes for the social care workforce by reducing unnecessary delays and ensuring public protection throughout investigations.
Funding and Support for Implementation
Successful delivery of these reforms depends on sustained investment and strong partnership working. The Welsh Government has made significant funding available to support local authorities, regional partnerships, health boards and providers in preparing for implementation.
Support for children’s services transformation
- £69m revenue (2022–2025) through the Social Care Reform Fund to support early planning and development of local authority and not‑for‑profit provision
- £75m revenue (2025-2028) through the Social Care Reform Fund to support the next phase of delivery
- Up to £70m annually through the Integration and Rebalancing Capital Fund
- Up to £60.5m annually through the Housing with Care Fund
This capital funding is enabling local authorities to expand residential capacity, develop new provision and reduce reliance on for‑profit placements. We are also funding the Association of Directors of Social Services Cymru to provide national coordination, strategic oversight and direct support to local authorities during the transition.
Support for social care providers
- Free, tailored transition advice provided by Cwmpas to any for‑profit provider of restricted children’s services considering moving to a not‑for‑profit model
- Guidance and support made available by CIW for regulated providers on meeting the new requirements e.g. regarding registration and publication of annual returns.
Support for health boards on direct payments
- £150,000 transitional funding for CHC implementation capacity in the current year, alongside planned multi‑year funding set out in the Act’s Explanatory Memorandum
- Regular engagement with CHC leads, operational networks and national disability forums
Engagement and Co‑production
Co‑production remains central to implementation. We will continue to work closely with local authorities, health boards, providers, third‑sector partners, disabled people’s organisations and care‑experienced young people to ensure delivery remains grounded in lived experience and operational reality.
Conclusion
The Health and Social Care (Wales) Act 2025 marks a major transformation in how care and support are delivered across Wales. It will reshape children’s social care; enhance autonomy for people eligible for continuing care; and strengthen regulation and oversight of social care services.
I want to acknowledge the leadership of Julie Morgan MS, whose compassion and determination helped shape the Bill before its introduction and laid vital foundations for these reforms. I also extend sincere thanks to the officials who have worked tirelessly to prepare the legislation for implementation. Their professionalism and expertise have been crucial in developing the primary and secondary legislation, guidance and, working with external partners, operational arrangements needed to bring the Act into effect.
Finally, I thank all key partners and stakeholders — including local authorities, Local Health Boards, CIW, SCW, providers, representative bodies, children’s and disability organisations, and those with lived experience. Their insight and commitment have been invaluable.
I wish all concerned success in continuing the work to ensure the Act translates into practical, deliverable and real change for the people of Wales.