In less than a month, new providers of children's homes, fostering services and secure accommodation will no longer be able to make a profit in Wales, making it the first nation in the UK to take this landmark step.
Currently, some children's care homes and fostering services in Wales are run by companies that make a profit. That means public money can end up in shareholders' pockets rather than being spent on the children who need it most.
The Welsh Government is committed to phasing out the extraction of profit from children’s social care services, specifically children’s homes, fostering services, and secure accommodation, as part of its wider reform under the Health and Social Care (Wales) Act 2025.
From 1 April, all new providers of these services in Wales must be not-for-profit. This means every pound spent on the care they provide will go directly towards supporting those children.
Changes are being phased in carefully to make sure individual children's care is not disrupted.
Care for looked after children will only be provided by the public sector, charitable or not-for-profit organisations in the future.
Care Inspectorate Wales will oversee compliance and has the power to act if rules are broken.
Organisations that want to move 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.