From 1 April, Wales will become the first nation in the UK to ban profit in children’s care, a landmark move aimed at ensuring public money is spent directly on vulnerable young people rather than shareholders.

Under the Health and Social Care (Wales) Act 2025, all new providers of children’s homes, fostering services, and secure accommodation must operate on a not-for-profit basis. The Welsh Government says this step is intended to improve outcomes for looked-after children by directing funding straight into care, support, and staff development.

Currently, some private providers make significant profits from publicly funded placements, prompting concerns that resources could be diverted from the children who need them most. From next month, only the public sector, charities, and not-for-profit organisations will be able to deliver these services. Care Inspectorate Wales will oversee compliance and can take action if rules are broken.

The changes are being phased in to ensure continuity of care. Organisations wishing to transition to a not-for-profit model can access free, tailored support from Cwmpas, which is funded by the Welsh Government.

Minister for Children and Social Care, Dawn Bowden, said looked-after children “deserve care that is totally committed to their needs” and highlighted the importance of keeping funding focused on those children rather than profit extraction.

In North Wales, councils including Conwy County Borough Council, Denbighshire County Council, and Gwynedd Council already work with a mixture of charitable and private providers. Local authorities have welcomed the move, saying it could help increase the number of stable, high-quality placements close to home.

Keeping children in their local communities is a priority, particularly in rural areas of Gwynedd, Anglesey, and Conwy, where long travel distances have sometimes forced children to live far from schools, friends, and family. Advocates say that removing profit could allow more money to be reinvested in fostering recruitment, training, and support services, helping reduce the need for distant placements.

Children’s charities have praised the policy, saying it represents a major step toward a fairer, more child-focused system. While some private providers will continue to operate during the transition, the long-term goal is a network of community-based, not-for-profit services designed around the needs of children rather than financial gain.

Experts and local officials say this reform could strengthen the stability of care for North Wales children, helping ensure that resources are fully dedicated to improving outcomes, from education support to mental health services.