Written statement (Wales): Consultations to support implementation of the Health and Social Care (Wales) Act 2025 - July 16

Dawn Bowden MS, Minister for Children and Social Care: On 24 March this year, we achieved a significant milestone as the Health and Social Care (Wales) Act 2025 (‘the Act') received Royal Assent. This landmark legislation paves the way for a series of important reforms aimed at improving how care and support is delivered across Wales.

The Act includes provision intended to prevent the extraction of profit by providers of children's home, secure accommodation and fostering services, and to enable the introduction of direct payments for health care, initially for individuals eligible for Continuing NHS Healthcare (CHC). The Act also makes a number of miscellaneous amendments to the Social Services and Well-Being (Wales) Act 2014 and the Regulation and Inspection of Social Care (Wales) Act 2016, to ensure our existing legislation can operate fully and effectively. 

Today, I am pleased to launch three consultations on proposed regulations under the Act, to support implementation of some of its key provisions from 1 April 2026. 

Consultation on removing profit from children's care – proposals for registration, annual returns and monitoring and enforcement

During scrutiny, I made clear this Government's intention to legislate so that, from 1 April 2026, no new providers of children's home, secure accommodation or fostering services (collectively known as ‘restricted children's services') would be able to register with Care Inspectorate Wales – and therefore lawfully operate within Wales - unless they are a local authority or one of the four types of not-for-profit entity permitted by the Act. These are: 

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

To support implementation, this consultation proposes changes to existing regulations relating to the registration of service providers, and to provider annual returns, so that Care Inspectorate Wales (acting on behalf of the Welsh Ministers) has the information and assurance it needs to determine whether a provider meets the not-for-profit conditions set out in the Act. 

The consultation also outlines a proposed approach to monitoring and enforcing the Act's provisions around unreasonable or disproportionate financial arrangements entered into by providers of restricted children's services. This is to ensure that our policy intent – to prevent the extraction of profit from children's care – is not undermined. 

Building on Part 1 of the Act, this consultation marks an important step in delivering our Programme for Government commitment to eliminate profit from the care of children looked after. Our aim is to ensure that public funds invested in the care of young people do not profit individuals or corporate entities but are reinvested to improve experiences and outcomes for children, enhance service delivery and support professional development for those providing care. 

Consultation on proposals for regulations about direct payments for health and social care

Another seminal change enabled by the Act is the introduction of direct payments for health care. This consultation sets out detailed proposals for regulations that will underpin this and provide the legal framework through which Local Health Boards (exercising functions on behalf of the Welsh Ministers) can offer direct payments to individuals who are eligible for Continuing NHS Healthcare (CHC), enabling them to arrange and manage their own care and support.

Direct payments are a well-established mechanism in social care, empowering people to make choices about how their assessed needs are met. Extending this approach to CHC represents a significant step forward in aligning health and social care, and in promoting person-centred care across the system.

This change is to be welcomed, as it creates a new option for disabled people and those with long-term health conditions who are eligible for CHC, giving them greater voice, choice and control over their care. It also supports our broader ambition to enable people to live as independently as possible, with care that is tailored to their individual needs and preferences.

The proposals we are consulting upon address eligibility criteria, conditions for receiving direct payments for health care, and the respective responsibilities of individuals and Local Health Boards. They have been developed with input from stakeholders and build on the principles of co-production and partnership working.

The consultation also highlights amendments made to the Social Services and Well-Being (Wales) Act 2014 in relation to direct payments for social care. These amendments will enable individuals with mental capacity to nominate a person to receive and manage payments on their behalf. It is proposed that the regulations and code of practice governing direct payments be updated to reflect this change.

Consultation on changes relating to service provider annual returns and applications to cancel registration 

This consultation focuses on proposals for regulations to support amendments made by the Act to the Regulation and Inspection of Social Care (Wales) Act 2016. These changes relate to the publication of service provider annual returns and applications made by providers to cancel their registration. 

The proposals include:  

• Requiring service providers to publish their annual return on their website within 91 days of the end of the financial year (by 30 June);
• Enabling the offence of failure to publish an annual return within the required time limit to be dealt with by a penalty notice; and
• Specifying information that must be included in a provider's application to cancel their registration. 

Collectively, these proposals aim to ensure that all service providers publish timely, transparent and comparable information about their services and that Care Inspectorate Wales (acting on behalf of the Welsh Ministers) receives essential information from providers seeking to cancel their registration, about their service closure plans. This includes details about the intended operation of services and the ongoing care, safety and well-being of individuals using or residing at the services during the closure period.

Next steps 

I encourage all interested parties - individuals, carers, professionals, and organisations - to respond to these consultations. Your views are vital to ensuring the final regulations are robust, practical, and reflect the needs and aspirations of those who will use them.

Each consultation will run for 12 weeks, closing on 8 October 2025, and is available on the Welsh Government website. I look forward to receiving your responses, which will play a crucial role in shaping the legislation and delivering these important reforms.