Health and Social Care (Wales) Act 2025

PART 1 — SOCIAL CARE

CHAPTER 1 — PROVISION OF SOCIAL CARE SERVICES TO CHILDREN: RESTRICTIONS ON PROFIT

Overview of Chapter

Overview of Chapter 1

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• (1) This Chapter makes provision to restrict the making of profit in the provision of care home services provided wholly or mainly to children (children’s home services), fostering services and secure accommodation services (referred to as “restricted children’s services”).

• (2) It does this by amending Part 1 of the Regulation and Inspection of Social Care (Wales) Act 2016 (anaw 2) (“the 2016 Act”) and Part 6 of the Social Services and Well-being (Wales) Act 2014 (anaw 4) (“the 2014 Act”).

• (3) The amendments to the 2016 Act include—

• (a) imposing a requirement on a provider of a restricted children’s service that is registered after the coming into force of the provisions to be incorporated as a “not-for-profit entity”;

• (b) providing that unreasonable or disproportionate financial arrangements entered into by such an entity are evidence to which the Welsh Ministers must have regard when deciding if a provider is a fit and proper person;

• (c) transitional provision for a provider of a restricted children’s service that is registered prior to the coming into force of these provisions (any such provider that remains registered but is not incorporated as a not-for-profit entity may remain registered subject to conditions imposed by regulations).

• (4) The amendments to the 2014 Act impose corresponding requirements on a local authority in relation to accommodation provided by the authority to looked after children, including—

• (a) amending an existing duty (in section 75 of the 2014 Act) on the authority to take steps to secure that there is sufficient accommodation within its area to meet the needs of looked after children so as to instead require the authority to take all reasonable steps to secure that there is sufficient accommodation provided by not-for-profit entities either within or near to its area to meet the needs of such children;

• (b) a new duty on the local authority to submit a sufficiency plan to the Welsh Ministers setting out what steps it is taking to meet the requirement in section 75;

• (c) amending an existing duty on the local authority to report to the Welsh Ministers annually (section 144A of the 2014 Act) to reflect both the duty to secure accommodation and the new sufficiency plan.

• (5) The duty in the 2014 Act on a local authority to place a looked after child, who cannot live with a parent, in a children’s home or with foster parents is also amended so that where these circumstances arise, the local authority must place the child in accommodation provided by a not-for-profit entity unless that is inconsistent with the duties of the local authority under section 78 of that Act (duty to promote well-being of child) (in which case, the authority must apply for the Welsh Ministers to approve a placement in accommodation provided by a provider that does not meet the requirements imposed under the 2016 Act).

Regulation of social care services provided to children

Restricted children’s services

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In the 2016 Act—

• (a) in section 1, after paragraph (b) insert—

(ba) Chapter 2 also makes provision restricting the entities that may provide‍ children’s home services, secure accommodation services and fostering services;

;

• (b) after section 2 insert—

(2A) (1) For the purposes of this Part, the following regulated services are a “restricted children’s service”— (a) a care home service‍ in so far as the service is a children’s home service; (b) a fostering service; (c) a secure accommodation service. (2) For the purposes of subsection (1), a “children’s home service” is a care home service provided at one or more places at which the service is provided wholly or mainly to children.‍ (3) Schedule 1 makes further provision about the meaning of a restricted children’s service.

• (c) in Schedule 1, after paragraph 1(3) insert—

(3A) But a school that constitutes a care home service by virtue of‍ sub-paragraph (3) does not constitute a‍ children’s home service unless– (a) it has provided more days of accommodation to looked after children than to children who are not looked after children for any period of 12 months falling within the previous 24 months, or (b) it intends to provide more days of accommodation to looked after children than to children who are not looked after children for any period of 12 months falling within the following 24 months. (3B) In sub-paragraph (3A), “looked after children‍ means children who are looked after by local authorities as described in section 74(1) of the 2014 Act.

Applications for registration in respect of restricted children’s services

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• (1) The 2016 Act is amended as follows.

• (2) In section 6, after subsection (1) insert—

(1A) In the case of a person, other than a local authority, who wants to provide a restricted children’s service, the application must also include such information as may be prescribed to satisfy the Welsh Ministers that the person meets the requirement in section 6A(1).

• (3) After section 6 insert—

(6A) (1) To be registered in respect of a restricted children’s service, a person who is not a local authority must be a not-for-profit entity. (2) For the purposes of this Part, a “not-for-profit entity” is a person that meets conditions 1 and 2 in subsections (3) and (4). (3) Condition 1 is that the person’s objects or purposes primarily relate to— (a) the welfare of children, or (b) such other public good as the Welsh Ministers may prescribe. (4) Condition 2 is that the person is one of the following types of undertaking (as defined in section 6B)— (a) a charitable company limited by guarantee without a share capital, (b) a charitable incorporated organisation, (c) a charitable registered society, or (d) a community interest company limited by guarantee without a share capital. (6B) (1) The following definitions apply for the purposes of section 6A(4). (2) A “charitable company limited by guarantee without a share capital” is a company— (a) that is registered under the Companies Act 2006 (c. 46) in Wales, England, Scotland or Northern Ireland, (b) whose liability is limited by guarantee and that does not have a share capital, and (c) that is a charity registered under one or more of— (i) the Charities Act 2011 (c. 25); (ii) the Charities and Trustee Investment (Scotland) Act 2005 (asp 10); (iii) the Charities Act (Northern Ireland) 2008 (c. 12). (3) A “charitable incorporated organisation” is an organisation registered under— (a) section 209, 232 or 238 of the Charities Act 2011 or regulations made under section 234 of that Act, (b) section 55, 58 or 60 of the Charities and Trustee Investment (Scotland) Act 2005, or (c) section 111, 114 or 117 of the Charities Act (Northern Ireland) 2008 or regulations made under section 115 of that Act. (4) A “charitable registered society” is— (a) a society that is— (i) a “registered society” within the meaning of section 1(1) of the Co-operative and Community Benefit Societies Act 2014 (c. 14), and (ii) a charity within the meaning of section 1(1) of the Charities Act 2011, (b) a society that is— (i) a “registered society” within the meaning of section 1(1) of the Co-operative and Community Benefit Societies Act 2014, and (ii) a charity registered under the Charities and Trustee Investment (Scotland) Act 2005, or (c) a society that is— (i) a “registered society” within the meaning of section 1A(1) of the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 (c. 24), and (ii) a charity registered under the Charities Act (Northern Ireland) 2008. (5) A “community interest company limited by guarantee without a share capital” is a company— (a) that is registered under the Companies Act 2006 in Wales, England, Scotland or Northern Ireland, (b) whose liability is limited by guarantee and that does not have a share capital, and (c) that is a community interest company under Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27). (6) In subsections (2) and (5)— (a) references to a company’s liability being “limited by guarantee” have the meaning given by section 3(3) of the Companies Act 2006, and (b) a company does not have a share capital if it does not have power under its constitution to issue shares‍.

Registration in respect of a restricted children’s service: transitional arrangements

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• (1) The 2016 Act is amended as follows.

• (2) After section 6B (as inserted by section 3) insert—

(6C) Schedule 1A makes provision for transitional arrangements in respect of service providers registered prior to the coming into force of section 6A(1).

• (3) After Schedule 1 insert—

SCHEDULE 1A (1) (1) In this Schedule, in relation to a‍ restricted children’s service, references to the transitional period are to the period that— (a) begins with the day on which the service becomes a restricted children’s service by virtue of section 6A(1) coming into force in relation to the service, and (b) ends with the day appointed by the Welsh Ministers by regulations for the purposes of this paragraph. (2) Regulations made under sub-paragraph (1)(b) may appoint different days for— (a) different types of restricted children’s service; (b) different descriptions of service provider (for example service providers that specialise in the provision of a particular type of restricted children’s service). (3) But sub-paragraph (2) does not limit the application of section 187 in relation to regulations made under sub-paragraph (1)(b). (4) Before making regulations under sub-paragraph (1)(b) the Welsh Ministers must consult any persons they think appropriate. (2) (1) This paragraph applies to a service provider, other than a local authority, who is registered— (a) in respect of a‍ children’s home service, when the transitional period begins in respect of that service; (b) in respect of a fostering service, when the transitional period begins in respect of that service; (c) in respect of a secure accommodation service, when the transitional period begins in respect of that service. (2) And this paragraph applies to such a service provider during the transitional period. (3) In this Schedule, in relation to a provider, references to the existing service are to the service in respect of which the provider is registered as described in sub-paragraph (1). (4) In so far as a service provider to‍ which this paragraph applies is registered in respect of the existing service— (a) the registration of the provider is not subject to the requirement in section 6A(1) (and any reference to that requirement is to be read accordingly), and (b) (in consequence) the entry in the register in respect of the provider must show— (i) that the provider’s registration in respect of the existing service is not subject to the requirement in section 6A(1), and (ii) that the condition in section 7(3)(aa) is not imposed on the provider’s registration in respect of that service. (5) But sub-paragraph‍ (4) does not apply for the purposes of an application made by the service provider— (a) in relation to the existing service, under section 11(1)(a)(ii); (b) in respect of any other service, under section 11(1)(a)(i). (3) (1) The Welsh Ministers may by regulations make provision imposing conditions on a service provider to‍ which paragraph 2 applies. (2) Conditions imposed by regulations under sub-paragraph (1) may include— (a) restrictions on the type of restricted children’s service that the service provider may provide; (b) restrictions on the description of looked after children in respect of whom the provider may provide the restricted children’s service, for example by reference to their care and support needs. (3) Sub-paragraph (4) applies where— (a) a service provider fails to comply with conditions imposed by regulations under sub-paragraph (1), or (b) in the case of a service provider described in paragraph 2(1)(b), the provider fails to comply with regulations made under section 87 of the 2014 Act. (4) Where this sub-paragraph applies, the Welsh Ministers may— (a) exercise their functions under section 13 to vary the provider’s registration by removing the service or a place at which the existing service is provided, or (b) exercise their functions under section 15 to cancel the provider’s registration in respect of the existing service. (5) Before making regulations under sub-paragraph (1) the Welsh Ministers must consult any persons they think appropriate.‍ (4) (1) This paragraph applies in respect of a service provider‍ that is registered in respect of an existing service. (2) Despite paragraph 2(4), a service provider to‍ which this paragraph applies may apply to the Welsh Ministers for the provider’s registration in respect of the existing service to be subject to the requirement in section 6A(1). (3) But where a service provider to which this paragraph applies makes an application under section 11(1)(a)(i) or (ii) in respect of a restricted children’s service that is not the existing service, the provider must apply to the Welsh Ministers for the provider’s registration in respect of the existing service to be subject to the requirement in section 6A(1). (4) An application under‍ this paragraph must— (a) include such information as may be prescribed to satisfy the Welsh Ministers that the person meets the requirement in section 6A(1), and (b) be in the prescribed form. (5) The Welsh Ministers must grant an application under‍ this paragraph if satisfied that— (a) the application— (i) contains everything required under sub-paragraph (4)(a), and (ii) meets the requirements prescribed under sub-paragraph (4)(b), and (b) the provider meets the requirement in section 6A(1). (6) In any other case the Welsh Ministers must refuse the application. (7) Where the Welsh Ministers grant an application under sub-paragraph (5), the Welsh Ministers mus‍t, in so far as the provider is registered in respect of the existing service— (a) impose the condition in section 7(3)(aa) on the provider’s registration; (b) show in the register that— (i) the provider’s registration in respect of the existing service is subject to the requirement in section 6A(1), and (ii) the condition in section 7(3)(aa) is imposed on the provider’s registration in respect of that service. (8) Where a variation under this paragraph takes effect, paragraphs 2(4) and 3 do not apply to the service provider. (9) A variation under this‍ paragraph takes effect only if the requirements of section 18 to 20 are met (so far as applicable). (5) In this Schedule— (a) “looked after children” means children who are looked after by local authorities as described in section 74(1) of the 2014 Act; (b) references to the “register are to the register maintained under section 38 of this Act.

• (4) In section 45, after “section 27 or 37(2)(a)” insert “or under paragraph 3(1) of Schedule 1A”.

Grant or refusal of registration in respect of a restricted children’s service

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• (1) The 2016 Act is amended as follows.

• (2) In section 7(1), after paragraph (a) insert—

(aa) in the case of an application in respect of a restricted children’s service, the applicant meets the requirement in section 6A(1);

.

• (3) In section 7(3)—

• (a) at the end of paragraph (a) omit “and”;

• (b) after paragraph (a) insert—

(aa) must, in the case of an application in respect of a restricted children’s service, be subject to a condition that the service provider notify the Welsh Ministers of any circumstances under which the provider no longer meets the requirement in section 6A(1), and

.

Fit and proper person: relevant considerations

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• (1) The 2016 Act is amended as follows.

• (2) In section 9(7), after paragraph (d) insert—

(e) where the person is a service provider that— (i) is registered in respect of a restricted children’s service, and (ii) is subject to the requirement in section 6A(1), whether it appears to the Welsh Ministers that the provider has entered into a financial arrangement that falls within section 9A.

• (3) After section 9 insert—