Children’s Wellbeing and Schools Act 2026

17 Power to limit profits of relevant providers

(1) The Care Standards Act 2000 is amended as follows.

(2) After section 30ZJ (inserted by section 16(2)) insert—

“30ZK Power to limit profits of relevant providers

(1) The Secretary of State may by regulations provide that any profit made by a relevant provider from carrying on relevant establishments or agencies must not exceed an amount specified in, or determined in accordance with, the regulations.

(2) “Relevant provider” means a person, other than a local authority, who is registered under this Part as carrying on one or more relevant establishments or agencies.

(3) “Relevant establishments or agencies” are—

(a) children’s homes in England, and

(b) fostering agencies in England (or, where the activities of a fostering agency are carried on from two or more branches, the branches in England).

(4) The regulations may make provision about how the profit made by a relevant provider from carrying on relevant establishments or agencies is to be determined.

(5) The provision that may be made by virtue of subsection (4) includes provision about making adjustments for disguised profit arrangements.

(6) Arrangements are “disguised profit arrangements” if—

(a) having regard to all the circumstances, it would be reasonable to conclude that the main purpose, or one of the main purposes, of the arrangements was to reduce profit, and

(b) they meet any other conditions specified in the regulations.

(7) The Secretary of State may make regulations under this section only if satisfied that it is necessary to do so, having regard to the public interest in securing that relevant providers are providing placements on terms which represent value for money.

(8) Before making regulations under this section the Secretary of State must have regard to—

(a) the welfare of children being looked after by local authorities in England,

(b) the interests of local authorities in England, and

(c) the interests of relevant providers (including the opportunity to make a profit).

(9) Before making regulations under this section the Secretary of State must consult—

(a) local authorities in England,

(b) any persons appearing to the Secretary of State to represent the interests of relevant providers, and

(c) such other persons (if any) as the Secretary of State considers appropriate.

30ZL Power to limit profits of relevant providers: supplementary provision

(1) The Secretary of State may by regulations require relevant providers to make an annual return to the Secretary of State for the purpose of determining whether they have complied with any requirement imposed by regulations under section 30ZK.

(2) Regulations under this section may make provision—

(a) about the contents of the return;

(b) about the period in respect of which, and date by which, it is to be made.

(3) Regulations under this section may make provision conferring on the Secretary of State powers to require the provision of information from relevant providers in connection with the contents of the return.

(4) “Relevant provider” has the same meaning as in section 30ZK.”

(3) In section 25 (power for regulations to create offences), after subsection (2) insert—

“(2A) Subsection (1) does not apply to regulations under section 30ZK or 30ZL (power to limit profits).”

(4) In section 118 (orders and regulations), in subsection (2B) (inserted by section 16(3)) after paragraph (a) insert—

“(b) section 30ZK;”.